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Uni-channel retailer Lands’ End (LE) is trading ~17% lower after reporting Q2 results, as supply chain challenges and macroeconomic factors impacted earnings forecasts.
Q2 GAAP EPS of -$0.07 beats by $0.06, while revenue of $351.2M (-8.6% Y/Y) beats by $7.86M.
Q2 net revenue decreased with 16% Y/Y global eCommerce net revenue reduction. U.S. eCommerce net revenue decreased by 14.4%, while international eCommerce revenue reduced by 23.9%.
Meanwhile, Outfitters segment’s net revenue increased 7.7% due to stronger demand within school uniform households and national accounts.
Third party segment’s net revenue increased 42.9%, because of growth in Kohl’s online marketplace and growth in other new and existing online marketplaces.
For Q3, net revenue is expected to be between $375.0M and $390.0M vs. $398.4M consensus. The outlook takes into account ~9M of incremental transportation expenses due to the global supply chain challenges.
For FY22, net revenue guidance is brought down to between $1.60B and $1.64B from prior outlook of $1.62B-$1.68B vs. $1.64B consensus.
Here, the guidance considers ~35M of incremental transportation expenses due to the global supply chain challenges and gross margin improvement in 2H, as higher supply chain costs are lapped.
Gross margin decreased ~530 basis points to 41%, mainly because of an incremental $11.7M of transportation costs, in addition to increased promotional activity and margin mix from growth in the Third party segment.
As of Jul. 29, cash and cash equivalents were $23.5M, compared to $39.2M as of Jul. 30, 2021.
