Lands’ End Q3 gross margin 45.3% vs. 44.2% a year ago

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Lands’ End profit rises but revenue slips, because of fewer shops in Sears stores

Lands’ End Inc. reported Tuesday a fiscal third-quarter profit that rose from a year ago while revenue declined, while gross margin and same-store sales increased. The stock was still inactive in premarket trading. The casual clothing and accessories retailer said net income for the quarter to Nov. 1 grew to $3.6 million, or 11 cents a share, from $3.3 million, or 10 cents a share, in the year-ago period. Revenue fell 0.5% to $340.0 million, reflecting 89 fewer Lands’ End Shops at Sears. Excluding the Sears effect, revenue would have increased 4.7%. The FactSet average estimate of two analysts was for EPS of 9 cents and revenue of $349.8 million. Same-store sales for U.S. company owned stores grew 8.3% and e-commerce revenue grew 7.4%. Gross margin increased to 45.3% from 44.2%, citing a more disciplined promotional strategy. The company expects fourth-quarter revenue of $545.0 million to $555.0 million. “While sales were burdened by unseasonably warm temperatures, our transitional product resonated with customers and sales trends improved as the colder weather arrived,” said Chief Executive Jerome Griffith. The stock has run up 62.6% over the past three months but was still down 17.2% year to date, while the S&P 500 has rallied 24.2% this year.

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