Lands’ End, Inc. (LE) shares are trading higher after the company reported strong second-quarter earnings results. The company exceeded analyst expectations, posting a net revenue of $317.2 million, surpassing the consensus estimate of $307.41 million. While the company reported an adjusted loss per share of $0.02, it was better than the anticipated loss of $0.11.
The company’s global eCommerce net revenue reached $211.3 million, a slight decrease from the $218.7 million reported in the same quarter last year. Outfitters net revenue declined by 7.1% year-over-year to $63.2 million. However, third-party net revenue experienced a significant increase of 23.4% year-over-year, reaching $30.1 million.
Lands’ End saw impressive growth in its gross profit, which rose by 8.8% to $151.9 million, driven by an increase in gross margin by 470 basis points year-over-year to 47.9%. This improvement was attributed to factors such as the strength of product solutions and new offerings across various channels, a reduction in promotional activity, lower clearance inventory, and improved supply chain costs.
The company also actively repurchased $3.7 million worth of its common stock in the second quarter of fiscal 2024 under its share repurchase program announced on March 15, 2024. As of August 2, the program allows for the repurchase of up to an additional $20.3 million worth of stock until March 31, 2026. The company’s cash and cash equivalents totaled $27.9 million as of August 2, 2024.
Looking ahead, Lands’ End expects third-quarter revenue to fall between $300 million and $340 million, exceeding the analyst estimate of $312.85 million. The company anticipates an adjusted earnings per share (EPS) of $0.00 to $0.10 for the quarter, compared to the estimate of $0.04.
For the full fiscal year 2024, Lands’ End revised its revenue outlook downwards to a range of $1.35 billion to $1.43 billion, compared to the previous forecast of $1.36 billion to $1.45 billion and the consensus estimate of $1.399 billion. However, the company raised its adjusted EPS forecast to a range of $0.29 to $0.48 from $0.18 to $0.41, exceeding the current estimate of $0.33.
Bernie McCracken, Chief Financial Officer of Lands’ End, expressed satisfaction with the company’s second-quarter performance. He highlighted that both net revenue and Adjusted EBITDA were at the high end of their guidance range, accompanied by robust growth in Gross Merchandise Value. He further emphasized the company’s commitment to profitability and balance sheet efficiency, evidenced by the 9% increase in gross profit, driven by their sixth consecutive quarter of gross margin expansion.
As of Thursday’s closing, LE shares were trading up 1.46% at $15.33.
