Net Slips at Lands’ End Amid Slight Revenue Drop

Lands’ End Inc., performing relatively well during the pandemic, reported Wednesday that fourth-quarter net income slipped to $19.9 million or $0.60 a diluted share, from $25.5 million, or $0.78 a share, in the year-ago period.

Adjusted earnings before interest, taxes, depreciation and amortization decreased 6.5 percent to $46.1 million in the fourth quarter ended Jan. 29, compared to $49.3 million in the fourth quarter of fiscal 2019.

Net revenue decreased 2 percent to $538.4 million last quarter, compared to $549.5 million in the fourth quarter last year. Excluding the approximately $40 million impact from the American Airlines uniforms launch from the prior-year period, net revenue would have increased by 5.6 percent.

E-commerce net revenue increased 7.5 percent last quarter, with e-commerce in Europe rising 38 percent and U.S. e-commerce growing 3.7 percent.

Third-party net revenue, which includes U.S. wholesale revenues and sales on third-party marketplaces, increased to $21.3 million, a 298.2 percent jump from the fourth quarter last year.

Revenue at Lands’ End’s Outfitters division declined 54.2 percent to $43 million due in part to the lapping of the American Airlines launch in the fourth quarter of 2019. Excluding the impact from the American Airlines launch, net revenue would have decreased 20.8 percent due to decreased customer demand from the COVID-19 pandemic.

“The strength and resilience of our business model as well as the diligence and endurance of our teams was clearly demonstrated over the past year,” said Jerome Griffith, chief executive officer. “From the onset of the pandemic, we moved swiftly to protect our business while at the same time maintaining our focus on the execution of our strategic pillars. We were well positioned to capitalize on the accelerated shift to online as a digitally led company and we benefited from the investments we made to advance our competitive strengths. This enabled us to drive high-single-digit growth in our global e-commerce sales and double-digit growth in adjusted EBITDA in fiscal 2020.

“We remain excited about the significant growth opportunity that lies ahead as we further advance our initiatives and continue to adapt to the changing consumer environment. With a strong foundation largely in place, we are confident that Lands’ End will thrive in this digital-first environment.”

For the fiscal year, net revenue decreased 1.6 percent to $1.43 billion, compared to $1.45 billion in the prior year. Excluding the approximately $36 million net impact from the American Airlines launch, net revenue would have increased by 0.9 percent.

Global e-commerce net revenue increased 8.6 percent for fiscal year, driven by U.S. e-commerce increasing 5.7 percent and Europe e-commerce growing 29.7 percent.

Third-party net revenue increased 192.6 percent with the launch of selling Lands’ End at Kohl’s in the third quarter of 2020.

Outfitters net revenue declined 39 percent. Excluding the impact from the American Airlines launch, net revenue would have decreased 30.7 percent.

Net income was $10.8 million, or $0.33 earnings a diluted share, compared to net income of $19.3 million, or $0.60 a share, in fiscal 2019.

Adjusted EBITDA grew by 11.6 percent to $87.0 million compared to $77.9 million in fiscal 2019.

Earlier this week, James Gooch was promoted to president while continuing as chief financial officer. As president, he will oversee e-commerce, international, Outfitters, third party and retail businesses.

Sarah Rasmusen, chief customer officer, was promoted to executive vice president to oversee information technology and performance marketing functions.

And Peter Gray, executive vice president, chief administrative officer and general counsel, will oversee distribution center operations.

All three executives, in addition to Chieh Tsai, executive vice president, chief product officer, and Matt Trainor, senior vice president, brand creative, will continue to report to Griffith.