Lands' End, Inc. (NASDAQ:LE) Q3 2018 Earnings Conference Call Transcript
Dec 06, 2018 • 08:30 am ET
Good day, ladies and gentlemen, and welcome to Lands' End Third Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) As a reminder, this conference call may be recorded.
I would now like to turn the conference over to Bernie McCracken. You may begin.
Good morning, and thank you for joining the Lands' End earnings call for our third quarter fiscal 2018 results, which we released this morning and can be found on our website, landsend.com. On the call today, you will hear from Jerome Griffith, our CEO and President; and Jim Gooch, our COO and CFO. After the company's prepared remarks, we will conduct a question-and-answer session with our covering analysts.
(Forward-Looking Cautionary Statements)
During this call, we'll be referring to non-GAAP measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures can be found in our earnings release issued earlier today, a copy of which is posted in the Investor Relations section of our website at landsend.com.
With that, I will turn the call over to Jerome Griffith.
Thank you, Bernie, and thank you, everyone, for joining us today. Overall, we are very pleased with our third quarter results, which marked the sixth consecutive quarter of sales growth and the fifth consecutive quarter of adjusted EBITDA increases. Briefly touching on our results. For the third quarter, revenue grew approximately 5% over the last year to $341.6 million, and adjusted EBITDA increased approximately 22% to $15.7 million. We saw accelerated growth in our Direct segment, which grew approximately 8%, as compared to last year. We were particularly excited to see that the growth was led by the strength in our US e-commerce business, which grew in double digits.
Within our Retail segment, comparable sales grew by nearly 12%, led by our US company operated stores, which recorded same-store sales of plus 15% to last year. Gross margin expanded approximately 60 basis points in third quarter, and we're very well positioned with both the level and content of our inventory as we head into the holiday season. We're extremely pleased to see the momentum across our business continues through the Thanksgiving and Cyber Monday period.
At the beginning of the year, I said that in 2018, we would focus on building momentum through four major growth initiatives. Number one, product, to focus on key high-quality items that offer great value to our customers. Number two, digital, to transform into a quicker and more nimble digitally-led organization. Number three, distribution, to engage our customer wherever, whenever they (Technical Difficulty) to shop. And finally Number four, business process, to build strategic competencies through improved business processes that are based on standardization and efficiency. We've been working diligently on advancing these initiatives, and I'm extremely pleased with the traction we're gaining across all areas.