Dodgeville, WI—Since Sears Holdings spun it off as a separate entity earlier this year, Lands’ End, known for its direct selling, is doing just fine.
In its first quarter report since the spin off, Lands’ End last week reported nearly a 50% jump in its profit, and a sales uptick.
For the quarter ended Lands’ End booked a profit of $10.9 million, or 34 cents a share, compared to $7.3 million, or 23 cents a share, in the year-ago period.
The quarter included $1.9 million in interest expense, partly tied to costs from a loan that Lands’ End used to pay $500 million in dividends to a Sears subsidiary prior to the spinoff.
Net revenue grew 3.6% to $330.5 million. Comparable store sales rose 3.4%, primarily due to its 251 shops inside Sears’ locations.
Gross margin rose to 49% from 48.5%, which input costs were up 2.4%.
Lands’ End said its direct business, which includes Internet and catalog sales, accounted for 84% of its total sales. The balance came from retail stores including the Sears shops and 14 standalone stores.
A decline in the number of Lands’ End shops at Sears drove a 2.3% drop in the retail segment’s net merchandise sales, which checked in at $54.4 million. Direct sales totaled $276 million, up 4.8% year-over-year.
Analysts say Lands’ End has fared well with the transition into an independent company Without the oversight of Sears Holdings, Lands’ End said it was able to take a more nuanced and focused approach to promotions.
“Turns out, despite more than five decades of business and years in the decidedly dated closet of Sears brands, Lands’ End has the look of a thoroughly contemporary retailer,” Bloomberg News observed.