Lands' End, Inc.

Good day, and welcome to the Lands' End 2Q22 earnings 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. As a reminder, this call is being recorded. I would like to turn the call over to Bernie McCracken, CAO. You may begin.

Good morning, and thank you for joining the Lands' End earnings call for a discussion of our second quarter fiscal 2022 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 Deutsch, 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. 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 LandZen.com. With that, I will turn the call over to Jerome Griffith.

Thank you, Bernie. Good morning, and thank you for joining us today for a discussion of our second quarter results. We're pleased to have exceeded our revenue and adjusted EBITDA expectations in the second quarter, given the increasingly challenging environment, including multi-decade high inflation, shifting customer spending, behaviors, and ongoing supply chain cost pressures. Our better than expected performance further demonstrates the agility and strength of our digitally driven business model. While the supply chain remains challenged with elevated costs and extended lead times, we're seeing a degree of stabilization. We continue to manage these challenges while simultaneously executing on our growth strategies. Turning to the quarter, revenue was down 9% versus 2021 and was up 18% compared to 2019. While macro pressure and consumer sentiment are impacting our global direct-to-consumer e-commerce business, based on our proven business model and highly loyal customer base, we remain confident in our long-term growth potential. Additionally, we were pleased that our U.S. e-commerce business supported a 2% increase in AUR compared to last year and 16% compared to 2019, driven by lack of customer resistance to price increases taken to offset higher product costs. Our outfitters business continues to show strength, led by national accounts, where we are benefiting from the return to travel, as well as our school uniform business, where we're seeing earlier buying in the back to school season. Further, our third party channel continues to produce strong growth. Next, I'll highlight our progress across our strategic growth pillars, including product, digital, unit channel distribution, and infrastructure. Beginning with product, we continue to capitalize on the return to office and social events. Our versatile assortment with made-to-move fabrics continues to resonate with our customers' preference for comfortable yet polished looks which can be dressed up or down. In men's, our linen and no-iron dress shirts, no-iron men's chinos, and Supima cotton polos have all performed well. Similarly, in women's, no-iron woven shirts, outerwear, and performance tops have been well-received. We're also pleased with the strong initial response for our women's versatile wear-to-work and fall outerwear assortment, which we highlighted in our latest catalog. Swimwear continues to be a leading category for us, driven this quarter by the pickup and vacation travel over the summer months. As we move forward, we will continue to emphasize more polished looks and comfortable fabrications that provide the versatility to suit our customers' lifestyle. We're also looking forward to our highly anticipated collaboration with Blake Shelton, launching next week. This new collection will feature a broad assortment across men's, women's, and kids' clothing. Blake's fit with our brand and overlapping audience demographics will further expand our reach, introducing new customers to Land's End. Additionally, this collaboration is part of a broader marketing investment representing the first top of funnel initiative for our brand in several years, allowing us to showcase our product with a more aspirational and out in the world message. On our broader marketing efforts, we continue to focus our marketing investments on driving customer engagement. The flexibility of our ROI-focused marketing approach enables us to maximize marketing productivity in a challenging environment. We will also continue to leverage our data-driven promotional strategies to optimize margin and remain competitive. Turning to our unit channel distribution strategy, we continue to see healthy growth in several new areas. At Kohl's, Swimwear remains the top-selling category fueled by a strong summer travel season. As we approach the partnership's two-year anniversary, we continue to be incredibly pleased with the success we have seen with Kohl's both online and in stores. We're excited for the long-term opportunity and are on track to reach 500 doors by this fall. Our business on Amazon continues to grow and drive new customers to the brand. Additionally, we are excited for the opportunity to sell lands in through Target's e-commerce marketplace. where we launched this quarter. Using our marketplace strategy, we continue to meet our customers and potential new customers where they shop. We plan to continue to develop and grow these existing partnerships and explore additional opportunities to expand our reach. Turning to our outfitters business, in our school uniforms business, we saw strong demand for the back to school season. During the quarter, we witnessed parents purchasing uniforms earlier than usual, most likely to avoid the supply chain related delays they experienced last year. As a result, we experienced a shift in school uniform demand from the third quarter into the second quarter. As supply chain delays normalized, we believe that our customers will return to historical buying patterns. Our national accounts continue to deliver strong performance with the return to travel. Additionally, the personalization investments we continue to make have put us in a solid position to service our small and midsize accounts when they recover to historical levels of activity. With regard to infrastructure, we continue to make investments to enhance our operational efficiency and improve the customer experience. We remain in the process of our multi-year warehouse management system implementation, which will also encompass transportation management. Overall, despite the macro challenges we continue to face, We were able to deliver results ahead of expectations, demonstrating the strength and agility of our business model, the resilience of our multi-pronged strategy, and our strong customer loyalty. Our teams continue to execute across product, marketing, and our strategic initiatives, while also driving growth in our outfitters and third-party businesses. With that, I'll turn it over to Jim.