LANDS' END REPORTS FIRST QUARTER
LANDS' END REPORTS FIRST QUARTER DODGEVILLE, Wis., May 14 /PRNewswire/ -- Lands' End, Inc.
(NYSE: LE), today reported net sales for its first quarter ended May 1, 1992, totaled $140.5 million, up 11 percent from sales of $126.5 million in the same quarter last year. Net income for the quarter just ended was $4.3 million, compared with $1.5 million the company earned in the prior year. Per share earnings were 23 cents for the last three months, compared with 8 cents per share for the first quarter last year.
Net sales rose primarily because of increased customer demand, as well as a reduced level of lost sales (orders received for products not currently in stock and not on backorder) made possible by higher inventory balances throughout the quarter. Gross profit in the quarter just ended was $56.9 million, or 40.5 percent of net sales, compared with $52.2 million, or 41.3 percent of net sales, in the first quarter of the prior year. The decline in gross profit margin was due primarily to a higher LIFO provision and steeper markdowns of liquidated merchandise. Liquidations of excess inventory were about 11 percent of net sales in the quarter just ended, the same as the prior year. For the first quarter this year, selling, general and administrative expenses increased 1 percent to $49.8 million, compared with $49.4 million for the similar quarter last year. SG&A expenses in the prior year were unusually high because of relatively higher planned catalog expenses and unfavorable customer order fulfillment. As a percentage of net sales, SG&A was 35.4 percent, compared with 39.0 percent in the same period last year. The improvement in the SG&A ratio was due primarily to an overall reduction in the relative costs of producing and mailing the company's catalogs. The SG&A ratio also benefited from lower variable costs associated with relatively lower lost sales and decreased shipping and handling charges associated with relatively fewer backorders. This was partially offset by increases in fixed expenses. Higher inventory balances throughout the quarter just ended resulted in an increase in the company's borrowing on short-term lines of credit, which stood at $30 million as of May 1, 1992, compared with $4 million at the end of the same quarter last year. First quarter ending inventory was $131.5 million, up 43 percent from the $92.0 million a year ago. While the company is currently satisfied with the overall quality of its inventory, higher inventory balances may result in higher liquidations and lower gross profit margin in future periods. PRELIMINARY AND UNAUDITED STATEMENTS OF OPERATIONS -- Lands' End, Inc., & Subsidiary (Amounts in thousands, except per share data) For the quarter ended May 1, May 3, 1992 1991 Net sales $140,481 $126,517 Cost of sales 83,549 74,323 Gross profit 56,932 52,194 Selling, general and administrative expenses 49,760 49,385 Income from operations 7,172 2,809 Other income (expense): Interest expense (321) (121) Interest income - 242 Other 38 (433) Total other income (expense) (283) (312) Income before income taxes 6,889 2,497 Income tax provision 2,618 999 Net income $ 4,271 $ 1,498 Net income per share $ 0.23 $ 0.08 Weighted average shares outstanding 18,449 19,120 PRELIMINARY AND UNAUDITED BALANCE SHEETS -- Lands' End, Inc., & Subsidiary (Dollars in thousands) May 1, May 3, 1992 1991 Assets Current assets: Cash and cash equivalents $ 1,551 $ 953 Receivables 897 381 Inventory 131,506 92,030 Prepaid expenses 5,187 7,912 Total current assets 139,141 101,276 Property, plant and equipment, at cost: Land and buildings 53,488 52,586 Fixtures and equipment 52,339 48,191 Leasehold improvements 1,489 1,511 Construction in progress 139 7 Total property, plant and equipment 107,455 102,295 Less - accumulated depreciation and amortization 33,742 26,575 Property, plant and equipment, net 73,713 75,720 Total assets $212,854 $176,996 Liabilities and shareholders' investment Current liabilities: Line of credit $ 30,000 $ 4,000 Current maturities of long-term debt 1,682 1,682 Accounts payable 29,933 33,288 Advance payment on orders 465 351 Accrued liabilities 14,960 12,438 Accrued profit sharing 290 63 Income taxes payable 4,109 930 Total current liabilities 81,439 52,752 Long-term debt, less current maturities 1,667 3,349 Deferred income taxes 2,953 4,451 Shareholders' investment: Common stock, 20,110,294 shares issued 201 201 Donated capital 8,400 8,400 Paid-in capital 23,782 23,782 Deferred compensation (859) (981) Retained earnings 127,691 99,881 Treasury stock, 1,759,640 and 1,003,640 shares at cost, respectively (32,420) (14,839) Total shareholders' investment 126,795 116,444 Total liabilities and shareholders' investment $212,854 $176,996 -0- 5/14/92 /CONTACT: Chip Orum of Land's End, 608-935-4835/ (LE) CO: Land's End ST: Wisconsin IN: REA SU: ERN
AW -- NY056 -- 0187 05/14/92 11:39 EDT
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|Date:||May 14, 1992|
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