Lands' End, Inc. (NASDAQ:LE) Q2 2020 Earnings Conference Call - Final Transcript

Sep 02, 2020 • 08:30 am ET


Lands' End, Inc. (NASDAQ:LE) Q2 2020 Earnings Conference Call - Final Transcript


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Jerome Griffith

confidence is due to several factors. First, our organization is a digitally driven business with over 96% of total revenue from eCommerce. Second, we offer key item basics as a great value with great service. Third, we have demonstrated the agility and discipline necessary to align our cost structure to the new normal. And lastly, we have a number of strategies in place to further expand our customer base, including the plan launch of Land's End on and in 150 Kohl's retail stores in late September, as well as brand collaborations, and the introduction of our third-party marketplace. I will speak to these initiatives in just a bit.

Looking back, our second quarter total revenue grew 4.6% and our global eCommerce business increased approximately 23% ahead of our expectation of high-single digit business unit growth. We more than tripled adjusted EBITDA to approximately $24 million through margin expansion, attributable to more discipline promotions and reduced expenses. Importantly, we also took steps to enhance our liquidity position. Jim will provide details on our financial results shortly.

Diving a little deeper into our global consumer eCommerce business, our strategy remains to emphasize comfort and value across our eCommerce sites, in our catalogs, and throughout our communication strategies. Marketing programs focused on our let's get comfy campaigns resonated with both existing and new customers. We use data analytics and search engine optimization program to capture new customers globally with high intent to purchase, resulting in 34% growth and new customer acquisition. At the same time, we leveraged data on existing customers to deliver more personalized messaging. The number of repeat purchases improved in the second quarter, as we continue to tailor our messaging to customer preferences, our re-buy rates reached nearly 60% for existing customers and nearly 30% for new. These are the highest in our company's history and we believe are among the best-in-class.

Our product offering provides the comfort and value proposition that perfectly matches the work from home lifestyle. Our swimwear was the top performing category in the quarter. We saw a strong response to the versatility in our assortment with board shorts and UV-protected swim tees, both particularly strong performers. Emphasis on a one closet strategy, enabling customers to mix and match key items also resonated. In addition to swim, sleepwear, especially men's and knits, both performed very well. Home also continues to be an area of strength as we extend our comfort messaging into the living space.

Turning to our Outfitters business, results were severely impacted by COVID-19, partially offset in growth in our direct-to-consumer eCommerce business. As we discussed last quarter, many of our national accounts operate in highly challenged travel-related industries, while our small-and mid-sized businesses were also negatively impacted by the pandemic. Our school uniform business declined double digits in the second quarter, while we expect continued pressure in Q3, due to delayed school openings. We are seeing trends improved sequentially. Jim will provide more details on this business in his remarks. While we