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Why this former Sears-owned apparel retailer has seen its stock explode nearly 700%

Brian Sozzi
·Editor-at-Large
·3 min read
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Life after splitting off from now defunct Sears in 2014 has been pretty darn good for 58-year-old apparel brand Lands' End (LE).

More specifically, the last three years under CEO Jerome Griffith — who joined in 2017 after a successful turnaround and eventual sale of luxury travel accessories brand Tumi. Somewhat under the radar, shares of Lands' End have surged nearly 700% this past year as Griffith has reinvested in product quality, slowly opened stores, improved the online shopping experience and expanded into Kohl's and onto Amazon. A health pandemic that has shifted everyone to wearing comfy clothes (a Lands' End specialty) at home has helped, too.

Griffith doesn't seem too surprised by Wall Street's embrace in light of those factors.

"We are having really good numbers of people coming into the brand, but even better we are having good rates where customers who are newer active customers buying every year and regularly. Those active customers end up staying with us for quite a long time — on average 17 years. So we have a very loyal customer base," Griffith told Yahoo Finance Live.

Lands' End
Lands' End CEO Jerome Griffith talks to Yahoo Finance after the company reports Q4 earnings.

Lands' End momentum continued in the fourth quarter, the retailer reported on Wednesday.

Global e-commerce sales rose 7.5% from a year ago. Online sales in Europe and the U.S. gained 38% and 3.7%, respectively. Operating profits fell 6.5%, reflecting the year ago launch of a uniform line with America Airlines that didn't repeat in this year's fourth quarter.

Shares advanced slightly on the results, extending their year-to-date gain to about 64%.

Here's how Lands' End quarter and outlook stacked up versus Wall Street's estimates.

  • 4Q20 Sales: $538.4 million vs. $531 million

  • 4Q EPS: $0.60 vs. $0.56

  • 2021 Sales Guidance: $1.52 billion to $1.57 billion vs. $1.52 billion

  • 2021 EPS Guidance: $0.34 to $0.58 vs. $0.45

On the radar screen now for Griffith and his team are hitting some optimistic 2023 financial goals. That includes reaching annual sales of $1.9 billion to $2.1 billion and a high single digit percentage adjusted operating margin. In 2020, Lands' End has $1.43 billion in sales and an adjusted operating margin of 6.3%.

"One of the things that the previous management had not been doing is loving the customer and designing product for that customer. And what we have done is a deep dive into exactly who was out customer and what they are looking for and what they expect from Lands' End, and have designed products to that end. It has been very well-received by our customer base," Griffith said.

And well-received by shareholders.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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