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Lands' End (NASDAQ:LE) reported revenue fell 2.8% year-over-year in Q4 to $514.9M.
Global e-commerce revenue was down 2.3% during the quarter. Excluding the impact of Lands’ End Japan closing in Q4 of FY22, global e-commerce revenue decreased 0.6%. Outfitters segment revenue decreased 11.3% to $53.7M. The decrease was noted to be primarily driven by the conclusion of the Delta Air Lines contract in Q1 of 2023. Third Party segment revenue was up 3.3% Y/Y to $40.5M. The gain was primarily attributed to the continued growth of online sales through existing marketplaces.
The retailer's gross margin rate increased approximately 550 basis points to 38.0% in Q4 from 32.5% a year ago. The gross margin improvement was said to be predominantly driven by new products across the brand, strength in transitional outerwear and adjacent product categories, reduction in sales of clearance inventory, and improvements in supply chain costs. Adjusted EBITDA was $31.7M vs. $24.2M a year ago. EPS slotted in at $0.25 vs. $0.23 consensus and -$0.04 a year ago.
Lands' End (LE) highlighted that it achieved a 29.1% reduction in year-over-year inventory during the quarter through improved management.
Looking ahead, Lands' End (LE) sees Q1 revenue of $255M to $285M and adjusted EBITDA of $9M to $11M.
CFO outlook: "We expect to continue to prioritize high-quality sales and improved cash flows, which we believe will enable Lands’ End to drive continued gross profit and margin expansion. When comparing today’s outlook to the prior year period, keep in mind that the first quarter of fiscal 2023 included the inventory sales from the conclusion of the Delta Air Lines contract, positively impacting revenue by over $25 million and generating approximately $12 million in Adjusted EBITDA."
Shares of Lands' End (LE) rose 0.50% in premarket trading. The stock is down 2.7% on a year-to-date basis. Short interest stands at 6.6% of the total float.