Land’s End flounders after Sears split

Separating itself from Sears Holdings a year ago has not helped Land’s End financial footing judging from the company’s fourth quarter profit and same store sales decline.

Land’s End sales declined 4.9% to $504.6 million and net income declined 28% to $33.1 million in the fourth quarter ended Jan. 30. Merchandise sales and services were negatively impacted by a $3.4 million product recall in the quarter that negatively impacted net income by $2.6 million.

Same store sales in the company’s retail segment decreased 7.9%, driven by lower sales in the company's Lands' End Shops at Sears. On January 30, 2015, the Company operated 236 Lands' End Shops at Sears, 14 global Lands' End Inlet stores and five newly opened international shop-in-shops compared to 274 Lands' End Shops at Sears and 16 global Lands' End Inlets the prior year.

In the company’s direct segment, merchandise sales and services declined 2.6% to $431.8 million primarily attributable to a decrease in the international business and the product recall, partially offset by an increase in business and school uniform sales in the U.S. On a positive note, the company said cash and cash equivalents increased to $221.5 million at year end compared to $22.4 million the prior year.

Meanwhile, cash provided by operations during the full year period increased to $211.1 million compared to $114.9 million the prior year. The company’s inventories also declined 18.5% with fewer Land’s End Shops at Sears to $301.4 million from 369.9 million the prior year.