Updated from 10:33 a.m. EST

Shares of

Lands' End

(LE) - Get Report

took an unexpected turn upward on Thursday, even though the Internet and catalog clothing retailer missed Wall Street's earnings estimates by 17 cents a share and issued a profit warning for the first quarter.

The Dodgeville, Wis.-based company's shares gained 4 5/8, or 15%, to close at 35 1/2, following an earlier nosedive of 6% that brought the stock close to the 52-week low of 27 1/4 reached in February.

"If you run the model with 8% sales growth, a 7.5% pre-tax margin, you get earnings per share north of $2 -- that's what the Street's reacting to right now," said Kevin Silverman, an analyst at ABN Amro, after a conference call with the company. Silverman said this was the first time Lands' End gave very detailed guidance to Wall Street.

Earlier on Thursday, Lands' End said its net income for its fourth quarter of fiscal 2000 totaled $28.3 million, or 92 cents a diluted share.

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Wall Street had been expecting earnings of $1.09 a share in the quarter, according to a survey of analysts conducted by

First Call/Thomson Financial

.

In comparison, the company reported in the fourth quarter of fiscal 1999 net income of $25.7 million, or 84 cents a share, a year earlier. Excluding one-time charges, the company earned $1.07 a share.

The company attributed the poor quarterly showing to a steep 16.9% drop in revenues, to $449.6 million, from $541.2 million a year earlier.

"Sales for November and December, the two most important months of our critical holiday season, were down almost 15% from the prior year," the company said in a statement. "This was principally due to the planned strategy of mailing fewer catalog pages to reduce unprofitable mailings, the elimination of a key catalog at Thanksgiving time and a lower level of liquidation sales."

The company also warned that it expected to show flat sales in the first quarter and "somewhat weaker" earnings because of a drop in the number of pages in its mailings. But Lands' End said it expected "strong sales" in the second quarter of fiscal 2001, when it plans to increase circulation.

But Silverman, who rates Lands' End a buy and has not done any underwriting for it, said he thought the shortfall would be a one-time event as the company completes its transition to a more Internet-based business with trendier products.

"In January, they took their inventory all the way down before launching a new product offering," Silverman said. "This is a temporary situation."