Lands' End Q3 results show turnaround has a long way to go

A pullback in promotions, reduced catalog circulation, and unseasonably warm weather helped make for a very disappointing third quarter for Lands' End, whose effort to turnaround its business is having trouble taking hold.



The apparel retailer's sales fell 10% to $334.4 million in the quarter ended Oct. 31, compared to $373.1 million last year.



Net income fell 41% to $10.7 million, compared to $18 million in the third quarter last year.



“While our third quarter financial results did not meet our expectations, which we attribute to both external and internal factors, we made important progress on a number of initiatives that we believe will position the company for the future," said Federica Marchionni, CEO, Lands’ End’s. "Sales in the third quarter were impacted by the challenging retail environment, as well as unseasonably warm weather which negatively affected the performance of our cold weather categories. Our sales performance was also the result of a pullback in promotions to focus on higher margin sales, reduced catalog circulation to lapsed and less profitable customers, and a lack of product acceptance."



Marchionni said the company has revamped its product presentation and messaging in its catalog and made improvements to its website to expand its online business. It also came out with a fully shoppable digital catalog and opened its first-ever pop-up stores, on New York’s Fifth Avenue and in Boston’s Copley Square.”

This is the fourth straight disappointing earnings report for Lands' End, which is trying to turn around its business with efforts to attract younger, more fashion-conscious customers while retaining its tradition-minded base.



“Looking ahead, we remain intently focused on the continued execution of our strategic initiatives, particularly around marketing and branding, as well as in our ecommerce and catalog businesses. We remain committed to our brand strategy which is grounded in bringing the quality, value and service that Lands’ End is known for, to a broader customer base,” Marchionni said.