Lands' End, Inc. (NASDAQ: LE) has announced its financial results for the second quarter ending August 2, 2024, revealing a series of notable accomplishments and improvements over the prior year's performance.
The company reported a mid-single-digit increase in gross merchandise value (GMV) compared to the second quarter of the previous year. However, net revenue decreased to $317.2 million from $323.3 million in the second quarter of fiscal 2023. Despite this, Lands' End managed to achieve a sixth consecutive quarter of improvement in inventory, with a significant 21% reduction year-over-year.
Although global ecommerce net revenue decreased to $211.3 million, U.S. ecommerce net revenue saw a 3.9% dip, primarily due to the transition of kids and footwear products to a licensing model, lower promotional activity, and improved inventory management. Excluding the impact of this transition, U.S. ecommerce revenue actually increased by mid-single digits year-over-year. On the other hand, international ecommerce net revenue increased by 0.9% compared to the second quarter of fiscal 2023.
The company's gross profit saw a substantial increase of $12.3 million, reaching $151.9 million, with the gross margin experiencing a significant 470 basis point improvement to 47.9% compared to the prior year. This improvement was attributed to various factors, including stronger product solutions, reduced promotional activity, clearance inventory reduction, and improved supply chain costs.
Selling and administrative expenses increased to $135.5 million or 42.7% of net revenue, compared to $123.9 million or 38.3% of net revenue in the second quarter of fiscal 2023. The increase was driven by higher digital marketing spend focused on new customer acquisition and other factors.
Despite a net loss of $5.3 million, or $0.17 loss per diluted share, Lands' End demonstrated progress, as the adjusted net loss was reported at $0.7 million, or $0.02 loss per diluted share, primarily due to a non-cash charge related to long-lived asset impairment and restructuring costs.
Furthermore, the company's adjusted EBITDA for the second quarter of fiscal 2024 increased to $17.1 million from $15.8 million in the second quarter of fiscal 2023.
Lands' End also highlighted its achievements in improving inventory efficiency, cash flow, and balance sheet management. The company reported a 21% decrease in inventories, with net cash provided by operating activities at $4.9 million for the 26 weeks ended August 2, 2024, compared to $54.8 million for the same period in the prior year.
Looking ahead, the company has raised its full-year profit guidance and provided an outlook for the third quarter of fiscal 2024. Lands' End expects net revenue to be between $300.0 million and $340.0 million, with gross merchandise value anticipated to deliver mid-to-high single digits percentage growth.
In addition, the company has adjusted its expectations for fiscal 2024, with net revenue projected to be between $1.35 billion and $1.43 billion, and gross merchandise value expected to deliver mid-to-high single digits percentage growth.
As a result of these announcements, the company's shares have moved -1.2% on the market, and are now trading at a price of $15.11. If you want to know more, read the company's complete 8-K report here.
