On June 5, 2024, Lands' End Inc (LE, Financial) released its 8-K filing detailing the financial results for the first quarter ended May 3, 2024. Lands' End Inc is a United States-based multi-channel retailer of casual clothing, accessories, and footwear, as well as home products. The company's operating segments include U.S. eCommerce, International, Outfitters, Third Party, and Retail, with the U.S. eCommerce segment generating the maximum revenue.
Performance Overview
Lands' End Inc (LE, Financial) reported a net revenue of $285.5 million for Q1 2024, a 7.8% decrease from $309.6 million in Q1 2023. Excluding the $26.9 million revenue from the concluded Delta Air Lines business in Q1 2023, net revenue increased by 1.0%. The company reported a net loss of $6.4 million, or $0.20 loss per diluted share, compared to a net loss of $1.7 million, or $0.05 loss per diluted share, in Q1 2023.
Segment Performance
Global eCommerce net revenue was $195.5 million, a 3.7% decrease from $203.1 million in Q1 2023. U.S. eCommerce net revenue decreased by 4.0%, driven by reduced promotional activity and improved inventory management. International eCommerce net revenue decreased by 1.7% for similar reasons. Outfitters net revenue was $42.7 million, a 42.3% decrease from $74.0 million in Q1 2023, primarily due to the conclusion of the Delta Air Lines contract. Third Party net revenue increased by 62.9% to $37.5 million, driven by licensing arrangements and improved gross margins.
Financial Achievements
Gross profit increased by 0.8% to $139.0 million, with a gross margin improvement of 410 basis points to 48.7%. This was attributed to lower promotional activity, reduced clearance inventory, and supply chain cost improvements. However, selling and administrative expenses increased by $8.9 million to $127.4 million, driven by higher digital marketing spend and lower revenues.
Key Financial Metrics
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Net Revenue | $285.5 million | $309.6 million |
| Gross Profit | $139.0 million | $137.9 million |
| Net Loss | $(6.4) million | $(1.7) million |
| Adjusted EBITDA | $11.6 million | $19.5 million |
Balance Sheet and Cash Flow
As of May 3, 2024, cash and cash equivalents were $27.4 million, up from $7.3 million as of April 28, 2023. Inventories decreased by 23% to $288.6 million, reflecting improved inventory efficiency. Net cash used in operating activities was $25.8 million, compared to $10.8 million in Q1 2023, primarily due to an increase in net loss and changes in working capital.
Outlook
For Q2 2024, Lands' End Inc (LE, Financial) expects net revenue between $290.0 million and $320.0 million, with a net loss between $8.5 million and $6.0 million. For fiscal 2024, the company anticipates net revenue between $1.36 billion and $1.45 billion, with net income between $2.5 million and $10.0 million.
Bernie McCracken, Chief Financial Officer, stated, “The Company’s continued focus on expanding profitability, including by better managing inventories, which were down 23% year-over-year, is continuing to generate favorable results which outperformed our guidance and setting a strong foundation for future growth.”
For more detailed financial information, please refer to the 8-K filing.
Explore the complete 8-K earnings release (here) from Lands' End Inc for further details.
