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Lands’ End (NASDAQ:LE) rallied after turning in a better-than-feared Q3 earnings report.
Revenue was down 12.5% year-over-year during the quarter to $324.7M. Global e-commerce revenue was off 13.2% from a year ago to $216.4M. U.S. e-commerce net revenue decreased 10.0% primarily driven by a concerted effort to reduce promotional activity and improved inventory management compared to the prior year resulting in higher margins with lower clearance inventory sales. Revenue in the Outfitters segment dropped 8.0% year-over-year to $74.3M, due primarily driven by the conclusion of the Delta Air Lines contract in FQ1 and timing of school uniform shipments compared to prior year partially offset by mid-single digit growth year-over-year in the retailer’s other business to business customers.
Gross margin increased approximately 700 basis points to 47.0% of sales. The margin improvement was tied to new products across the brand, strength in transitional outerwear and adjacent product categories, a reduction in sales of clearance inventory, and improvements in supply chain costs. Adjusted EBITDA was $17.3M in the quarter vs. $16.7M a year ago. EPS came in at -$0.11 vs. -$0.05 a year ago.
Looking ahead, Lands’ End (LE) sees full-year revenue of $1.45B to $1.48B and a full-year EPS loss of $0.16 to $0.07.
Shares of Lands’ End (LE) were up 10.75% at 10:55 a.m. to $7.37 vs. the 52-week trading range of $5.98 to $10.81. Short interest on the retail stock stands at 13.8% of the total float.
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