Lands’ End, a popular online retailer, reported a $139.0 million gross profit in the first quarter of fiscal 2024, up 0.8% from the previous year. They offer a wide range of products including apparel, swimwear, and home goods.
Gross profit increased by $13.8 million or 11.0% in the first quarter of fiscal 2023, excluding $12.7 million from Delta Air Lines business. Gross margin also rose by 410 basis points to 48.7% compared to the prior year’s 44.6%. The improvement was driven by product solutions and newness, lower promotional activity, reduced clearance inventory, and supply chain cost improvements.
In the first quarter of 2024, GMV increased by a low single-digit percentage compared to the same period in 2023. However, net revenue decreased by 7.8% to $285.5 million compared to $309.6 million in the first quarter of fiscal 2023. Excluding revenue from the conclusion of the Delta Air Lines business in 2023, net revenue actually increased by 1.0%. Third Party net revenue saw a significant increase to $37.5 million, up 62.9% from $23.0 million in the first quarter of fiscal 2023. This increase was mainly driven by revenue generated from licensing arrangements, including the sale of Lands’ End produced inventory to a licensee. Online marketplaces also saw increased gross profit due to improved gross margin resulting from focusing on higher quality sales.
Lands’ End’s first quarter performance in 2023 showed strong momentum with an increase in Gross Merchandise Value, gross profit dollars, and gross margin expansion. The company’s value creation strategy focuses on being an innovative, asset-light brand ready for life’s journeys, leading to operational and financial success. CEO Andrew McLean highlighted the positive results and growth opportunities for the brand. However, selling and administrative expenses went up by $8.9 million, reaching $127.4 million or 44.6 percent of net revenue due to lower revenues and increased digital marketing spend for new customer acquisition. This led to a 630 basis points increase compared to the previous year’s first quarter.
The company’s efforts to increase profitability through better inventory management has led to positive results that exceeded expectations. Excluding the impact of the Delta Air Lines contract, the company saw a 60 per cent improvement in Adjusted EBITDA in the first quarter. Chief Financial Officer Bernie McCracken highlighted these achievements as a strong foundation for future growth.
In the second quarter of fiscal 2024, the company projects net revenue between $290.0 million and $320.0 million, with mid to high-single digits growth in Gross Merchandise Value. Adjusted EBITDA is anticipated to fall between $14.0 million and $17.0 million.
