UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report(Date of earliest event reported) January 17, 2002
LANDS' END, INC.
(exact name of registrant as specified in its charter)
DELAWARE 1-9769 36-2512786
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification
of incorporation) Number)
Lands' End Lane, Dodgeville, Wisconsin 53595
(Address of principal executive offices) (Zip Code)
Registrant's telephone number 608-935-9341
including area code
INFORMATION INCLUDED IN THIS REPORT
Item 5. Other Events.
Attached as Exhibit 99 to this report is a news release issued
on January 17, 2002, by Lands' End, Inc., announcing its holiday results
for the period ended December 28, 2001.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned, its duly authorized officer and chief financial officer.
LANDS' END, INC.
January 17, 2002 By: /S/ DONALD R. HUGHES
Donald R. Hughes
Senior Vice President &
Chief Financial Officer
EXHIBIT 99
FOR IMMEDIATE RELEASE
LANDS' END REPORTS RECORD HOLIDAY RESULTS
DODGEVILLE, WIS. ... January 17, 2002 ... Lands' End, Inc. (LE), the
direct merchant of classically styled apparel and home furnishings,
today reported results for the nine-week holiday period ended December
28, 2001, compared with the eight-week holiday period ended December 22,
2000.
Total revenue for the nine-week period was $462.6 million, up 8
percent from $427.1 million during the prior year's eight week holiday
season. Net income for the nine-week period was $43.6 million, up 29
percent from $33.9 million earned in the eight-week holiday period in
calendar 2000. Diluted earnings per share for the fiscal 2002 holiday
period were $1.45, compared with $1.13 last year.
The additional week in this holiday period represented $13 million
in revenue and had no material impact on net income. On a comparable 8-
week calendar, total revenue was up about 5 percent.
Commenting on the holiday results, company president and chief
executive officer David F. Dyer said, "Our record holiday season has
extended the momentum of a sensational year. Our collective
merchandising, creative and operational teams harnessed the great
potential inherent in our brand. We provided our customers with great
service, quality products and creative presentations. And our
customers, in turn, rewarded us with a highly successful holiday
season."
The solid sales improvement was fueled by successful inventory
management. While the inventory investment was up from last year, the
company shipped 88 percent of its merchandise immediately upon customer
order, compared to 80 percent in last year's holiday period.
Sales of full-price merchandise to U.S. consumers rose 8.5 percent,
while Internet sales increased 35 percent in the holiday period. As a
percentage of total revenue, gross margin improvement of 2 percentage
points was the result of significantly better vendor sourcing and a
somewhat lower level of liquidations. Overall selling, general and
administrative expenses were 6.3 percent higher. However, as a
percentage of total revenue, SG&A expenses declined 0.6 percentage
points.
FORTY-EIGHT WEEK RECORD RESULTS
Year to date, total revenue for the forty-eight weeks was $1.44
billion, an increase of 6.3 percent from $1.35 billion during the
similar forty-seven week period in the prior year. Net income, year to
date, was $64.7 million, or $2.16 per diluted share, compared with $36.8
million, or $1.20 per share, earned in the forty-seven weeks of the
prior year.
HOLIDAY COMMENTS
The core business segment sales showed strong growth, with an 18
percent increase in women's and an 8 percent increase in the coed
division. In the specialty segment, the home division was up 15
percent, Kids was up 5 percent, and Corporate Sales, the business
outfitters division, was about flat. International sales were very
strong, up 18 percent from the prior year, led by the German and United
Kingdom businesses.
Gross profit in the nine-week period just ended was $216.3 million,
or 46.8 percent of total revenue, compared with $191.4 million, or 44.8
percent of total revenue in the similar eight-week period a year ago.
The increase in gross profit margin was primarily due to continued
sourcing improvements with a somewhat lower level of liquidations.
Liquidations of excess inventory were 4 percent of total merchandise
sales in the holiday period just ended, compared with 5 percent a year
ago.
