Lands' End revenue drops, gross margin expands
Lands’ End on Thursday reported its financial results for its second quarter of fiscal 2016. The company was pleased with the expansion of its gross margin, which has improved year over year, but its sales softened by July after a strong May and June performance.
Federica Marchionni, Lands' End's Chief Executive Officer, stated "As we look ahead, product remains our first priority. We will also ensure that customers remain front and center with compelling messaging across all of our marketing channels. In addition, we plan to leverage our multi-branded website to expand brand awareness for Lands' End and broaden our customer base.”
Canvas by Lands’ End, the company’s contemporary line, has been a priority for the company. The new line launched two campaigns in 2016, the first from The Sartorialist Scott Schuman and the second with actress Emma Roberts. Lands’ End also launched a new Sport line of activewear.
Second quarter net revenue decreased to $292.0 million from $312.4 million in the prior year’s second quarter. Direct segment net revenue decreased 6.9% to $246.4 million, and retail segment net revenue decreased 4.3% to $45.5 million driven by a 2.5% decrease in same store sales and a reduction in the number of Lands' End Shops at Sears.
Gross margin expanded to 46.6% compared to 46.3% in the prior second quarter, net loss was $2.0 million, or $0.06 per diluted share, compared to net income of $7.5 million, or $0.23 per diluted share, in the previous year, and adjusted EBITDA was $7.3 million, a decrease from $19.6 million in 2015.
Cash and cash equivalents were $210.7 million, up from $208.4 million in 2015, and net cash was $1.7 million, a drop from $3.4 million in the prior year.
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