Lands’ End, Inc. (NASDAQ: LE) today raised its guidance for the
fourth quarter ending January 30, 2021. In addition, the Company
provided an update on its long-term financial targets.
Jerome Griffith, Lands’ End’s Chief Executive Officer and
President, stated, "We are pleased with the performance of our
global eCommerce channel throughout the holiday season. We
continued to emphasize our Let’s Get Comfy initiative in our
product and marketing to address the work-from-home lifestyle and
casual apparel demand. Our focus on delivering high quality product
with compelling values, combined with our commitment to operating
as a digitally focused company has enabled us to navigate the
pandemic with resiliency and drive strong results in our consumer
business, and as a result we are increasing our guidance for the
fourth quarter.”
Mr. Griffith continued, “Over the last three years we have made
great strides in executing across our strategic pillars of getting
the product right, being a digitally-led organization, operating a
uni-channel strategy and driving enhancements in our business
processes and infrastructure, and we continue to see ample growth
opportunity in front of us. Although the COVID pandemic has
impacted our business, we are encouraged by our performance and
based on the progress we have made across our strategies and our
strong competitive positioning, we are increasing our long-term
financial targets and are confident we can achieve them in
2023.”
For the Fourth Quarter of Fiscal 2020 the Company
Expects:
- Net revenue to be
between $528 million and $533 million, an increase from prior
guidance of $500 million to $520 million.
- Net income to be
between $17.5 million and $19.0 million and diluted earnings per
share to be between $0.54 and $0.58, an increase from prior
guidance of Net income between $13.5 million and $17.5 million and
diluted earnings per share between $0.41 and $0.53.
- Adjusted EBITDA to
be between $43 million and $45 million, an increase from prior
guidance of $38 million to $43 million.
Long-Term Financial Targets:
- Revenue of $1.9
billion to $2.1 billion, representing a CAGR of 10% to 14% over the
next three years, assuming and driven by:
-
Organic growth in both U.S. and international eCommerce
businesses
-
Extended recovery in Outfitters business post-pandemic
-
Third-party channel expansion
- Adjusted EBITDA
margin in high-single-digit range, assuming and as a result of:
- Stable to slightly
higher gross margin
- Improved SG&A
rate
ICR Conference Participation
The Company will be participating in the 23rd Annual ICR
Conference, held virtually, on Tuesday, January 12, 2021 with a
fireside chat presentation at 3:30 PM Eastern Time.
The audio portion of the fireside chat presentation will be
webcast live over the internet and can be accessed at the investor
relations section of its website at http://investors.landsend.com.
An online archive will be available for a period of 90 days
following the presentation. In addition, the Company plans to post
an investor presentation to the investor relations section of its
website prior to the webcast.
About Lands' End, Inc.
Lands' End, Inc. (NASDAQ:LE) is a leading
uni-channel retailer of casual clothing, accessories, footwear and
home products. We offer products online at www.landsend.com, on
third party online marketplaces and through retail locations. We
are a classic American lifestyle brand with a passion for quality,
legendary service and real value, and seek to deliver timeless
style for women, men, kids and the home.
Forward-Looking Statements
This press release contains forward-looking statements that
involve risks and uncertainties, including statements regarding the
Company’s assessment of its ability to execute its long-term growth
strategies and the expected benefits of those strategies; the
Company’s belief and assessment of future growth opportunities; the
Company’s outlook and expectations as to net revenue, net income,
earnings per share and Adjusted EBITDA for the fourth quarter of
fiscal 2020; and the Company’s long-term financial targets for
revenue and Adjusted EBITDA margin, the assumptions and drivers of
such targets, including organic growth in US and international
eCommerce businesses, an extended recovery in the Outfitters
business post-pandemic, expansion of the third-party channel,
stable to slightly higher gross margin and improved SG&A rate,
and the expected timing of the achievement of the long-term
financial targets. The following important factors and
uncertainties, among others, could cause actual results to differ
materially from those described in these forward-looking
statements: the impact of COVID-19 on operations, customer demand
and the Company’s supply chain, as well as its consolidated results
of operation, financial position and cash flows; the Company may be
unsuccessful in implementing its strategic initiatives, or its
initiatives may not have their desired impact on its business; the
Company’s ability to offer merchandise and services that customers
want to purchase; changes in customer preference from the Company’s
branded merchandise; the Company’s results may be materially
impacted if tariffs on imports to the United States increase and it
is unable to offset the increased costs from current or future
