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Here's How Lands' End (LE) is Poised Ahead of Q4 Earnings

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Lands' End, Inc. (LE - Free Report) is likely to witness an increase in the top line when it reports fourth-quarter fiscal 2021 numbers on Mar 16, before the market opens. The Zacks Consensus Estimate for revenues is pegged at $573.9 million, suggesting an improvement of 6.6% from the prior-year fiscal quarter’s reported figure.

However, the bottom line is expected to decline from the year-ago quarter’s reported number. The Zacks Consensus Estimate for quarterly earnings is currently pegged at 33 cents, indicating a plunge of 45% from the year-ago fiscal period’s tally. The consensus estimate has been stable over the past 30 days.

This clothing, accessories, footwear and home products’ retailer has a trailing four-quarter earnings surprise of 35%, on average.

Key Factors to Note

Lands' End’s fourth-quarter results might benefit from its global e-commerce business and brand strength. We note that improved product assortment and compelling digital marketing strategies have been driving the e-commerce business for a while. Also, enhanced data analytics capabilities and an improved inventory management are positives.

Additionally, LE’s outfitters business is performing well on gains from an impressive school uniform business. Lands' End is also seeing sturdy consumer demand across many of its key categories, including outerwear and swimwear. All these factors are most likely to have driven LE’s sales performance during the quarter under review. On its last earnings call, management had projected fourth-quarter net revenues of $560-$575 million, implying an increase of 4-7% from the prior-year quarter’s reading.

However, we cannot ignore the ongoing supply-chain issues and labor constraints. These include higher shipping costs, continued shipping delays and manufacturing interruptions, primarily in Vietnam. On its last earnings call, management had anticipated shipping costs to accelerate in the fiscal fourth quarter. These along with any deleverage in selling and administrative expenses might have hurt Lands' End’s profitability in the quarter under review.

Lands’ End envisioned earnings per share of 27-36 cents and an adjusted EBITDA of $31-$35 million for the fiscal fourth quarter. This guidance assumes an incremental $15 million supply-chain expenses for the quarter to be reported.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Lands' End this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Lands' End, Inc. Price and EPS Surprise

Lands' End, Inc. Price and EPS Surprise

Lands' End, Inc. price-eps-surprise | Lands' End, Inc. Quote

Although Lands' End carries a Zacks Rank #3, its Earnings ESP of 0.00% makes surprise prediction difficult.

Stocks With Favorable Combination

Here are some stocks worth considering as our model shows that these have the right combination of elements to beat on earnings this season:

PVH Corp. (PVH - Free Report) currently has an Earnings ESP of +0.84% and a Zacks Rank #2. PVH is anticipated to register a top-line increase when it reports fourth-quarter fiscal 2021 results. The Zacks Consensus Estimate for PVH Corp.’s revenues is pegged at $2,387 million, indicating a rise of 14.6% from the figure reported in the prior fiscal-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for PVH Corp.’s quarterly earnings is pegged at $1.98 per share. PVH incurred a loss per share of 38 cents in the year-ago fiscal quarter. PVH delivered an earnings beat of 72.3%, on average, in the trailing four quarters.

Dollar General (DG - Free Report) currently has an Earnings ESP of +0.68% and a Zacks Rank of 3. DG is likely to register a bottom-line decrease when it reports fourth-quarter fiscal 2021 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $2.56 suggests a fall of 2.3% from the year-ago fiscal quarter’s reported figure.

Dollar General’s top line is expected to rise from the year-ago fiscal quarter’s reported number. The Zacks Consensus Estimate for quarterly revenues is pegged at $8,701 million, indicating an improvement of 3.4% from the figure reported in the prior-year fiscal quarter. DG has a trailing four-quarter earnings surprise of 8.8%, on average.

lululemon athletica (LULU - Free Report) currently has an Earnings ESP of +0.06% and a Zacks Rank of 3. LULU is expected to register top and bottom-line growth when it reports fourth-quarter fiscal 2021 numbers. The Zacks Consensus Estimate for LULU’s quarterly revenues is pegged at $2.13 billion, suggesting growth of 23.4% from the prior-year fiscal quarter’s level.

The Zacks Consensus Estimate for lululemon’s quarterly earnings is pegged at $3.27 per share, suggesting a 26.7% increase from the year-ago fiscal period’s reported number. LULU delivered an earnings beat of 21%, on average, in the trailing four quarters.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.