Lands' End Swings to a Loss
June 01 2016 - 8:40AM
Dow Jones News
Lands' End Inc. swung to a loss in its latest quarter, dragged
by a steep sales decline and aggressive discounting to woo
customers.
"Our financial results in the first quarter were impacted by the
overall weakness in the retail environment, including aggressive
discounting and promotional activity," said Chief Executive
Federica Marchionni. "While we expect the retail environment will
be very challenging," she said, Lands End expects e-commerce
initiatives and new product offerings to result in sequential
improvement beginning in the current period.
Wisconsin-based Lands' End, which spun off from Sears Holdings
Corp. in 2014 and runs many of its shops inside Sears stores, is
the latest in a big batch of disappointing first-quarter retail
results. Stores across the spectrum have been hurt by dwindling
foot traffic as shoppers increasingly turn to online retailer
Amazon.com, fast-fashion chains and discounters.
To keep their share of consumers' wallets, many retailers have
resorted to deep discounting. For Lands' End, such promotional
activity helped push its gross profit margin down to 47.4% from 49%
a year earlier. And discounting didn't prevent a sharp sales slide.
At stores open at least a year, a key retail metric, sales fell
7.1%. The decline was, however, an improvement from recent
quarters, and part of it was due to the shutting of some shops at
Sears' locations.
In all, Lands' End reported a loss of $5.76 million, or 18 cents
a share, down from a year-earlier profit of $1.72 million, or 5
cents a share.
Revenue declined 8.7% to $273.4 million. Analysts surveyed by
Thomson Reuters projected 2 cents in adjusted earnings per share
and $293.2 million in revenue.
Shares in the company, down 28% this year through Tuesday's
close, were inactive premarket.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
June 01, 2016 08:25 ET (12:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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