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Bull of the Day: Lands End (LE)

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Lands' End, Inc. (LE - Free Report) is seeing strong demand for clothing and accessories this year as consumers return to work and school. This Zacks Rank #1 (Strong Buy) is expected to grow its revenue by 18% this year.

Lands' End is a retailer that sells men's, women's and children's clothing, accessories, footwear and home products both in retail stores and online at landsend.com.

A Record Second Quarter

On Sep 2, Lands' End reported its fiscal 2021 second quarter results and beat the Zacks Consensus Estimate by $0.05. Earnings were $0.48 versus the consensus of $0.45.

Net revenue jumped 23.1% to a record $384.1 million from the 2020 quarter at $312.1 million. But that was a pandemic quarter.

Comparing revenue to 2019's Q2, which was pre-pandemic, and revenue was still up 28.8%.

Global ecommerce revenue rose 7.7% to $285.4 million from last year but was up 32.5% from Q2 of fiscal 2019, which was pre-pandemic. It was boosted by increased digital marketing spend and an improved product line that was popular with customers.

Outfitters net revenue soared 75.4% to $65.5 million from $37.4 million due to stronger demand within the travel-related national accounts and school uniform customers.

It also saw gains from offering its swimwear assortment in an additional 150 Kohl's stores.

Maintained Second Half Outlook

Despite all the good news, and continued strong customer demand, supply chain challenges were still hitting Lands' End and the industry.

As a result, it maintained its full year outlook even though business is bullish.

There is just one analyst covering Lands' End on Zacks.com.

That analyst is bullish as the Zacks Consensus Estimate has risen to $1.45 from $1.00 in the last 60 days.

That's earnings growth of 339% as it made just $0.33 in fiscal 2020.

Fiscal 2023 is also looking bullish, as the Zacks Consensus is calling for $1.65, or another 13.8% earnings growth.

Is the Sell-Off a Buying Opportunity?

Lands' End shares are up 55% over the last year as retail has recovered from the 2020 coronavirus sell-off.

However, the shares have taken a 31% dive in the last month.

Zacks Investment Research
Image Source: Zacks Investment Research

They now trade with a forward P/E of 17.1.

That's cheaper than competitors Duluth Holdings (DLTH - Free Report) and Columbia Sportswear Company (COLM - Free Report) , which are trading with forward P/E so 19.5 and 21.5, respectively.

And Lands' End is maximizing its partnerships with Kohl's and Reese Witherspoon's Draper James, which will launch its third shared collection this holiday season.

For those investors looking for an apparel retailer for the economic recovery, Lands' End is one to keep on your short list.


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