Lands’ End on Tuesday announced that first quarter net revenue fell to $268.4 million from $273.4 million in the year-ago quarter, missing the FactSet consensus analyst estimate cited by MarketWatch for $270 million.
Direct segment net revenue in the quarter fell 1.7% to $228.3 million and its retail segment net revenue fell 2.8% to $40.0 million, primarily due to fewer Lands' End Shops at Sears. Q1 same-store sales rose 2.1%.
Losses widened to $7.8 million or 24 cents per share, from $5.8 million or 18 cents per share in the year ago quarter, missing the FactSet consensus analyst estimate cited by MarketWatch for a loss of 22 cents per share.
In his statement Tuesday, Jerome Griffith accentuated the positive, saying the quarter’s results were in line with the company’s expectations and noted progress in “key areas,” including growth in buyer files, improved product sell-through and positive same-store sales. “[A]ll of which are encouraging signs that we are making the right decisions as we work to drive the business forward,” he said.
“Looking ahead, we are focused on building on this momentum and leveraging our strong brand and loyal customer base, as we concentrate on several key initiatives over the remainder of the year,” he added. Those include developing a brand-appropriate product assortment relevant to customers, realigning marketing and further leverage its e-commerce platform (which he characterized as strong).
Indeed, long a catalog company, the apparel retailer continues to find much of its sales still from that catalog and its e-commerce operations. But Lands’ End continues to suffer from its association with Sears, which has been slouching toward death for years now and which spun off the apparel retailer in 2013. Many Lands’ End stores are actually still concessions within Sears stores.
The retailer does retain loyalty among many of its core customers, but that was muddied during the tenure of former CEO Federica Marchionni, who arrived in 2015 from Dolce & Gabbana’s USA unit and stepped down in September. Marchionni ran things from New York and re-introduced the Canvas brand that failed to resonate with either core customers or its intended millennial customers. Last quarter, the retailer wrote down $6.7 million of prior-season Canvas inventory, which had a 50 basis point negative impact.