At the end of the holiday period, inventory was $216 million, up
from $168 million a year ago. This increase was the result of
accelerating spring/summer receipts and investing in key continuing
styles to insure continued high initial fulfillment. The company is
pleased with the quality of its inventory and has a lower level of
inventory to be liquidated on hand, compared with last year.
In the nine-week period just ended, selling, general and
administrative expenses were $144.3 million, or 31.2 percent of total
revenue, compared with $135.7 million, or 31.8 percent of total revenue,
in last year's eight-week holiday period. The improved leverage was
primarily due to better fulfillment levels that allowed us to convert
demand to sales at a higher rate.
SEGMENT DATA
Segment merchandise sales data for holiday period
(in millions) Holiday Holiday Percent
FY02 FY01 Change
Core business segment $276 $255 + 8 %
Specialty segment 111 105 + 6 %
International segment 40 34 + 18 %
Total merchandise sales $427 $394 + 8 %
Internet $ 92 $ 68 + 35%
Segment merchandise sales data (full-price and
liquidation sales) excludes shipping and handling
revenue. Internet merchandise sales are included
in the respective business segments.
BUSINESS OUTLOOK
For the current fiscal year, the company estimates capital
expenditures at $42 million, and for fiscal 2003, they are currently
planned to be approximately $35 million.
Given the first 11 months of this fiscal year and current
expectations for the month of January, the company believes that diluted
earnings per share will be in the range of $2.11 to $2.18 for fiscal
2002.
Looking forward to our performance in fiscal 2003, the company
currently anticipates a single-digit percentage increase in total
revenue and a diluted earnings per share increase in the high-single-
digit to low-double-digit percentage range. While we are extremely
pleased with our progress this year, overall economic conditions are
creating a degree of caution in our outlook for the upcoming first and
second quarters.
Lands' End is a direct merchant of traditionally styled, classic
products offered to customers around the world through regular mailings
of its monthly and specialty catalogs and via the Internet at
www.landsend.com.
STATEMENT REGARDING FORWARD-LOOKING INFORMATION
Statements in this release that are not historical, including,
without limitation, statements regarding our plans, expectations,
assumptions, and estimations for fiscal 2002 and fiscal 2003 revenues,
gross profit margin, and earnings, as well as anticipated sales trends
and future development of our business strategy, are considered forward-
looking and speak only as of today's date. As such, these statements are
subject to a number of risks and uncertainties. Future results may be
materially different from those expressed or implied by these statements
due to a number of factors. Currently, we believe that the principal
factors that create uncertainty about our future results are the
following: customer response to our merchandise offerings, circulation
changes and other initiatives; the mix of our sales between full price
and liquidation merchandise; overall consumer confidence and general
economic conditions, both domestic and foreign; effects of weather on
customer purchasing behavior; effects of shifting patterns of e-commerce
versus catalog purchases; costs associated with printing and mailing
catalogs and fulfilling orders; dependence on consumer seasonal buying
patterns; fluctuations in foreign currency exchange rates; and changes
that may have different effects on the various sectors in which we
operate (e.g., rather than individual consumers, the Corporate Sales
Division, included in the specialty segment, sells to numerous
corporations, and certain of these sales are for their corporate
promotional activities). Our future results could, of course, be
affected by other factors as well. More information about these risks
and uncertainties may be found in the company's 10-K filings with the
S.E.C.
The company does not undertake to publicly update or revise its
forward-looking statements even if experience or future changes make it
clear that any projected results expressed or implied therein will not
be realized.
WEBCAST ANNOUNCEMENT
The company will audio web cast its conference call for the general
public at 9:30 a.m. CT today. This call will cover the company's
performance for the holiday period and its business outlook for the
remainder of the year. Register and listen at
http://www.videonewswire.com/event.asp?id=2661. A playback will be
available for one week.
The conference call and web cast consist of copyrighted material
that may not be recorded, reproduced, retransmitted, rebroadcast, stored
or forwarded without Lands' End's express written permission. Your
participation represents your consent to these terms and conditions.
