Strong Global eCommerce revenue and profit growth
Global eCommerce grew revenue 19.6% compared to the same period last year
Net Income of $7.2 million, doubling Net Income of $3.6 million in the same period last year
Adjusted EBITDA increases 52.3% to $28.6 million compared to the same period last year

DODGEVILLE, Wis., Dec. 03, 2020 (GLOBE NEWSWIRE) -- Lands' End, Inc. (NASDAQ: LE) today announced financial results for the third quarter ended October 30, 2020.

Fiscal Third Quarter Financial Highlights:

For the third quarter, net revenue increased 5.9% to $360.0 million, compared to $340.0 million in the third quarter last year.
- Global eCommerce net revenue increased 19.6% for the third quarter, driven by US eCommerce increasing 13.9% and International eCommerce growing 50.7% as compared to the prior period.
- Outfitters net revenue declined 25.6% as Outfitters continues to be negatively impacted by the COVID-19 pandemic.
Gross margin increased approximately 10 basis points to 45.4% as compared to 45.3% in the prior period. Gross margin benefited from improved promotional strategies and continued use of analytics, offset by increased shipping costs and surcharges as well as sales mix from third-party business.
Selling and administrative expenses decreased $0.5 million to $134.9 million or 37.5% of net revenue, compared to $135.4 million or 39.8% of net revenue, in the third quarter of last year. The approximately 230 basis point decrease was driven by strong control of operating expenses and structural costs.
Net income was $7.2 million or $0.22 per diluted share, as compared to net income of $3.6 million or $0.11 per diluted share in the third quarter of fiscal 2019.
Adjusted EBITDA increased 52.3% to $28.6 million in the third quarter of fiscal 2020 compared to $18.8 million in the third quarter of fiscal 2019.

Jerome Griffith, Chief Executive Officer and President, stated, “We were very pleased with our third quarter performance. Our teams executed at an exceptional level to achieve strong results despite the challenges created by COVID-19. The investments we put toward leveraging data analytics to inform our strategies around product, eCommerce and marketing continued to pay dividends in driving growth in new customers and strong retention rates. We have also made great strides in driving improved profitability. To that end, in addition to once again generating double-digit growth in our global eCommerce business, we delivered 52% Adjusted EBITDA growth in the third quarter. This performance underscores the momentum behind the Lands’ End brand and the progress we are making in delivering long-term profitable growth.”

Fiscal Third Quarter Business Highlights:

Successfully launched Lands’ End product on Kohls.com and in 150 Kohl’s stores on September 30, 2020. Based on strong early results, the Company plans to expand the Lands’ End assortment and increase the number of points of distribution to 300 Kohl’s stores in 2021.
Completed the refinancing of the Company’s term loan on September 9, 2020, with the closing of a $275.0 million Term Loan Facility and an increase in its asset-based senior secured credit facility to a maximum of $275.0 million in borrowings.

Balance Sheet and Cash Flow Highlights

Cash and cash equivalents were $56.1 million as of October 30, 2020, compared to $15.9 million as of November 1, 2019.

Net cash used in operations was $26.1 million for the 39 weeks ended October 30, 2020, compared to $125.0 million for the 39 weeks ended November 1, 2019.

Inventories, net, was $499.8 million as of October 30, 2020, and $499.9 million as of November 1, 2019.

As of October 30, 2020 the Company had $155.0 million of borrowings and $104.7 million of availability under its asset-based senior secured credit facility. Additionally, as of October 30, 2020, the Company had $275.0 million of Term Loan Facility debt.

Outlook

Jim Gooch, Chief Operating Officer and Chief Financial Officer, stated, “We are pleased to have refinanced our term loan during the third quarter, in a very difficult debt market. We believe the strong momentum in our business, along with our enhanced financial flexibility, positions us optimally to continue to execute our long-term growth strategies, as we continue to navigate the continued challenges of the COVID-19 pandemic. While we are encouraged by the continued resilience and performance of our global eCommerce business, the fourth quarter has gotten off to a slow start in the US, due to the impact of unseasonably warm weather on our heavy outerwear category.”

For the fourth quarter of fiscal 2020 the Company now expects:

Net revenue to be between $500.0 million and $520.0 million.
Net income to be between $13.5 million and $17.5 million, and diluted earnings per share to be between $0.41 and $0.53.
Adjusted EBITDA in the range of $38.0 million to $43.0 million.

