Lands' End, Inc. (NASDAQ:LE) Q4 2023 Earnings Conference Call March 27, 2024 8:30 AM ET
Company Participants
Andrew McLean - CEO
Bernie McCracken - CFO
Conference Call Participants
Josh Herrity - Telsey Advisory Group
Eric Beder - Small Cap Consumer Research
Alex Fuhrman - Craig-Hallum Capital Group
Operator
Good day, and welcome to the Lands’ End Fourth Quarter Earnings Conference Call. [Operator Instructions] Please note, today’s call will be recorded, and I’ll be standing by if you should need any assistance.
It is now my pleasure to turn the conference over to Bernie McCracken, Lands' End’s Chief Financial Officer. Please go ahead.
Bernie McCracken
Good morning and thank you for joining the Lands’ End earnings call for a discussion of our fourth quarter and fiscal 2023 results, which we released this morning, and can be found on our website, landsend.com. I’m Bernie McCracken, Lands’ End’s Chief Financial Officer, and I’m pleased to join you today with Andrew McLean, our Chief Executive Officer. After the prepared remarks, we will conduct a question-and-answer session.
Please also note that the information we are 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 positive 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 landsend.com.
With that, I will turn the call over to Andrew.
Andrew McLean
Thanks, Bernie. Good morning and thank you for joining us today. Our results for the fourth quarter and full year 2023 reflect the continued execution of Lands’ End's value creation strategy. We delivered strong performance in the fourth quarter, including throughout the holiday season, closing out a fiscal year where we generated positive momentum across the organization and drove increased profitability. Our deliberate efforts to generate more profitable sales continued to deliver in Q4 and resulted in a 14% increase in gross profit dollars, adjusted EBITDA of approximately $32 million, which was above the high end of our guidance range, and gross margin expansion of approximately 550 basis points. Q4 marked our fourth consecutive quarter of significant inventory improvement, with inventory down 29% year-over-year in the quarter. We were able to be nimble and disciplined throughout the holiday season, prioritizing newness during what is a highly promotional period for our industry. Looking ahead, we remain focused on further improving our inventory turn from the speed and efficiency initiatives we are implementing across our supply chain. As a solutions-oriented business, we're deepening our focus on building the brand to best align our assortment with customer shopping behaviors. We're bringing our two key customer cohorts, resolvers and evolvers, the items they love and are looking for, while introducing freshness across our assortment more frequently throughout the year via new styles, colors, and fabrics. We're doing so with more full price selling, lower levels of clearance sales, and less promotional activity.