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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): September 1, 2022

 

 

LANDS’ END, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware		001-09769		36-2512786
(State or Other Jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

1 Lands’ End Lane Dodgeville, Wisconsin		53595
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (608) 935-9341

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (See General Instructions A.2. below):

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	LE	The NASDAQ Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

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Item 2.02Results of Operations and Financial Condition.

 

On September 1, 2022, Lands’ End, Inc. (the “Company”) announced its financial results for its second quarter ended July 29, 2022. A copy of the Company’s press release containing this information is being furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

 

The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing. The information in this Item 2.02, including Exhibit 99.1 hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.

 

Item 9.01Financial Statements and Exhibits.

 

(d) Exhibits

Exhibit Number		Description
99.1		Press Release of Lands’ End, Inc. dated September 1, 2022
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

 

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SIGNATURE

 

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

		LANDS’ END, INC.
Date: September 1, 2022		By:  /s/ James Gooch                                                                .
		Name: James Gooch
		Title: President and Chief Financial Officer

 

 

Exhibit 99.1

 

 

Lands’ End Announces Second Quarter Fiscal 2022 Results

 

 

 

DODGEVILLE, Wis., September 1, 2022 (GLOBE NEWSWIRE) – Lands’ End, Inc. (NASDAQ: LE) today announced financial results for the second quarter ended July 29, 2022.

 

Jerome Griffith, Chief Executive Officer, stated, “We are very pleased with our performance this quarter, exceeding our revenue and profit expectations. Despite global supply chain and consumer challenges, our teams continue to successfully navigate these challenges. Our performance this quarter across our four strategic growth pillars – product, digital, uni-channel distribution, and infrastructure – gives us confidence in the long-term opportunity ahead.”

 

Second Quarter Financial Highlights:

 

 

 

 

 

 

 

 

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Second Quarter Business Highlights:

 

 

Balance Sheet and Cash Flow Highlights

 

Cash and cash equivalents were $23.5 million as of July 29, 2022, compared to $39.2 million as of July 30, 2021.

 

Inventories, net, was $569.2 million as of July 29, 2022, and $464.3 million as of July 30, 2021.

 

Net cash used in operations was $117.5 million for the 26 weeks ended July 29, 2022, compared to net cash provided by operations of $30.5 million for the 26 weeks ended July 30, 2021. The increase in Net cash used in operations was primarily attributable to earlier receipts and in-transit shipments for fall and holiday inventory compared to prior years and increased transportation costs due to the global supply chain challenges.

 

As of July 29, 2022, the Company had $135.0 million of borrowings outstanding and $126.2 million of availability, based upon the loan cap calculated in the borrowing base under its asset-based senior secured credit facility, compared to $25.0 million of borrowings as of July 30, 2021. Additionally, as of July 29, 2022, the Company had $250.9 million of term loan debt outstanding compared to $264.7 million of term loan debt outstanding as of July 30, 2021.

 

During the second quarter, the Company repurchased $2.4 million of the Company’s common stock under its previously announced $50 million share repurchase program.

 

Outlook

 

Jim Gooch, President and Chief Financial Officer, stated, “We are pleased to have delivered profitability ahead of our expectations despite continued supply chain challenges and macroeconomic factors impacting our customer. Despite these ongoing industry-wide challenges, we remain confident in our digitally-led business model and our ability to execute on our strategic initiatives.”

 

For the third quarter of fiscal 2022 the Company expects:

 

This third quarter outlook assumes approximately $9.0 million of incremental transportation expenses due to the global supply chain challenges.

 

For fiscal 2022 the Company now expects:

 

This full year outlook assumes approximately $35.0 million of incremental transportation expenses due to the global supply chain challenges and gross margin improvement in the second half of the year, as higher supply chain costs are lapped.

 

 

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Conference Call

 

The Company will host a conference call on Thursday, September 1, 2022, at 8:30 a.m. ET to review its second quarter financial results and related matters. The call may be accessed through the Investor Relations section of the Company’s website at http://investors.landsend.com.

 

About Lands’ End, Inc.

 

Lands’ End, Inc. (NASDAQ:LE) is a leading uni-channel retailer of casual clothing, accessories, footwear and home products. We offer products online at www.landsend.com, through our own Company Operated stores and through third-party distribution channels. We are a classic American lifestyle brand with a passion for quality, legendary service and real value. We seek to deliver timeless style for women, men, kids and the home.

