Lands’ End closed out 2017 on an upbeat note, with its first 12-month profit since 2014, and its CEO attributes the positive numbers to increasing its online customer base in the United States.
In return, investors gave the Dodgeville apparel company a pat on the back, bumping Lands’ End’s stock up 26 percent on Thursday, the day the earnings were released.
Lands’ End reported net income of $39.8 million, or $1.24 a share, on $510.6 million in revenue for its fourth fiscal quarter that ended Feb. 2 compared with a net loss of $94.8 million, or $2.96 a share, on revenue of $458.8 million for the same period last year.
The most recent quarter had one extra week — 14 weeks instead of 13 weeks in the fiscal 2016 fourth quarter — and that accounted for $25.9 million of the sales.
The company also recorded a $21.9 million tax benefit during the quarter because of federal tax reform.
For the full 2017 fiscal year, Lands’ End earned $28.2 million, or 88 cents a share, on sales of $1.4 billion, compared with a net loss of $109.8 million, or $3.43 a share, on $1.3 billion in sales for fiscal 2016.
“We’re making tremendous progress,” CEO Jerome Griffith said. He said most of the gains have come from Lands’ End’s online shoppers from the U.S.
“We put a lot of work into that, with user experience upgrades and more efficient use of digital marketing,” he said.
In addition to the second consecutive quarterly profit, this is Lands’ End’s third straight quarter of sales growth after 11 consecutive quarters of sales declines. A big reason for the increase is the addition of new customers — 30 percent more than in the 2016 fourth quarter, Griffith said.
“We have been able to stabilize the brand, really by returning to our roots,” he said.
Griffith became CEO one year ago, on March 6, 2017, after executive stints with fashion brands Esprit and Tommy Hilfiger, and then as CEO for Tumi Holdings, a high-end luggage company that Samsonite International bought for $1.8 billion in 2016.
When he took the helm of Lands’ End, Griffith called it “a heritage brand with a great value proposition” and said he would like the company to open more brick-and-mortar stores.
The company has 11 of its own stores, including one in Madison. The number of Lands’ End Shops within Sears stores has been steadily shrinking, ending the year at 174, down 42 from a year ago. Leases for the remaining Sears locations will expire over the next two years.
In an interview Thursday, Griffith said he expects to open the first new Lands’ End stand-alone store in late April or early May, in the Chicago area. He said he plans to launch four to six stores in 2018, with the potential of 40 to 60 new stores within five years.
Meanwhile, Griffith said Lands’ End began shipping the first uniforms to Delta airline employees in January, in a contract that will clothe about 60,000 Delta employees worldwide, from flight attendants to airplane maintenance workers.
Lands’ End has not disclosed how much money the deal will provide, but Griffith said, “Delta was our largest launch ever in our outfitters business.”
Lands’ End won a contract in January to provide uniforms for more than 50,000 American Airlines employees. Griffith said that is still in the design phase, in “very early days.”
Lands’ End stock closed Thursday at $21.25 a share, up $4.40, or 26 percent, over Wednesday’s close and then bumped up a bit further on Friday to close at $21.45 a share – its highest level since last May.
The company has about 4,000 employees nationwide, including about 3,000 in Dodgeville.