Apparel company Land's End Inc (NASDAQ:LE) reported second-quarter financial results that missed expectations Tuesday after market close.
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Here are the highlights.
What Happened: The company reported second-quarter net revenue of $294.1 million, down 7.3% year-over-year. The revenue missed a Street consensus estimate of $322.4 million according to data from Benzinga Pro.
- U.S. Digital net revenue was $255.3 million in the second quarter, down 5.6% year-over-year. The company cited a slow start to the seasonal swim products as a factor in the declines.
- Third party net revenue was up 14.3% year-over-year to $21.6 million in the second quarter, with the company highlighting curated product assortments that were strong for Amazon and Macy's.
- Europe e-commerce net revenue was $19.6 million in the second quarter, down 14.8% year-over-year.
- Licensing and Retail net revenue was down 19.7% to $19.2 million in the second quarter. The company said licensing revenue was up 19% year-over-year in the quarter, with the performance of U.S.-company-operated stores offsetting the growth for the segment.
The company reported an adjusted loss of six cents per share, missing a Street consensus estimate of a loss of three cents per share.
"We're seeing clear, encouraging momentum across our business," Land's End CEO Andrew McLean said.
McLean said the company's transition to an asset-light model is helping to introduce new products, drive higher sales and improve customer loyalty.
The company ended the quarter with $21.3 million in cash and cash equivalents.
What's Next: The company highlighted its March announcement from the board of directors that a sale or merger was being explored to maximize shareholder value. The company said the process remains ongoing.
Guidance from the company calls for third quarter sales to be between $320 million and $350 million versus a Street estimate of $326.1 million. Third quarter earnings per share are expected to be between 10 cents and 22 cents per share, versus a Street estimate of 10 cents per share.
The company raised the top end its full-year sales guidance from a previous range of $1.33 billion to $1.40 billion to a new range of $1.33 billion to $1.45 billion. The Street estimate is currently $1.37 billion, according to data from Benzinga Pro.
The company also raised its full-year earnings per share guidance from a previous range of 48 cents to 86 cents per share to a new range of 62 cents to 88 cents per share, versus a Street estimate of 70 cents per share.
Chief Financial Officer Bernie McCracken said the company actively managed tariff headwinds and the new guidance reflects the expected impact of tariffs for the fiscal year.
LE Price Action: Land's End stock is down 4.86% to $13.50 in after-hours trading Tuesday versus a 52-week trading range of $7.65 to $19.88.
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