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Daily Newsletter

04 September 2023

Daily Newsletter

Land’s End losses widen during Q2 on sales weakness

US clothing brand Land’s End has booked wider losses for the second quarter (Q2) on lower sales and increased expenses and costs.

CEO Andrew McLean says Land’s End is now focused on exceeding customer expectations, prioritising profitable demand and creating long-term shareholder value.

Land’s End Q2 in brief

Net revenue decreased 7.9% to $323.3m compared to $351.2m in the second quarter of fiscal 2022.

Global eCommerce net revenue was $218.7m, a decrease of 8.7% from $239.7m in the second quarter of fiscal 2022.

Outfitters net revenue was $68.0m, a decrease of 3.8% from $70.7m in the second quarter of fiscal 2022, primarily driven by the conclusion of the Delta Air Lines contract in the first quarter 2023 partially offset by school uniform revenue increasing high single-digits year-over-year.

Third Party net revenue was $24.4m, a decrease of 10.6% from $27.3m in the second quarter of fiscal 2022, primarily attributed to weaker than expected online demand performance at Kohl’s partially offset by continued growth of marketplace sales through Target, Macy’s and Amazon.

Adjusted EBITDA was $15.8m in both Q2 of fiscal 2023 and Q2 of fiscal 2022.

Net loss was $8.0m, or $0.25 loss per diluted share. This compares to net loss of $2.2m or $0.07 loss per diluted share in the second quarter of fiscal 2022 and includes the one-time closing costs of Lands’ End Japan KK, a subsidiary of Lands’ End, Inc., (“Lands’ End Japan”).

Land’s End Q3 outlook

Net revenue to be between $340.0m and $355.0m.
Net loss to be between $6.5m and $4.0m and diluted loss per share to be between $0.20 and $0.13.
Adjusted EBITDA in the range of $13.0m to $16.0m.

Land’s End FY23 outlook

Net revenue to be between $1.50bn and $1.55bn.
Net (loss) income to be between $(4.5m) and $1.0m, and diluted (loss) earnings per share to be between $(0.14) and $0.03.
Adjusted EBITDA in the range of $77.0m to $84m.

COVID-19 drove rapid digitalization within the retail and apparel sector

As ecommerce experienced booming growth during the COVID-19 pandemic, retailers accelerated their digitalization strategies to keep up with demand. The cloud has become an important model for delivering and maintaining enterprise IT resources. Many retailers have developed in-house cloud divisions that will allow them to better exploit the cloud’s capabilities. However, for those players that do not have the necessary skills in-house, the cloud can pose some significant challenges.