US retailer Lands' End posts 1.8% surge in net revenue in Q1 FY23

Global e-commerce net revenue decreased by 7.3 per cent in Q1 FY23, standing at $203.1 million compared to $219.1 million during the same period in FY22. Despite a 1.6-per cent year-on-year (YoY) increase in US e-commerce net revenue, driven by targeted promotions within swim and adjacent product categories, the company suffered a steep 42.5-per cent decline in international e-commerce net revenue. This was primarily due to decreased consumer demand in Europe and the closing of Lands’ End Japan at the end of FY22.

When removing the company’s Japan net revenue of $8.5 million from the Q1 FY22 figures, the decrease in global e-commerce net revenue is milder at 3.5 per cent YoY, while international e-commerce drops by 28.8 per cent, the company said in a press release.

The Outfitters segment was a bright spot in Q1 FY23, with net revenue soaring by 37.1 per cent to $74 million from $54.0 million in Q1 FY22.

Third Party net revenue saw a rise of 6.2 per cent to $23 million in Q1 FY23, an increase from $21.6 million in Q1 FY22, attributed largely to growth in existing and new online marketplaces.

The retail sector too saw a small surge, with net revenue up by 5.7 per cent to $9.5 million from $9 million in Q1 FY22. Same Store Sales in US company operated stores saw an increase of 9.5 per cent compared to the same period the previous fiscal year.

Gross profit for the quarter was $137.9 million, a rise of $8.7 million, or 6.7 per cent, from $129.2 million in Q1 FY22. Gross margin saw a significant increase of approximately 210 basis points to 44.6 per cent, compared to 42.5 per cent in Q1 FY22.

Selling and administrative expenses rose to $118.5 million, or 38.3 per cent of net revenue, up from $115.7 million or 38.1 per cent of net revenue in Q1 FY22, driven by higher employee-related expenses despite a decrease in digital marketing spending.

Lands' End reported a net loss of $1.7 million, or a loss of $0.05 per diluted share, in Q1 FY23 which is an improvement compared to the net loss of $2.4 million or $0.07 loss per diluted share in Q1 FY22, the release added.

Adjusted EBITDA showed a significant increase of 41.3 per cent, or $5.7 million, to $19.5 million compared to $13.8 million in Q1 FY22.

“Our team continued to successfully execute during the quarter and made strong progress against our strategic initiatives. As a result, we delivered year-over-year revenue and earnings growth, led primarily by our leading swim business and its natural vacation adjacencies, which collectively contributed to our strong margin performance and our 41 per cent increase in adjusted EBITDA. We continue to roll out our strategic initiatives and expect that the learnings from each successive quarter will enable further refinements and long-term value for our shareholders and other stakeholders,” said Andrew McLean, chief executive officer.

Fibre2Fashion News Desk (DP)