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James Li
James Li
Articles (480)  | Author's Website |

Land’s End Rises on Strong Revenue Growth

Company reports third straight quarter of profitability growth, stock jumps over 20%

June 12, 2018 | About:

Land’s End Inc. (NASDAQ:LE), a multichannel retailer of casual clothing and accessories, said net revenues for the three months ended May 4 increased 11.7% from the prior-year quarter, “the fourth-straight quarter of top-line growth” according to CEO Jerome Griffith.

Net losses of 8 cents per share improved 16 cents from the prior-year quarter’s loss of 24 cents per share. Griffith mentioned that even though Retail segment revenues declined 34% due to fewer stores at Sears Holdings Corp. (NASDAQ:SHLD) locations, profitability growth still increased for the third straight quarter, demonstrating “continued progress” on strategic initiatives. The company saw strong growth in its uniform business through the successful business launch with Delta Air Lines Inc. (NYSE:DAL).

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Company continues strategic initiatives to promote brand strength

Griffith highlighted four key categories for strategic brand growth on the earnings call: product, digitalization, distribution and infrastructure. The CEO said new customers are buying key products, including swimwear that offer sun protection. The number of buyers increased in the double digits during the quarter.

Griffith also stressed the company’s digitalization and personalization initiatives. One example of the latter occurred on May 16, when Land’s End announced it would offer “complementary, professional” swimsuit fittings and swimwear discounts at its new store in Kildeer, Illinois. Land’s End also announced new retail platforms for its products, including Amazon.com Inc. (NASDAQ:AMZN). Griffith said the company is also exploring with European and Asian e-commerce websites to further promote brand growth.

Stock rises over 20% on earnings beat

Land’s End traded around $29.35 on Tuesday afternoon, up 24.89% from its previous close of $23.50 as the company outperformed top-line analyst estimates by approximately 10.1% according to Earnings Whispers.

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Although the company reported strong revenue growth during the quarter, GuruFocus still lists several warning signs for Land’s End, including contracting profit margins. The company’s profitability ranks 4 out of 10 primarily due to operating margins and returns underperforming 91% of global competitors.

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NAS:LE data by GuruFocus.com

Sears CEO Edward Lampert (Trades, Portfolio) owns 5,736,994 shares of Land’s End, the highest among the guru investors.

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Disclosure: No positions.

About the author:

James Li
I am an editorial assistant and researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

Visit James Li's Website


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