The call will be recorded by Lands' End, and your participation on this
call also constitutes your consent to having any comments or statements
you make appear on a transcript or broadcast of this call.
-0-
Contact Charlotte LaComb: 608-935-4835
PRELIMINARY AND UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS
Lands' End, Inc. & Subsidiaries
(Amounts in thousands, except per share data)
9 weeks 8 weeks 48 weeks 47weeks
ended ended ended ended
Dec. 28, Dec. 22, Dec. 28, Dec. 22,
2001 2000 2001 2000
Revenue
Net merchandise sales $426,803 $393,607 $1,325,150 $1,251,588
Shipping and handling
revenue 35,789 33,487 110,498 99,232
Total revenue 462,592 427,094 1,435,648 1,350,820
Cost of sales
Cost of merchandise sales 210,639 202,886 688,188 671,369
Shipping and handling
costs 35,644 32,830 109,434 101,827
Total cost of sales 246,283 235,716 797,622 773,196
Gross profit 216,309 191,378 638,026 577,624
Selling, general and
administrative expenses 144,287 135,722 529,429 513,879
Income from operations 72,022 55,656 108,597 63,745
Other income (expense):
Interest expense (80) (381) (1,221) (1,529)
Interest income 256 248 1,239 1,702
Other (1,528) (1,714) (4,284) (5,579)
Total other expense, net (1,352) (1,847) (4,266) (5,406)
Income before income taxes 70,670 53,809 104,331 58,339
Income tax provision 27,023 19,910 39,646 21,586
Net income $ 43,647 $ 33,899 $ 64,685 $ 36,753
Basic earnings per share $ 1.48 $ 1.14 $ 2.20 $ 1.22
Diluted earnings per share $ 1.45 $ 1.13 $ 2.16 $ 1.20
Basic weighted average
shares outstanding 29,475 29,828 29,438 30,122
Diluted weighted average
shares outstanding 30,077 30,031 29,917 30,503
PRELIMINARY AND UNAUDITED
CONSOLIDATED BALANCE SHEETS
Lands' End, Inc. & Subsidiaries Dec. 28, Dec. 22,
(Dollars in thousands) 2001 2000
Assets
Current assets:
Cash and cash equivalents $176,707 $119,148
Receivables, net 22,421 28,192
Inventory 215,544 167,850
Prepaid advertising 11,676 14,470
Other prepaid expenses 8,397 7,484
Deferred income tax benefit 11,628 9,820
Total current assets 446,373 346,964
Property, plant and equipment, at cost:
Land and buildings 117,241 103,607
Fixtures and equipment 104,838 103,460
Computer hardware and software 119,577 97,811
Leasehold improvements 4,823 4,453
Construction in progress - 2,262
Total property, plant and equipment 346,479 311,593
Less - accumulated depreciation
and amortization 151,917 130,249
Property, plant and equipment, net 194,562 181,344
Other assets 2,801 2,648
Total assets $643,736 $530,956
Liabilities and shareholders' investment
Current liabilities:
Lines of credit $ 15,216 $ 7,898
Accounts payable 109,214 108,285
Reserve for returns 17,214 17,449
Accrued liabilities 59,296 52,220
Accrued profit sharing 4,742 2,358
Income taxes payable 32,070 20,725
Total current liabilities 237,752 208,935
Deferred income taxes 12,194 8,740
Shareholders' investment:
Common stock, 40,221 shares issued 402 402
Donated capital 8,400 8,400
Additional paid-in capital 38,689 31,541
Deferred compensation (60) (126)
Accumulated other comprehensive income 3,235 4,813
Retained earnings 553,772 491,183
Treasury stock, 10,352 and 11,031
shares at cost, respectively (210,648) (222,932)
Total shareholders' investment 393,790 313,281
Total liabilities and
shareholders' investment $643,736 $530,956