Lands' End, Inc. (NASDAQ:LE) Q3 2019 Earnings Conference Call - Final Transcript

Dec 03, 2019 • 08:30 am ET

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Lands' End, Inc. (NASDAQ:LE) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Lands' End Third Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]

I would now like to hand the conference to your speaker today, Bernie McCracken, Chief Accounting Officer. Please go ahead, sir.

Executive
Bernie McCracken

Good morning and thank you for joining the Lands' End earnings call for discussion of our third quarter fiscal 2019 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 Chief Executive Officer and President; and Jim Gooch, our Chief Operating Officer and Chief Financial Officer. After the company's prepared remarks, we will conduct a question-and-answer session.

Please also note that the information we're about to discuss includes forward-looking statements. Such statements involve risks and uncertainties. The company's actual results could differ materially from those discussed on this call. Factors that could contribute to such differences include, but are not limited to those items noted and included in the company's SEC filings, including our annual report on Form 10-K and quarterly reports on Form 10-Q. The forward-looking information that is provided by the company on this call represents the company's outlook as of today and we do not undertake any obligation to update forward-looking statements made by us. Subsequent events and developments may cause the company's outlook to change.

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.

Executive
Jerome Griffith

Thank you, Bernie. Good morning. We are very pleased to have delivered both strong earnings growth for the third quarter and a great progress on our strategic initiatives across our businesses. Briefly highlighting our financial results. Revenue increased nearly 5% when adjusted for Sears closures with growth led by our US business. In the US, e-commerce sales grew 7.4%, while our US company operated retail stores once again delivered strong comparable sales growth of 8.3%. Adjusted EBITDA grew nearly 20% to $18.8 million resulting from gross margin expansion of approximately 110 basis points, driven by more disciplined promotional strategies, as well as expense controls.

While we face sales headwinds related to unseasonably warm temperatures earlier in the quarter, we saw an uptick in selling trends, particularly in heavier outerwear as colder weather arrived. The progress we are making across our numerous strategic initiatives continues to put us on track to achieve our long-term financial targets. During the third quarter, we continue to advance our growth strategies, which remain centered on getting the product right, operating as a digitally-led company, executing a uni-channel