The US clothing retailer Lands’ End Inc. closed the third quarter of the 2023/24 financial year with a double-digit decline in sales. The loss was significantly higher than in the same period last year, not least due to extensive value adjustments. This emerges from an interim report that the company published on Tuesday.
In the 13 weeks before October 27th, sales amounted to 324.7 million US dollars (300.1 million euros), missing the level of the previous year’s quarter by 12.5 percent. According to the company, the unexpectedly significant decline was partly due to the discontinuation of e-commerce activities in Japan at the end of the last financial year and the restriction of discount promotions in the USA.
High value adjustments result in deep red numbers
Not least due to lower discounts and lower costs along the supply chain, the clothing supplier was able to increase its gross margin from 40.0 to 47.0 percent. Earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted for special effects, rose by 3.7 percent to $17.3 million despite the decline in sales.
The bottom line, however, was a significantly higher loss than in the same period last year. The reported net loss grew from 4.7 to 112.4 million US dollars (103.9 million euros). However, this was mainly due to a goodwill impairment of $106.7 million. Adjusted for special items, the net loss rose from $1.7 to $3.6 million.
In view of the current developments, the company lowered its annual forecasts. For 2023/24, management now only expects sales in the range of 1.45 to 1.48 billion US dollars. It also expects a net loss of between $115.0 million and $118.0 million. Adjusted for special items, the deficit is expected to be in the range of $2.0 million to $5.0 million.