Net revenue of US retailer Lands' End at $324.7 mn in Q3 FY23

The net revenue of Lands' End, a US-based retailer of casual clothing and home products, has decreased 12.5 per cent to $324.7 million in the third quarter (Q3) of fiscal 2023 (FY23) as compared to $371 million in the third quarter of fiscal 2022.

Global e-commerce net revenue was $216.4 million, a decline of 13.2 per cent from $249.2 million in the third quarter of fiscal 2022.  Third quarter of fiscal 2022 included Lands’ End Japan net revenue of $9.5 million. Lands’ End Japan closed at the end of fiscal 2022. Excluding Lands’ End Japan in the third quarter of fiscal 2022, Global e-commerce net revenue decreased 9.7 per cent, the company said in a press release.

Compared to the third quarter of fiscal 2022, US e-commerce net revenue decreased 10 per cent primarily driven by a concerted effort to reduce promotional activity and improved inventory management compared to the prior year resulting in higher margins with lower clearance inventory sales.

Compared to the third quarter of fiscal 2022, which included the results of Lands’ End Japan, international e-commerce net revenue lowered 30.9 per cent. Compared to the third quarter of fiscal 2022, Europe e-commerce net revenue reduced 8 per cent primarily driven by assortment editing with a focus on key categories, reduced clearance inventory sales and continued macroeconomic challenges.

In the third quarter of fiscal 2023, gross profit was $152.6 million, an increase of $4.2 million or 2.8 per cent from $148.4 million during the third quarter of fiscal 2022. Gross margin increased approximately 700 basis points to 47 per cent, compared to 40 per cent in the third quarter of fiscal 2022. The gross margin improvement was primarily driven by new products across the brand, strength in transitional outerwear and adjacent product categories, reduction in sales of clearance inventory and improvements in supply chain costs in the third quarter of fiscal 2023 compared to the prior year.

“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. Our deliberate efforts to generate more profitable sales resulted in increased gross profit dollars and gross margin expansion of approximately 700 basis points and drove adjusted EBITDA above the high end of our guidance range. We continued to build on our positive momentum, injecting newness across our assortment and increasing inventory turns, resulting in a 25 per cent reduction in year-over-year inventory,” said Andrew McLean, chief executive officer.

For the fourth quarter of fiscal 2023, the company expects net revenue to be between $490 million and $520 million, net income to be between $4 million and $7 million and diluted earnings per share to be between $0.13 and $0.22, adjusted EBITDA in the range of $27.5 million to $31.5 million and adjusted net income to be between $8 million and $11 million and adjusted diluted earnings per share to be between $0.25 and $0.34.