Lands' End Reports Improvement in 2Q Earnings

Lands' End Inc. yesterday reported that total revenue for the second fiscal quarter reached $285.8 million, a 4 percent increase from $275.6 million posted during the same quarter last year.

The company's fiscal second quarter ended July 27.

Net income during the quarter amounted to $3 million, while diluted earnings per share were 10 cents. This compared with a net loss of $1.9 million, or a diluted per-share loss of 6 cents, during the prior-year period.

The Dodgeville, WI-based company reported that sales in its core business segment — represented by the primary monthly, prospecting and tailored clothing catalogs — increased 6 percent and were led by the coed and women's divisions. In the specialty business segment, Kids and Coming Home produced mid-single-digit growth as corporate sales experienced a single-digit drop.

“Our revenue growth, relative to other retailers, reinforces our belief that product offerings are in tune with our customers,” president/CEO Dave Dyer said during yesterday's conference call. “Our core businesses have shown weakness over the past few years, so I'm gratified that we have now seen multiple solid quarters of growth in this largest business segment.

“During the quarter, we have also improved the productivity of our catalog pages,” he said.

Dyer also mentioned several plans for the fall, including the launch of a special catalog featuring extended sizes for women, the introduction of the Alumni collection and continued expansion of an intimate apparel line.

Compared with the previous year, the company plans a reduction in page circulation during the third quarter followed by an increase during the fourth quarter.

Gross profit totaled $124.9 million during the quarter, representing 43.7 percent of total revenue, compared with $121.3 million, or 44 percent of total revenue, during the same quarter last year.

During fiscal 2002, which will conclude Feb. 1, 2002, the company expects a single-digit sales increase, continued improvement compared with the previous year regarding gross profit margin, and an increase in diluted earnings per share of at least 20 percent for the year.

Don Hughes, senior vice president and chief financial officer, said fewer overall catalog pages were mailed.

“Our house file continues to strengthen, as we have added about 200,000 names for the first half of the year, up more than 6 percent,” he said. “We expect to somewhat exceed last year's second-half financial performance.

“We anticipate $15 million fewer liquidation sales in the third quarter as a result of the improved quality of our inventory.”

Mindy Meads, executive vice president for merchandising and design, reported strong performance in women's sleepwear. She said the women's division was up 11 percent, while “Kids had an increase of 8 percent where circulation for the quarter was down double digits.” She also said hiking shoes “is a business that we did extremely well with.”

The Home division grew 6 percent even though the number of circulated pages was down.

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