Lands’ End, Inc. (LE) is a multi-channel retailer of casual apparel, accessories, footwear, and household items. It offers products online through its website, third-party online marketplaces, company-owned and operated retail locations, and third-party retail locations. LE is headquartered in Dodgeville, Wisc.

The stock has declined 32.9% over the past year and 25.4% over the past six months to close yesterday’s trading session at $17.76. In addition, it is currently trading below its 52-week high of $44.40, which it hit on July 22, 2021.

In its latest earnings release, LE reported $0.21 earnings per share for the quarter, which was $0.10 lower than the Thomson Reuters average estimate of $0.31. Furthermore, the company projected EPS of $0.710 – $1.040 for the period, compared to the Thomson Reuters average estimate of $1.090. This led many analysts to downgrade the stock and lower their price targets.

Click here to checkout our Retail Industry Report for 2022

Here’s what could shape LE’s performance in the near term:

Mixed Financials

LE’s revenue increased 3.2% year-over-year to $555.38 million for the three months ended Jan. 28, 2022. Its cash and cash equivalents grew marginally for the year ended Jan. 28, 2022, to $34.30 million.

However, its operating income declined 52.5% from the prior-year quarter to $17.09 million. In addition, the company’s net income fell 64.3% from the prior-year quarter to $7.11 million, while its EPS decreased 65% year-over-year to $0.21 over this period.

Mixed Profitability

LE’s 42.3% trailing-12-months gross profit margin is 17.7% higher than the 35.9% industry average. However, its $70.57 million trailing-12-months cash from operations is 57.1% lower than the $164.50 million industry average. Also, its trailing-12-months ROA, net income margin, and ROC are 47.3%, 69.2%, and 8.8%, lower than their respective industry averages.

POWR Ratings Reflect Uncertainty

LE has an overall C rating, which equates to a Neutral in our proprietary POWR Ratings system. The POWR ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. LE has a D grade for Growth and a C for Quality. The company’s mixed financial and profitability are consistent with the Growth and Quality grade.

Among the 66 stocks in the A-rated Fashion – Luxury industry LE is ranked #53.

Beyond what I have stated above, you can view LE’s ratings for Momentum, Stability, Value, and Sentiment here.

Bottom Line

While the company reported stable revenue growth despite the ongoing supply chain crisis and other macroeconomic headwinds, the company missed consensus earnings estimates and failed to meet the projected EPS outlook for the coming quarter. In addition, analysts expect its EPS to decline 225% in the current quarter (ending April 30, 2022) and 56.3% next quarter (ending July 31, 2022). Therefore, we believe investors should wait before scooping up its shares.

How Does Lands’ End Inc. (LE) Stack Up Against its Peers?

While LE has an overall C rating, one might want to consider its industry peers, Hugo Boss AG (BOSSY), J. Jill Inc. (JILL), and Caleres Inc. (CAL), which have an overall A (Strong Buy) rating.

Click here to checkout our Retail Industry Report for 2022

LE shares were trading at $18.07 per share on Thursday morning, up $0.31 (+1.75%). Year-to-date, LE has declined -7.95%, versus a -5.73% rise in the benchmark S&P 500 index during the same period.

About the Author: Pragya Pandey

Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate. More...

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