Lands' End raises full-year EBITDA guidance, stock climbs

DODGEVILLE, WI – Lands’ End has seen an uptick in its share price today, with a 7.52% increase to $7.15 as of this writing. This boost came as the company announced an upward revision of its full-year adjusted EBITDA guidance. The new forecast range is set between $80 million and $84 million, a $3 million raise from its previous minimum estimates.

The apparel retailer also disclosed a smaller-than-anticipated adjusted loss for the third quarter (Q3) ending on October 27. The reported adjusted loss was $112.4 million or an adjusted per-share loss of 11 cents, narrower than the expected range of a 13-20 cents per-share loss. Despite the reduced losses, the company’s revenue experienced a downturn, falling to $324.7 million in Q3.

Additionally, Lands’ End managed to decrease its inventory by 25%, which may reflect a strategic move to align stock levels with anticipated demand. A significant part of the Q3 losses included a goodwill impairment charge valued at $106.7 million. This charge was attributed to declines in the company’s stock price and market capitalization.

Looking ahead at the net loss projections for the full year, Lands’ End has set the expectation between $115 million and $118 million. This revised forecast contrasts with earlier predictions that ranged from a loss of $4.5 million to a potential profit of up to $1 million.

Investors responded favorably to the news, despite the company’s shares being down around 3% year-to-date before today’s rise.

InvestingPro Insights

In light of Lands’ End’s recent financial updates, a look at the metrics and insights from InvestingPro could offer investors additional context. The company’s strategic inventory reduction and revised EBITDA guidance are steps towards financial stability, which align with some positive trends observed in the market.

InvestingPro data suggests that there are companies within the retail sector that are managing to navigate the current economic landscape effectively. For instance, W.P. Carey Inc. (WPC), a real estate investment trust with retail exposure, has shown strong fundamentals, with a market capitalization of $14.16 billion and a robust gross profit margin of 92.39% in the last twelve months as of Q3 2023. Additionally, WPC’s revenue growth in the same period was a notable 22.15%.

InvestingPro Tips for WPC highlight a high earnings quality, with free cash flow exceeding net income, and a consistent increase in earnings per share. These factors, combined with a dividend that has been raised for 12 consecutive years, could be indicative of a resilient business model in the retail sector. Moreover, WPC’s P/E ratio stands at 17.9, which, when coupled with a low PEG ratio of 0.41, suggests that the stock might be trading at a reasonable price relative to its earnings growth potential.

For investors looking to delve deeper into such metrics and tips, InvestingPro offers a comprehensive analysis. The platform currently lists over 12 additional InvestingPro Tips for WPC, which can be accessed with a subscription. Now, with a special Cyber Monday sale, subscriptions are available at up to 60% off. Plus, use the coupon code sfy23 to get an additional 10% off a 2-year InvestingPro+ subscription. This could be an opportune time for investors to gain access to valuable insights that could inform their investment decisions in the retail sector and beyond.

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