In a challenging third quarter, Lands’ End, the U.S. fashion brand, faced a 12.5% dip in net revenue, plummeting to $324.7 million. Key contributors to this decline included double-digit reductions in the global e-commerce sector and third-party revenue.
Headquartered in Dodgeville, Wisconsin, Lands’ End reported a significant 13.2% decrease in global e-commerce net revenue, reaching $216.4 million. Even excluding Lands’ End Japan, which ceased operations in 2022, there was a noteworthy 9.7% decline in global e-commerce net revenue.
U.S. e-commerce revenue experienced a 10% reduction, driven by a strategic effort to scale back promotional activities and enhance inventory management. International e-commerce net revenue faced the most significant impact, with a sharp 30.9% decline. Outfitters net revenue reached $74.3 million, indicating an 8% decrease, while third-party revenue dropped by 22.4%, primarily due to weaker performance at Kohl’s. This was partially offset by the continued growth of marketplace sales through other existing channels.
The financial report disclosed a net loss of $112.4 million, translating to a $3.52 loss per diluted share for the quarter. This starkly contrasts the third quarter of the previous year, which saw a net loss of $4.7 million or $0.14 loss per diluted share. Notably, this quarter’s loss included a non-cash goodwill impairment charge of $106.7 million, reflecting the decline in the company’s stock price and market capitalization.
Andrew McLean, CEO of Lands’ End, commented on the results, stating, “Our third quarter results reflect the continued strong execution of our solutions-based strategy to deliver compelling products for our customers and value to our shareholders.» He highlighted the company’s deliberate efforts to generate more profitable sales, resulting in increased gross profit dollars and a gross margin expansion of approximately 700 basis points, exceeding the Adjusted EBITDA guidance range.
McLean expressed confidence in the company’s ability to rebound, citing positive momentum, new product introductions, increased inventory turns, and a 25% reduction in year-over-year inventory. Looking ahead, he emphasized the commitment to playing to their strengths and delivering customer solutions, expressing confidence in driving profitable sales through the holiday season to finish the year on a strong note.
For fiscal 2023, Lands’ End anticipates net revenue between $1.45 billion and $1.48 billion, with a projected net loss ranging from $118 million to $115 million.
