Lands’ End Inc. delivered a fourth-quarter loss as it missed analysts estimates., but managed to bring in revenue that beat the expectations.
The net loss for the quarter was $39 million, or $1.23 per diluted share, a drop from last year’s net income of $33 million, or $1.03 per diluted share. Adjusted earnings per share totaled 71 cents and was 1 cent below the 72 cents FactSet projected. The adjusted net income was $22.6 million.
Revenue for the three months ending Jan. 29 decreased to $473.5 million from $504.6 million a year earlier. This topped the FactSet estimate of $468 million. Gross margin in the quarter was 42 percent, a drop from last year’s 44 percent for the same period.
Retail segment net revenue decreased by 11.5 percent to $64.4 million, driven by an 8.7 percent decrease in same-store sales and a reduction in the number of Lands’ End shops in Sears stores.
“While we made meaningful progress in the business throughout 2015, these efforts are not yet reflected in our financial performance,” said chief executive officer Federica Marchionni. “This past year was a transition year for Lands’ End, during which we were intently focused on creating a solid foundation from which to grow over the long-term.”
Lands’ End faced two events that affected the company’s fiscal earnings. They had to recall selected styles of children’s sleepwear that didn’t meet federal flammability standards. The company actually had lower-than-expected returns even though they tried to contact customers. The other event was a non-cash impairment charge related to the write-down of the Lands’ End trade name.
For the full year, the company’s net revenue was $1.42 billion as compared to 2014’2 $1.56 billion. The net loss for the year was $19.5 million or 61 cents per diluted share versus last year’s net income of $73.8 million or $2.31 per diluted share.
The company did not give forward guidance, but Marchionni did say that the company should be able to show sequential improvement beginning in the second quarter. Lands’ End stock has fallen 34 percent for the past year.
Lands’ End recently found itself in hot water with some of its more conservative customers. The Wisconsin-based apparel brand included an interview with women’s right activist Gloria Steinem for its legend series in its catalogue. However, many conservative customers objected to Steinem’s stance on abortion causing them to complain to the company and say they would quit shopping there. Lands’ End pulled the interview from its Web site, even though there was no mention of abortion. The drama continues to play out as some religious schools are canceling uniform orders from Lands’ End.