Conference Call

The Company will host a conference call on Thursday, December 3, 2020, at 8:30 a.m. ET to review its third quarter financial results and related matters. The call may be accessed through the Investor Relations section of the Company's website at http://investors.landsend.com or by dialing (866) 753-5836.

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 the momentum behind the Lands’ End brand and of the progress it is making toward delivering long-term profitable growth; the Company’s assessment of its ability to execute its long-term growth strategies and the expected benefits of those strategies; plans to expand the assortment of Lands’ End products available in Kohl’s and the number of Kohl’s stores carrying Lands’ End product; and 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. 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 Gooch
Chief Operating Officer and Chief Financial Officer
(608) 935-9341

Investor Relations:
ICR, Inc.
Jean Fontana
(646) 277-1214
Jean.Fontana@icrinc.com

-Financial Tables Follow-

LANDS’ END, INC.
Condensed Consolidated Balance Sheets
(Unaudited)

(in thousands, except per share data)	October 30, 2020			November 1, 2019			January 31, 2020*
ASSETS
Current assets
Cash and cash equivalents	$	56,137		$	15,859		$	77,148
Restricted cash		2,135			1,830			2,149
Accounts receivable, net		34,238			38,125			50,953
Inventories, net		499,759			499,855			375,670
Prepaid expenses and other current assets		52,731			47,538			39,458
Total current assets		645,000			603,207			545,378
Property and equipment, net		149,342			155,051			157,665
Operating lease right-of-use asset		36,699			31,380			38,665
Goodwill		106,700			110,000			110,000
Intangible asset, net		257,000			257,000			257,000
Other assets		5,413			5,204			4,921
TOTAL ASSETS	$	1,200,154		$	1,161,842		$	1,113,629
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current borrowings on ABL Facility	$	—		$	80,000		$	—
Short-term portion of long-term debt		13,750			5,150			5,150
Accounts payable		174,061			174,312			158,436
Lease liability - current		5,359			6,344			5,864
Other current liabilities		147,903			103,396			114,116
Total current liabilities		341,073			369,202			283,566
Long-term borrowings on ABL Facility		155,000			—			—
Long-term debt, net		248,700			379,606			378,657
Lease liability - long-term		39,169			30,971			39,841
Deferred tax liabilities		65,800			56,109			57,651
Other liabilities		5,487			5,469			5,532
TOTAL LIABILITIES		855,229			841,357			765,247
Commitments and contingencies
STOCKHOLDERS’ EQUITY
Common stock, par value $0.01 authorized: 480,000 shares; issued and outstanding: 32,608, 32,373 and 32,382, respectively		326			324			324
Additional paid-in capital		366,959			358,648			360,656
(Accumulated deficit) Retained earnings		(8,701	)		(25,126	)		390
Accumulated other comprehensive loss		(13,659	)		(13,361	)		(12,988	)
TOTAL STOCKHOLDERS' EQUITY		344,925			320,485			348,382
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,200,154		$	1,161,842		$	1,113,629

^*Derived from the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2020.

LANDS’ END, INC.
Condensed Consolidated Statements of Operations
(Unaudited)

	13 Weeks Ended						39 Weeks Ended
(in thousands, except per share data)	October 30, 2020			November 1, 2019			October 30, 2020			November 1, 2019
Net revenue	$	359,982		$	340,023		$	889,073		$	900,723
Cost of sales (excluding depreciation and amortization)		196,527			185,848			496,041			497,589
Gross profit		163,455			154,175			393,032			403,134

Selling and administrative		134,890			135,417			352,164			374,521
Depreciation and amortization		9,627			8,076			27,791			23,101
Other operating expense (income), net		255			(225	)		7,913			(99	)
Operating income		18,683			10,907			5,164			5,611
Interest expense		9,005			6,121			19,232			20,190
Other (income) expense, net		(250	)		(166	)		910			(1,640	)
Income (loss) before income taxes		9,928			4,952			(14,978	)		(12,939	)
Income tax expense (benefit)		2,752			1,346			(5,887	)		(6,713	)
NET INCOME (LOSS)	$	7,176		$	3,606		$	(9,091	)	$	(6,226	)
NET INCOME (LOSS) PER COMMON SHARE
Basic:	$	0.22		$	0.11		$	(0.28	)	$	(0.19	)
Diluted:	$	0.22		$	0.11

Lands' End Announces Third Quarter Fiscal 2020 Results