Lands’ End profits fall, but tax reform boosted 2017 results

March 22, 2019
Lands' End headquarters in Dodgeville.

Black Friday weekend sales hit a record in 2018 for Lands’ End, giving the Dodgeville apparel retailer $502.3 million in revenue for the fourth quarter.

That’s a decrease from the $510.6 million Lands’ End brought in during the 2017 fourth quarter, but that figure included $25.9 million from an extra week in its fiscal accounting period, the company said Thursday.

Net income for the fourth quarter that ended Feb. 1, 2019, was $16.2 million, or 50 cents a share, less than half the $39.8 million in earnings, or $1.24 a share, for the same period the previous year. But the 2017 fourth quarter earnings also included $21.9 million reaped from the federal tax reform bill.

The results show “continued momentum,” Lands’ End CEO Jerome Griffith said, with seven consecutive quarters of revenue growth, if the 53rd week of the fiscal year is not counted in the total.

For the full 2018 fiscal year, Lands’ End reported a profit of $11.6 million, or 36 cents a share, on revenue of $1.45 billion compared with a $28.2 million profit, or 88 cents a share, on revenue of $1.41 billion — with 2017 figures affected by the 53rd week of sales and the big tax benefits.

Griffith said Lands’ End is continuing to move its focus more toward online efforts, with 125 fewer Lands’ End shops at Sears and four more company-operated stores open.

In the fourth quarter, mobile activity on Lands’ End’s website topped desktop traffic for the first time, and sales on mobile devices “grew more than three times as fast as the total,” Griffith said.

“So we are expanding initiatives centered on the customers’ experience by offering personalized messaging, improved product presentation and a faster website,” he told a conference call with financial analysts.

The company plans to boost online marketing next year and has started selling key items on Amazon in the U.S. and in Germany even as it has pared back the number of pages in its printed catalogs.

Only 49 shops at Sears remained open as of Dec. 31, while Lands’ End had 16 of its own stores running. Another 10 to 15 are expected to open this year, with the goal of 40 to 60 Lands’ End stores operating in several years.

Lands’ End projects sales of $1.45 billion to $1.5 billion for 2019 with net income of somewhere from $8 million to $14 million, chief financial officer and executive vice president Jim Gooch said.

Lands’ End stock closed Thursday at $16.12, down $1.09, or 6.3 percent.