Lands' End, Inc.

Good day and thank you for standing by. Welcome to the Lands End First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Bernie McCracken, Chief Accounting Officer. Please go ahead.

Good morning, and thank you for joining the Lands End earnings call for a discussion of our first quarter results, which we released this morning and can be found on our website, landsend.com. On the call today, you will hear from Jerome Griffith, our Chief Executive Officer, and Jim Gooch, our President and Chief Financial Officer. After the company's prepared remarks, we will conduct a question and answer session. Please also note that the information we're about to discuss includes forward-looking statements. Such statements involve risks and uncertainties. The company's actual results could differ materially from those discussed on this call. Factors that could contribute to such differences include but are not limited to those items noted and included in the company's SEC filings, including our annual report on Form 10-K and quarterly reports on Form 10-Q. The forward-looking information that is provided by the company on this call represents the company's outlook as of today. and we do not undertake any obligation to update forward-looking statements made by us. Subsequent events and developments may cause the company's outlook to change. Of note in this respect, the COVID-19 pandemic continues to have an impact on our business, and its duration could materially alter our outlook. During this call, we'll be referring to non-GAAP measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures can be found in our earnings release issued earlier today, a copy of which is posted in the investor relations section of our website at landsend.com. With that, I will turn the call over to Jerome Griffiths.

Thank you, Bernie. Good morning, and thank you for joining us today for a discussion of our first quarter results. We are extremely pleased with our first quarter results across key financial metrics, with performance far exceeding our expectations. The momentum in our global e-commerce business is stronger than ever as we continue to execute our digitally-led product and marketing strategies. Our continued global e-commerce growth is underpinned by our best-in-class foundation and our continued advancements across our four strategic pillars of product, digital, unit channel distribution, as well as infrastructure and processes. For the first quarter, revenue grew 48%, and global e-commerce increased 44% year over year, while adjusted EBITDA increased $34.1 million to $22.5 million from the first quarter of 2020. While the first quarter 2020 performance was obviously impacted by COVID-19, compared to the first quarter of fiscal 2019, revenue increased 22%. Global e-commerce revenue grew 26%, and adjusted EBITDA increased $19.5 million. Our results demonstrate the strength and momentum in our business that began pre-COVID and is continuing as we emerge from the pandemic. Through our digitally-led and data-driven focus, we increased global new customers by 71% in the first quarter. Our total global customer file expanded the first quarter by 27% from the prior year. Our digitally-led strategy as well as our product and marketing enable us to achieve customer retention of more than 55%. These customers become more productive over time as they shop more with our brand. Importantly, we are efficiently acquiring these customers who, on average, become profitable within the first year. These metrics illustrate the work we have done over the past three years to create a foundation to profitably grow our market share in the global e-commerce apparel business. We attribute our successful new customer acquisition and retention strategy to our enhanced marketing initiatives implemented over the past several years, specifically the significant shift towards digital marketing. In past earnings calls, we have discussed with you the search engine optimization techniques that we use to drive traffic and grow market share. With digital marketing our primary focus, we accelerated our spending within paid social media during the quarter. The results so far have been great. Our paid social marketing was more productive than other digital marketing initiatives in the first quarter and was the primary driver of the strength in our new customer acquisition. Within our paid social initiatives in early stages and our strong data analytics capabilities, we see significant opportunity to continue to efficiently drive new customers to land in. Our U.S. e-commerce sales were strong, increasing an impressive 47% during the first quarter. Beyond the U.S., we are also incredibly pleased with the performance of our e-commerce business in Europe, which was up 55 percent in the first quarter, as we continue to benefit from the initiatives we implemented to drive market share gains. The strong acceptance of the Landon brand in this region furthers our confidence in the strong growth opportunity in front of us as we execute a similar playbook to what drove the strength in the U.S. and advanced our market share position. I'd like to turn now to our product. We continued to emphasize our let's get comfy messaging this quarter as casual comfort remained a priority for our customers and led our global e-commerce business. Our strongest performing categories were focused on comfort and versatility, including swimwear, sleepwear, and knits. Swimwear was a standout this quarter as customers began to make travel plans again. Within the category, swimwear performed across the entire family with positive customer response to the versatility in our product assortment. Sleepwear and home continue to outperform, and we are expanding the offering to year-round in order to capitalize on this broader opportunity. Our knit business remains a top-performing category as we continue to update our colors and styles to meet our customers' lifestyle needs. As an example, we combine cold-weather fabrics with warm-weather colors as we build upon our seasonal transitional offering. Our product is well-positioned to benefit from what we believe is a permanent shift to a more casual comfort aesthetic. We expect the changes that we began to see at the start of the pandemic are here to stay, as many customers will continue to work from home or move to a new hybrid of in-office and at-home work, even as the economy fully reopens. And we see comfort playing a bigger role in where to work. As such, our khakis and woven businesses are attractively positioned to capitalize on the continued strength in the casual wardrobe, particularly as customers refresh their wardrobes in preparation for the office. Turning now to our third-party partnerships, we are pleased with our performance both at Kohl's and Amazon this quarter, which both exceeded expectations. These relationships have enabled us to expand our reach to consumers with similar attributes to the land and customer. As we look to future partnerships, we will continue to be targeted and thoughtful in our distribution. With a strong foundation and flexible operating model, we have been able to navigate this unprecedented period and position ourselves even stronger on the other side of this pandemic. Our performance over the last three years gives us confidence that we are well-positioned to drive long-term profitable growth as we continue to advance on proven strategies to capitalize on the shift in consumer behavior, which I will speak to following Jim's discussion of our financial performance. With that, I will turn it over to Jim.