Lands’ End Q3 losses widen, sales dive across all segments

U.S. fashion brand Lands’ End reported a net revenue decrease of 12.5% to $324.7 million for the third quarter, hit by double-digit declines in its global e-commerce segment and dips in its third party revenue.

The Dodgeville, WIsconsin-based company said ​global e-commerce net revenue was $216.4 million, plummeting 13.2%. Excluding Lands’ End Japan, which shuttered operations in 2022, global e-commerce net revenue decreased 9.7%.

U.S. e-commerce revenue decreased 10%, driven by a concerted effort to reduce promotional activity and improved inventory management, while international e-commerce net revenue decreased 30.9%. Outfitters net revenue was $74.3 million, a decrease of 8%, and third party revenue fell 22.4%, attributed to a weaker performance at Kohl’s, partially offset by continued growth of marketplace sales through other existing marketplaces.  

The company said net loss was $112.4 million, or $3.52 loss per diluted share for the quarter, compared to net loss of $4.7 million or $0.14 loss per diluted share in the third quarter last year.  The loss last quarter included a non-cash goodwill impairment charge of $106.7 million due to the decline in the company’s stock price and market capitalisation, it added.

“Our third quarter results reflect the continued strong execution of our solutions-based strategy to deliver compelling product for our customers and value to our shareholders. Our deliberate efforts to generate more profitable sales resulted in increased gross profit dollars and gross margin expansion of approximately 700 basis points and drove Adjusted EBITDA above the high end of our guidance range,” ​said Andrew McLean, chief executive officer, Lands’ End.

“We continued to build on our positive momentum, injecting newness across our assortment and increasing inventory turns, resulting in a 25% reduction in year-over-year inventory. Looking ahead, by continuing to play to our strengths and delivering our customers the solutions they need, we’re confident in our ability to drive profitable sales through the holiday season to finish the year strong.”

For fiscal 2023, the company said it expects net revenue to be between $1.45 billion and $1.48 billion, and net loss to be between $118 million and $115 million.