 

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Forward-Looking Statements

 

This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding the Company’s ability to successfully navigate global supply chain and consumer challenges; the Company’s confidence in its long-term opportunity; the Company’s confidence in its business model and its ability to execute on and the expected results of its strategic initiatives; and the Company’s outlook and expectations as to net revenue, net income, earnings per share and Adjusted EBITDA for the third quarter of fiscal 2022 and for the full year of fiscal 2022, capital expenditures for fiscal 2022, assumptions regarding incremental transportation expenses due to the global supply chain challenges in the third quarter of fiscal 2022 and full year of fiscal 2022 and gross margin improvement in the second half of fiscal 2022, as higher supply chain costs are lapped. The following important factors and uncertainties, among others, could cause actual results to differ materially from those described in these forward-looking statements: global supply chain challenges have resulted in a significant increase in inbound transportation costs and delays in receiving product; further disruption in the Company’s supply chain, including with respect to its distribution centers, third-party manufacturing partners and logistics partners, caused by limits in freight capacity, increases in transportation costs, port congestion, other logistics constraints, and closure of certain manufacturing facilities and production lines due to COVID-19 and other global economic conditions; the impact of global economic conditions, including inflation, on consumer discretionary spending; the impact of COVID-19 on operations, customer demand and the Company’s supply chain, as well as its consolidated results of operation, financial position and cash flows; the Company may be unsuccessful in implementing its strategic initiatives, or its initiatives may not have their desired impact on its business; the Company’s ability to offer merchandise and services that customers want to purchase; changes in customer preference from the Company’s branded merchandise; the Company’s results may be materially impacted if tariffs on imports to the United States increase and it is unable to offset the increased costs from current or future tariffs through pricing negotiations with its vendor base, moving production out of countries impacted by the tariffs, passing through a portion of the cost increases to the customer, or other savings opportunities; customers’ use of the Company’s digital platform, including customer acceptance of its efforts to enhance its eCommerce websites, including the Outfitters website; customer response to the Company’s marketing efforts across all types of media; the Company’s maintenance of a robust customer list; the Company’s retail store strategy may be unsuccessful; the Company’s Third Party channel may not develop as planned or have its desired impact; the Company’s dependence on information technology and a failure of information technology systems, including with respect to its eCommerce operations, or an inability to upgrade or adapt its systems; fluctuations and increases in costs of raw materials as well as fluctuations in other production and distribution-related costs; impairment of the Company’s relationships with its vendors; the Company’s failure to maintain the security of customer, employee or company information; the Company’s failure to compete effectively in the apparel industry; legal, regulatory, economic and political risks associated with international trade and those markets in which the Company conducts business and sources its merchandise; the Company’s failure to protect or preserve the image of its brands and its intellectual property rights; increases in postage, paper and printing costs; failure by third parties who provide the Company with services in connection with certain aspects of its business to perform their obligations; the Company’s failure to timely and effectively obtain shipments of products from its vendors and deliver merchandise to its customers; reliance on promotions and markdowns to encourage customer purchases; the Company’s failure to efficiently manage inventory levels; unseasonal or severe weather conditions; the adverse effect on the Company’s reputation if its independent vendors do not use ethical business practices or comply with applicable laws and regulations; assessments for additional state taxes; incurrence of charges due to impairment of goodwill, other intangible assets and long-lived assets; the impact on the Company’s business of adverse worldwide economic and market conditions, including inflation and other economic factors that negatively impact consumer spending on discretionary items; potential indemnification liabilities to Sears Holdings pursuant to the separation and distribution agreement in connection with the Company’s separation from Sears Holdings; the ability of the Company’s principal stockholders to exert substantial influence over the Company; potential liabilities under fraudulent conveyance and transfer laws and legal capital requirements; and other risks, uncertainties and factors discussed in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2022. The Company intends the forward-looking statements to speak only as of the time made and does not undertake to update or revise them as more information becomes available, except as required by law.

 

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CONTACTS

 

Lands’ End, Inc.

James Gooch

President and Chief Financial Officer

(608) 935-9341

 

Investor Relations:

ICR, Inc.

Bruce Williams

(332) 242-4303

Bruce.Williams@icrinc.com

 

-Financial Tables Follow-

 

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LANDS’ END, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

 

 

 

*Derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2022.

 

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LANDS’ END, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

 

 

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Use and Definition of Non-GAAP Financial Measures

Adjusted EBITDA - In addition to our Net income (loss) determined in accordance with GAAP, for purposes of evaluating operating performance, the Company uses an Adjusted EBITDA measurement. Adjusted EBITDA is computed as Net income (loss) appearing on the Condensed Consolidated Statements of Operations net of Income tax expense/(benefit), Interest expense, Depreciation and amortization and certain significant items as set forth below. Our management uses Adjusted EBITDA to evaluate the operating performance of our business for comparable periods and as a basis for an executive compensation metric. The methods used by the Company to calculate its non-GAAP financial measures may differ significantly from methods used by other companies to compute similar measures. As a result, any non-GAAP financial measures presented herein may not be comparable to similar measures provided by other companies. Adjusted EBITDA should not be used by investors or other third parties as the sole basis for formulating investment decisions as it excludes a number of important cash and non-cash recurring items.

 

While Adjusted EBITDA is a non-GAAP measurement, management believes that it is an important indicator of operating performance, and useful to investors, because:

 

 

 

 

 

Reconciliation of Non-GAAP Financial Information to GAAP

(Unaudited)

 

The following table sets forth, for the periods indicated, selected income statement data, both in dollars and as a percentage of Net revenue:

 

 

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LANDS’ END, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)