Lands’ End First-Quarter Losses Land With a Thud

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Did you know that a big chunk of Lands' End's  (LE) - Get Report business comes from making uniforms for the likes of airlines, cruise operators and even private schools?

A quick look around will tell you that none of those sectors, including education, are pining to place big orders on new outfits these days, a big reason behind Lands' End's wider-than-expected first-quarter loss reported on Tuesday.

The preppy nautical-focused retailer and uniform maker reported a net loss of $20.6 million, or 64 cents a share, vs. a loss of $6.8 million, or 21 cents a share, a year ago. Analysts polled by FactSet had been expecting a loss of 56 cents a share.

Sales dropped 17.3% to $217 million, down from $262.4 million a year ago and below analysts’ forecasts of $218 million. 

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The culprit: a 16.5% drop in U.S. e-commerce sales during the quarter, combined with the closure of its brick-and-mortar locations starting in mid-March, the company said. 

While a tough end to the quarter, Lands’ End CEO Jerome Griffith expressed optimism that a rebound in global e-commerce sales beginning in mid-April and continuing through May “demonstrate the resiliency of our business.”

The company also remains on track to launch Lands’ End on kohls.com and in 150 Kohl’s (KSS) - Get Report retail stores this fall, Griffith said – something that should help boost sales.

However, for the second quarter, the company said it expects net revenue to decline to the “mid to high single digits,” in part held back by its “outfitters” business, which includes making uniforms for the likes of American Airlines (AAL) - Get Report and other large travel-industry companies as well for various schools and small businesses.

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