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Lands' End (LE) Stock Jumps 6.5%: Will It Continue to Soar?

·3 min read

Lands' End (LE) shares rallied 6.5% in the last trading session to close at $31.97. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 28.2% gain over the past four weeks.

Shares of Lands' End got a boost from robust first-quarter fiscal 2021 results, wherein the top and the bottom line not only improved year on year, but also surpassed the Zacks Consensus Estimate. The company posted earnings of $0.08 per share that beat the Zacks Consensus Estimate of a loss of $0.27. In the year-ago quarter the company reported a loss of 53 cents. Net revenues of $321.3 million beat the Zacks Consensus Estimate of $283.2 million and surged 48.1% year on year. The quarter gained from solid growth in the e-commerce channel and faster-than-expected recovery of the Outfitters business. Additionally, strength across a number of key categories including swimwear, sleepwear, and knits as well as prudent marketing strategies acted as upsides.

Backed by expectation of continued business growth momentum, management raised its fiscal 2021 guidance, and provided an upbeat view for the second-quarter. For fiscal 2021, management now expects net revenues in the bracket of $1.61-$1.65 billion compared with the prior expectation of $1.52-$1.57 billion. Earnings per share is expected between $0.84 and $1.04, compared to earnings in the range of $0.34-$0.58 anticipated earlier. For the second quarter, management expects net revenues in the bracket of $345-$355 million, while earnings are projected in the range of $0.05-$0.12 cents per share.

Price and Consensus

Price Consensus Chart for LE
Price Consensus Chart for LE

This clothing maker is expected to post quarterly loss of $0.14 per share in its upcoming report, which represents a year-over-year change of -207.7%. Revenues are expected to be $329.2 million, up 5.5% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Lands' End, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on LE going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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