Lands’ End posted first-quarter results that saw declines in profits and sales.
For the three months ended May 1, net income dropped to $1.7 million, or 5 cents a diluted share, from $10.9 million, or 34 cents, a year ago. Net sales fell 9.4 percent to $299.4 million from $330.5 million.
The company said changes in currency exchange rates negatively impacted sales by $9 million, while retail sales declined by 8.2 percent to $253.4 million and the direct-to-consumer channel decreased by 15.5 percent to $46 million.
The company also had higher interest expense due to higher debt levels in connection with a term loan issued before the company’s spinoff from Sears Holdings Corp. in April 2014.
Federica Marchionni, chief executive officer, said, “While there is certainly work to be done, the company has the powerful elements to be a meaningful global lifestyle brand over time.” She noted that the next 12 to 18 months will be an important transformational period, which will be spent in part on upgrading product design, enhancing the technology platform and building brand awareness.
The company said same-store sales in the retail segment fell 15.5 percent driven in part by a decrease in the number of Lands’ End shops at Sears. As of May 1, there were 235 Lands’ End Shops at Sears, 14 global Lands’ End Inlet stores and five international shops-in-shop. That’s compared with a year ago when there were 251 Lands’ End shops at Sears and 14 global Lands’ End Inlet stores.