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Dodgeville, Wisconsin-based Lands End (NASDAQ:LE) was spun off from Hoffman Estates-based Sears Holdings (NASDAQ:SHLD) in April. Since then, the stock price of Lands End has slowly moved downward. But in its first quarterly report since the spin-off, Lands End delivered remarkably strong top-notch results. But can Lands End keep up the strong growth? And what do Sears' draw-down operations mean for shareholders?

The strong performance of Lands End
Even though Lands End had a slow start in the public market, its first-quarter results indicate that the company is effectively increasing shareholder value. Earnings increased 48% to $10.9 million, or $0.34 per share, compared with $7.3 million, or $0.23 per share, one year ago. Sales also rose to $330.5 million from $319 million in the same three-month period one year ago.

Despite the aftermath of huge winter storms and a rough market for retailers, Lands End posted better results because it effectively targeted consumers in its marketing campaigns, kept costs under control, and offered more special promotions for customers. 

Lands End has a very strong presence on the Internet. In fact, the company said its Internet and catalog sales accounted for a whopping 84% of its total sales. The rest came from traditional retail operations. Lands End has 251 shops inside Sears locations and only 14 stand-alone stores.

Moving forward, Lands End is a classy brand that many consumers enjoy purchasing, which bodes well for the company's future. As the months progress, however, the company needs to break away from its over-dependence on Sears and branch out by building more stores to attract more business.

What about Sears?
Sears itself is a fascinating stock. The CEO of Sears, Eddie Lampert, seems to be taking the company on a quixotic strategy by extracting Sears' intangible assets and spinning off profitable parts of the company.

Late last year, I wrote a more in-depth explanation of Lampert's interesting financial engineering experiment entitled "There's More Than Meets the Eye With Sears." At that time, it appeared that Sears' stock had started to leave the company's poor image as a reviled retailer behind as hedge fund managers bet that the stock could bring returns. It seems that Sears has not yet moved past its retail woes.

SHLD Chart

SHLD data by YCharts

Even though the stock has languished since the date of my article's publication, I still believe Sears' stock may indeed turn into a grand financial experiment. Whether the results of that experiment will bear fruit for investors willing to bite is anyone's guess.

Despite the potential for massive gains with Sears, there is still an equally large chance that the stock will continue to decrease in price due to Sears' poor image as a retailer. Thus Lands End appears to be a much stronger and more stable investment for the long term.

Evan Buck has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.