Dive Brief:
- Lands’ End reported second quarter revenues of $323.3 million, representing a decrease of 7.9% from the $351.2 million reported during the same period last year, per an earnings statement released Thursday.
- The company’s global e-commerce revenue dropped 8.7% to $218.7 million, down from $239.7 million in the same period last year. In the U.S.-only market, e-commerce revenue fell 3.6%, which the company attributed to “promotional productivity within swim and adjacent product categories,” adding that the losses were “more than offset by lower markdown inventory sales.”
- E-commerce net revenue in Europe decreased 20.8%, which the company said was “primarily driven by assortment editing with a focus on key categories, reduced markdown inventory sales and continued macroeconomic challenges.”
Dive Insight:
Lands’ End Japan closed its operations at the end 2022. In the current earnings statement, the company reminded investors that second quarter fiscal results for last year included a Lands’ End Japan net revenue of $7.6 million.
Excluding Lands’ End Japan in the second quarter of fiscal 2022, global e-commerce net revenue for Q2 this year decreased 5.8%. However, the company added that compared to the second quarter of fiscal 2022, which included the results of Lands’ End Japan, international e-commerce, which excludes U.S. numbers, decreased 37.3%.
A spokesperson for Lands’ End did not respond to a request for comment ahead of press time.
The company also reported that its third party net revenue decreased 10.6% to $24.4 million from $27.3 million the previous year, and it attributed the decline to “weaker than expected online demand performance at Kohl’s.” It said the losses were partially offset by sales growth at Target, Macy’s and Amazon. In the fourth quarter of 2022, the brand had credited an 8% revenue boost in third-party sales to “sales growth in the Kohl’s marketplace and existing and new online marketplaces.”
“Our strong second quarter was characterized by a return to operating disciplines with a solutions focus on the customer,” Andrew McLean, Lands’ End CEO said in a statement. “That resulted in a significant 220 basis point year-over-year improvement in gross margin, a 30% year-over-year reduction in our inventory position and Adjusted EBITDA in line with the prior year and guidance.”
He added that the company’s cash provided by operations showed a $172 million improvement over last year.
“Newness, customer acceptance and results all benefit from our more disciplined inventory management approach which is continuing into the second half of 2023,” McLean said. “Going forward, our brand is focused on exceeding customer expectations, prioritizing profitable demand and creating long-term shareholder value.”
Former American Eagle exec McLean was appointed CEO-designate and a member of the board of directors late last year.
Clarification: This story has been updated to include the company's worldwide e-commerce terminology.