tariffs through pricing negotiations with its vendor base, moving
production out of countries impacted by the tariffs, passing
through a portion of the cost increases to the customer, or other
savings opportunities; customers' use of the Company’s digital
platform, including customer acceptance of its efforts to enhance
its eCommerce websites, including the Outfitters website; customer
response to the Company’s marketing efforts across all types of
media; the Company’s maintenance of a robust customer list; the
Company’s retail store strategy may be unsuccessful; the Company’s
relationship with Kohl’s may not develop as planned or have its
desired impact; the Company’s dependence on information technology
and a failure of information technology systems, including with
respect to its eCommerce operations, or an inability to upgrade or
adapt its systems; fluctuations and increases in costs of raw
materials; impairment of the Company’s relationships with its
vendors; the Company’s failure to maintain the security of
customer, employee or company information; the Company’s failure to
compete effectively in the apparel industry; legal, regulatory,
economic and political risks associated with international trade
and those markets in which the Company conducts business and
sources its merchandise; the Company’s failure to protect or
preserve the image of its brands and its intellectual property
rights; increases in postage, paper and printing costs; failure by
third parties who provide the Company with services in connection
with certain aspects of its business to perform their obligations;
the Company’s failure to timely and effectively obtain shipments of
products from its vendors and deliver merchandise to its customers;
reliance on promotions and markdowns to encourage customer
purchases; the Company’s failure to efficiently manage inventory
levels; unseasonal or severe weather conditions; the adverse effect
on the Company’s reputation if its independent vendors do not use
ethical business practices or comply with applicable laws and
regulations; assessments for additional state taxes; incurrence of
charges due to impairment of goodwill, other intangible assets and
long-lived assets; the impact on the Company’s business of adverse
worldwide economic and market conditions, including economic
factors that negatively impact consumer spending on discretionary
items; potential indemnification liabilities to Sears Holdings
pursuant to the separation and distribution agreement in connection
with the Company’s separation from Sears Holdings; the ability of
the Company’s principal shareholders to exert substantial influence
over the Company; potential liabilities under fraudulent conveyance
and transfer laws and legal capital requirements; and other risks,
uncertainties and factors discussed in the "Risk Factors" section
of the Company’s Annual Report on Form 10-K for the fiscal year
ended January 31, 2020, and subsequent Quarterly Reports on Form
10-Q, as well as in the Company’s Current Report on Form 8-K dated
June 2, 2020. The Company intends the forward-looking statements to
speak only as of the time made and does not undertake to update or
revise them as more information becomes available, except as
required by law.
Contacts:
Lands' End, Inc.James GoochChief Operating Officer and Chief
Financial Officer(608) 935-9341
Investor Relations:ICR, Inc.Jean Fontana(646)
277-1214Jean.Fontana@icrinc.com
Use and Definition of Non-GAAP Financial
Measures in Relation to Guidance
Adjusted EBITDA - In addition to our Net income,
for purposes of evaluating operating performance, we use an
Adjusted Earnings Before Interest, Taxes, Depreciation and
Amortization ("Adjusted EBITDA"), which is adjusted to exclude
certain significant items as set forth below. Our management uses
Adjusted EBITDA to evaluate the operating performance of our
business, as well as for executive compensation metrics, for
comparable periods. Adjusted EBITDA should not be used by investors
or other third parties as the sole basis for formulating investment
decisions as it excludes several important cash and non-cash
recurring items.
The methods used by the Company to calculate its
non-GAAP financial measures may differ significantly from methods
used by other companies to compute similar measures. As a result,
any non-GAAP financial measures presented herein may not be
comparable to similar measures provided by other companies.
While Adjusted EBITDA is a non-GAAP measurement,
management believes that it is an important indicator of operating
performance, and useful to investors, because:
- EBITDA excludes the effects of
financings, investing activities and tax structure by eliminating
the effects of interest, depreciation and income tax.
- Other significant items, while
periodically affecting our results, may vary significantly from
period to period and have a disproportionate effect in a given
period, which affects comparability of results.
Reconciliation of Non-GAAP Financial
Information to GAAP
Fiscal 2020 Fourth
Quarter Guidance |
|
13 Weeks Ended |
|
(in millions) |
|
January 29, 2021 |
|
Net income |
|
$ |
17.5 |
|
- |
$ |
19.0 |
|
Depreciation, interest, other
income, taxes and other adjustments |
|
|
25.5 |
|
- |
|
26.0 |
|
Adjusted EBITDA |
|
$ |
43.0 |
|
- |
$ |
45.0 |
|
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