Land's End posts 2 percent drop in Q4 sales, online revenues rise
By Prachi Singh
For the fourth quarter, net revenue at Land’s End decreased 2 percent to 538.4 million dollars, while global ecommerce net revenue increased 7.5 percent, driven by Europe ecommerce increasing 38 percent and U.S. ecommerce growing 3.7 percent including an increase in the total global buyer file by 5 percent and 13.7 percent increase in new customers. The company said, third party net revenue, which includes U.S. wholesale revenues and sales on third party marketplaces, increased to 21.3 million dollars, a 298.2% increase as compared to the fourth quarter last year.
Commenting on the financial results, Jerome Griffith, the company’s Chief Executive Officer, said: “From the onset of the pandemic, we moved swiftly to protect our business while at the same time maintaining our focus on the execution of our strategic pillars. We were well positioned to capitalize on the accelerated shift to online as a digitally-led company and we benefited from the investments we made to advance our competitive strengths.”
Review of Land’s End’s fourth quarter results
The company added that Outfitters net revenue declined 54.2 percent to 43 million dollars due in part to the lapping of the American Airlines launch in the fourth quarter of 2019. Excluding the impact from the American Airlines launch, net revenue would have decreased 20.8 percent due to decreased customer demand from the Covid-19 pandemic.
Gross margin decreased approximately 30 basis points to 39.5 percent as compared to 39.8 percent in the fourth quarter last year. Net income for the quarter was 19.9 million dollars or 60 cents per diluted share compared to 25.5 million dollars or 78 cents per diluted share in the fourth quarter of fiscal 2019. Adjusted EBITDA decreased 6.5 percent to 46.1 million dollars compared to 49.3 million dollars in the fourth quarter of fiscal 2019.
Full year financial highlights of Land’s End performance
For the fiscal year, the company’s net revenue decreased 1.6 percent to 1.43 billion dollars compared to 1.45 billion dollars in the prior year. Global ecommerce net revenue increased 8.6 percent, driven by U.S. ecommerce increasing 5.7 percent and Europe ecommerce growing 29.7 percent. Third party net revenue increased 192.6 percent with the launch of the Kohl’s business in the third quarter of 2020. Outfitters net revenue declined 39 percent.
Gross margin decreased approximately 50 basis points to 42.4 percent compared to 42.9 percent in fiscal 2019. Net income was 10.8 million dollars or 33 cents earnings per diluted share compared to 19.3 million dollars or 60 cents earnings per diluted share in fiscal 2019, while adjusted EBITDA grew by 11.6 percent to 87 million dollars.
Land’s End reveals outlook for Q1 and full year
For the first quarter of fiscal 2021 the company expects net revenue to be between 275 million dollars and 285 million dollars, net loss to be between 10.5 million dollars and 8 million dollars, and diluted loss per share to be between 32 cents and 25 cents and adjusted EBITDA in the range of 4 million dollars to 7 million dollars.
For the first half, the company expects net revenue to be between 600 million dollars and 620 million dollars, net loss to be between 16.5 million dollars and 11.5 million dollars and diluted loss per share to be between 50 cents and 36 cents and adjusted EBITDA in the range of 14 million dollars to 20 million dollars.
For fiscal 2021, the company expects net revenue to be between 1.52 billion dollars and 1.57 billion dollars, net income to be between 11 million dollars and 19 million dollars and diluted earnings per share to be between 34 cents and 58 cents and adjusted EBITDA in the range of 88 million dollars to 98 million dollars.