Lands’ End LE is seeing both an improving business as the economy recovers from the COVID pandemic but also faces the challenges of the supply chain issues. This Zacks Rank #5 (Strong Sell) has seen its earnings estimates cut since it reported fiscal third quarter earnings in early Dec 2021.
Lands’End is a retailer which makes casual clothing, accessories, footwear for women, men and kids. It also sells home products. It operates brick and mortar stores, sells online at landsend.com, on third party online marketplaces and at third-party retail locations such as Kohl’s, which has expanded into 300 Kohl’s stores.
A Miss in the Fiscal Third Quarter
On Dec 2, Lands’ End reported its fiscal third quarter results and missed on the Zacks Consensus Estimate by $0.02.
It reported earnings of $0.22 versus the Consensus of $0.24.
Net revenue rose 4.4% to $375.8 million from $360 million in the year ago quarter. It was also a 10.5% increase from the third quarter of fiscal 2019, which was pre-pandemic.
Lands’ End had inventory issues to start the quarter due to supply chain challenges. Global eCommerce revenue fell 6% to $261.2 million from $277.8 million a year ago due to its lack of inventory.
It’s outfitters revenue saw a big jump, gaining 38.9% to $86.1 million from $62 million a year ago. It was also 3.4$ higher than third quarter in 2019.
The jump was due to stronger demand within Lands’ Ends’ travel-related national accounts and from school uniform customers.
By Cyber Week in November, the Company said that sales increased in the high single digits as a result of strong demand online and in the stores as well as improved in-stock positions.
In-stock positions have returned to normal historical levels in time for the holiday season.
Earnings Estimates Cut
However, the one analyst on Zacks.com still cut fiscal 2022 and fiscal 2023 earnings estimates in the last week.
This year’s Zacks Consensus Estimate has fallen to $1.11 from $1.45. That’s still earnings growth of 236% as Lands End only made $0.33 last year, during the start of the pandemic.
The analyst also cut estimates for fiscal 2023 to $1.40 from $1.65 before the earnings report. That’s still another 26% earnings growth for next year.
Shares Plunge
Lands’ End shares have sunk 27% in the last month and are now down 7.8% year-to-date even though earnings are improving over last year.
Image Source: Zacks Investment Research
Shares aren’t cheap. They trade with a forward P/E of 18.3.
Investors interested in picking up some Lands’ End shares for the recovery next year, might want to wait to see if they can get the shares even cheaper on further weakness in the retailers.
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