Lands' End, Inc. (LE) 10-Q Quarterly Report December 2022

Jerome Griffith, Chief Executive Officer, stated, “We experienced strong conversion rates throughout the quarter indicating favorable responses to our product offerings. While the current environment remains volatile, we are optimistic about the future as we focus on making progress against our strategic initiatives. Our long-tenured customer base and our digitally-driven eCommerce model gives me confidence that Lands’ End is in a strong position for long-term success.”

Third Quarter Financial Highlights:

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For the third quarter, net revenue decreased 1.3% to $371.0 million compared to $375.8 million in the third quarter of fiscal 2021.

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Global eCommerce net revenue decreased 4.6% to $249.2 million for the third quarter. Net revenue in U.S. eCommerce decreased 1.3% and International eCommerce decreased 19.6%, both primarily driven by lower consumer demand resulting from macroeconomic challenges impacting discretionary spending.

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Outfitters net revenue decreased 6.2% to $80.8 million for the third quarter, primarily driven by the normalization of purchases in travel-related national accounts compared to last year.

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Third Party net revenue increased 59.9% to $30.9 million for the third quarter, primarily attributed to growth in the Kohl’s online marketplace, and growth in other new and existing online marketplaces.

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Retail net revenue increased 9.7% to $10.1 million with Same Store Sales increasing 13.0% in the third quarter compared to third quarter of fiscal 2021.

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Gross profit was $148.4 million, a decrease of $18.4 million or 11.0% from $166.8 million during the third quarter of fiscal 2021. Gross margin decreased approximately 440 basis points to 40.0%, compared to 44.4% in third quarter of fiscal 2021. The Gross margin decline was attributable to an incremental $6.8 million of transportation costs as a result of global supply chain challenges, increased industry-wide promotional activity, as well as margin mix from growth in our Third Party business.

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Selling and administrative expenses decreased $4.6 million to $132.8 million or 35.8% of net revenue, compared to $137.4 million or 36.6% of net revenue in third quarter of fiscal 2021. The approximately 80 basis points decrease was driven by continued expense controls across the entire business.

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Net loss was $4.7 million, or $0.14 loss per diluted share. This compares to Net income of $7.4 million or $0.22 earnings per diluted share in the third quarter of fiscal 2021.

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Adjusted EBITDAdecreased to $16.7 million compared to $29.8 million in the third quarter of fiscal 2021.

The following information was filed by Lands' End, Inc. (LE) on Thursday, December 1, 2022 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Lands' End, Inc.'s 10-Q Quarterly Report:

Financial - Expense Highlight
Depreciation and amortization expense was $29.2 million in Year-to-Date 2022, a decrease of $0.3 million or 1.0%, compared with $29.5 million in Year-to-Date 2021.

Financial - Debt Highlight
Events of Default The Debt Facilities include customary events of default including non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations or warranties, cross defaults related to certain other material indebtedness, bankruptcy and insolvency events, invalidity or impairment of guarantees or security interests, material judgments, and change of control.
Financial - Expense Highlight
The approximately 80 basis point decrease was driven by continued expense controls across the entire business.
Financial - Expense Highlight
The estimated one-time LE Japan closing costs includes $1.7 million for employee severance and benefit costs, $0.9 million for early termination and restoration costs of leased office and warehouse facilities and $0.4 million for contract cancellation and other costs.
Financial - Expense Highlight
The estimated one-time LE Japan closing costs includes $1.7 million for employee severance and benefit costs, $0.9 million for early termination and restoration costs of leased office and warehouse facilities and $0.4 million for contract cancellation and other costs.
Other - Other
Risk Factors" in our Annual...Read more
Other - Other
We have considered all recent...Read more
Other - Other
The interest rates per annum...Read more
Revenue - Product
Our U.S. Company Operated stores...Read more
Financial - Earnings
The $16.8 million decrease was...Read more
Other - Other
The increase in net cash...Read more
Financial - Expense
The approximately 20 basis point...Read more
Other - Other
Cash provided by operating activities...Read more
Revenue - Product
These statements may discuss, among...Read more
Financial - Income
We recorded an income tax...Read more
Other - Other
These risks and uncertainties include...Read more
Other - Other
The methods we use to...Read more
Other - Other
As a result, any non-GAAP...Read more
Other - Other
Our management uses Adjusted EBITDA...Read more
Financial - Earnings
Interest; Fees The Third Amendment...Read more
Revenue - Product
The increase was primarily attributed...Read more
Financial - Earnings
The $50.5 million decrease was...Read more
Financial - Income
19 While Adjusted EBITDA is...Read more
Financial - Income
The Year-to-Date 2022 rate is...Read more
Financial - Income
The tax rate for the...Read more
Revenue - Product
Third Party Net revenue was...Read more
Revenue - Product
Retail Net revenue was $10.1...Read more
Revenue - Product
Outfitters Net revenue was $205.4...Read more
Revenue - Product
22 Third Party Net revenue...Read more
Revenue - Product
Retail Net revenue was $32.7...Read more
Financial - Earnings
For all loans, the borrowing...Read more
Other - Other
The ABL Facility fees include...Read more
Financial - Income
We recorded an income tax...Read more
Financial - Earnings
Gross margin decreased approximately 440...Read more
Other - Other
On July 29, 2021, we...Read more
Financial - Earnings
Gross margin decreased to 41.1%...Read more
Revenue - Product
The decrease in revenue was...Read more
Financial - Expense
The $2.5 million increase was...Read more
Financial - Income
The following table sets forth,...Read more
Other - Other
Inventory increased $85.1 million compared...Read more
Revenue - Product
Cash generated from our net...Read more
Revenue - Product
Our U.S. Company Operated stores...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Lands' End, Inc. provided additional information to their SEC Filing as exhibits

Exhibit 10.1: Material Contract

Exhibit 10.2: Material Contract

Exhibit 10.3: Material Contract

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Ticker: LE
CIK: 799288
Form Type: 10-Q Quarterly Report
Accession Number: 0001564590-22-038838
Submitted to the SEC: Thu Dec 01 2022 5:16:14 PM EST
Accepted by the SEC: Thu Dec 01 2022
Period: Friday, October 28, 2022
Industry: Retail Family Clothing Stores