Lands’ End reports $20.6M loss amid crisis
Dodgeville company was on track to reach goals before pandemic
Lands’ End’s turnaround predictably was set back by the COVID-19 crisis, with the company reporting a preliminary loss of $20.6 million for its quarter ended May 1.
Revenue fell to $217 million in the recent quarter, down from $262.4 million for the comparable period last year.
Lands’ End loss of $20.6 million, or 64 cents a share, for the quarter compared with a loss of $6.8 million, or 21 cents a share, for the quarter ended May 3, 2019.
The company’s stock fell to about 6.37 cents a share, down 11.7%, in mid-day trading — roughly 65% below its 52-week high of $18.39 a share.
In response to the pandemic, Lands’ End, based in Dodgeville, reduced operating expenses and other costs by furloughing employees, temporarily reducing salaries for its executives and corporate staff and eliminating the jobs of approximately 10% of its corporate staff, the company said.
It also reduced its inventory for the fall and holiday season and cut its planned capital expenditures to about $20 million from about $40 million for the 2020 fiscal year.
Lands’ End expects revenue to recover in the second half of its fiscal year, barring a potential second wave in the pandemic, Jim Gooch, chief operating officer and chief financial officer, said in statement.
But Gooch said the company’s long-term targets — which were on track prior to pandemic — now will be met later than initially planned.
For the second quarter, the company expects net revenue to decline in the mid-to-high single digits.
“While COVID-19 has created a complex environment on many fronts, we believe that our business model provides the flexibility to mitigate many of the challenges this has created across the industry,” Jerome Griffith, CEO and president, said in a statement.
The company did see a rebound in its online sales — which account for roughly 80% off its sales — beginning in mid-April.
“We believe these trends demonstrate the resiliency of our business” Griffith said in the statement.
The company also sees opportunities to expand its customer base through initiatives, such as its planned launch of Lands’ End on kohls.com and in 150 Kohl’s retail stores this fall.