LE - Lands' End Has An Unattractive Base Scenario As Sales Trail

2024-06-24 08:51:35 ET

Summary

• Lands' End has had a weak long-term history in attracting growing demand, and margins have followed revenues into a weak level leveraged by high debt.
• The company targets growth through third-party retailers' sales, which the company has achieved. Yet, the potential doesn't seem large enough to make total growth attractive.
• The company reported quite good Q1 results as third-party sales grew and the gross margin continued to rise after weak inventory management in prior years.
• The risen valuation now represents an unattractive valuation with my base scenario financial estimates.

Lands’ End, Inc. ( LE ) is a predominantly ecommerce-based retailer, selling swimwear, outerwear, footwear, and other apparel products and operates multiple brands under which the company sells its products. The company also offers B2B sales across multiple categories, offering businesses custom-branded apparel....

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