Shares of Lands' End (NASDAQ:LE) rose on Tuesday after the apparel retailer reported its third-quarter results. While revenue came in below analyst expectations, a higher-than-expected profit helped push the stock up 10.5% by 10:55 a.m. EST.
Lands' End reported third-quarter revenue of $340.0 million, down 0.5% year over year and $9.75 million below the average analyst estimate. The decline was due to the closing of 89 Lands' End Shops at Sears, which reduced revenue by $17 million. Excluding Sears, Lands' End revenue would have increased by 4.7%.
Same-store sales for U.S. company-operated stores jumped 8.3%, while U.S. e-commerce sales rose 7.4%. The company logged a high-single-digit percentage increase in new customer acquisitions for its e-commerce business.
Earnings per share came in at $0.11, up from $0.10 in the prior-year period and $0.03 higher than analysts were expecting. Gross margin jumped by 1.1 percentage points to 45.3%, with the company crediting a disciplined promotional strategy.
"While sales were burdened by unseasonably warm temperatures, our transitional product resonated with customers and sales trends improved as the colder weather arrived," said Lands' End CEO Jerome Griffith.
For the fourth quarter, Lands' End expects to produce revenue between $545 million and $555 million, along with EPS between $0.74 and $0.83.