Lands' End Sales Slide 10%
04 September 2015 - 12:20AM
Dow Jones News
Lands' End Inc. said sales slid 10% in its second quarter as the
retailer saw declines across all its markets and products.
Chief Executive Federica Marchionni said the quarter was
challenging, and results "did not meet company expectations."
"However, we believe we have a firm understanding of the areas
of weakness that led to the performance decline and are in the
process of addressing them," she said in a news release.
Lands' End was spun off from Sears Holdings Corp. in April 2014
as Sears sought to focus on its core assets. Like many retailers,
Lands' End has struggled with weak sales amid a tough retail
industry characterized by intense competition and heavy
promotions.
For the quarter ended July 31, revenue in the company's direct
business—which includes Internet and catalog sales—fell 9.5% to
$264.7 million, driven by declines across all of its markets and
products. Lands' End said customers didn't take as well to its
spring and summer collections as last year, while its scaled-back
promotions also fell short.
Foreign exchange also brought down revenue by $8 million.
The direct business makes up the majority of Lands' End's
sales.
Retail-segment sales, which include Lands' End shops inside
Sears stores, tumbled 13% to $47.6 million amid fewer shops and a
7.5% decline in same-store sales.
In all, Lands' End reported a profit of $7.46 million, or 23
cents a share, down from $11.8 million, or 37 cents a share, a year
earlier.
Earnings included a benefit of five cents a share from the
reversal of a product recall accrual.
Net sales fell 10% to $312.4 million.
Gross margin narrowed to 46.3% from 48.5% a year earlier, hurt
by currency exchange rates, increased competition and air freight
costs.
Shares of Lands' End, up 6.6% in premarket trading, are down 56%
this year.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 03, 2015 10:05 ET (14:05 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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