Lands' End, Inc. (NASDAQ: LE)

Sector: Consumer Cyclical Industry: Apparel Retail CIK: 0000799288
Market Cap 449.51 Mn
P/B 1.95
P/E 38.24
P/S 0.34
ROIC (Qtr) 7.21
Div Yield % 0.00
Rev 1y % (Qtr) -0.36
Total Debt (Qtr) 324.78 Mn
Debt/Equity (Qtr) 1.41

About

Lands' End, Inc. (LE), a prominent player in the apparel industry, is a leading digital retailer that offers a range of solution-based products including apparel, swimwear, outerwear, accessories, footwear, home products, and uniforms. The company operates in a highly competitive landscape, contending with a diverse group of direct-to-consumer companies and retailers. LE's main business activities revolve around designing, sourcing, and selling apparel and other products through multiple channels. The company operates in various countries, including...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 37.05M provide 2.11x coverage of short-term debt 17.53M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 50.17M provides strong 11.05x coverage of stock compensation 4.54M, indicating sustainable incentive practices.
  • Tangible assets of 595.66M provide robust 5.94x coverage of other current liabilities 100.23M, indicating strong asset backing.
  • Robust tangible asset base of 595.66M provides 3x coverage of working capital 198.49M, indicating strong operational backing.
  • Tangible assets of 595.66M provide robust 2.27x coverage of current liabilities 262.32M, showing strong asset backing.

Bear case

  • Operating cash flow of 50.17M barely covers its investment activities of (36.81M), with a coverage ratio of -1.36, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 37.05M against inventory of 347.63M, the 0.11 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Free cash flow of 13.36M provides weak coverage of capital expenditures of 36.81M, with a 0.36 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 55.55M show weak coverage of depreciation charges of 31.29M, with a 1.78 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 31.29M relative to operating cash flow of 50.17M, which is 0.62x suggests significant maintenance capital requirements affecting free cash flow.

Peer comparison

Companies in the Apparel Retail
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TJX Tjx Companies Inc /De/ 175.80 Bn 34.34 2.98 13.19 Bn
2 ROST Ross Stores, Inc. 58.85 Bn 28.21 2.67 5.19 Bn
3 LULU lululemon athletica inc. 25.43 Bn 14.61 2.30 1.76 Bn
4 BURL Burlington Stores, Inc. 18.26 Bn 32.57 1.63 5.94 Bn
5 GAP Gap Inc 10.00 Bn 11.75 0.65 5.52 Bn
6 URBN Urban Outfitters Inc 7.11 Bn 14.53 1.18 1.18 Bn
7 ANF Abercrombie & Fitch Co /De/ 6.17 Bn 11.82 1.19 1.13 Bn
8 BOOT Boot Barn Holdings, Inc. 5.78 Bn 27.75 2.79 0.67 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.84 1.35
EV to Cash from Ops. EV/CFO 14.27 8.18
EV to Debt EV to Debt 2.20 4.33
EV to EBIT EV/EBIT 12.89 -60.97
EV to EBITDA EV/EBITDA 8.27 6.53
EV to Free Cash Flow [EV/FCF] EV/FCF 53.60 22.99
EV to Market Cap EV to Market Cap 1.59 2.06
EV to Revenue EV/Rev 0.54 1.11
Price to Book Value [P/B] P/B 1.95 3.23
Price to Earnings [P/E] P/E 38.24 195.16
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.88
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 12.58
Dividend per Basic Share Div per Share (Qtr) 0.00 0.36
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 16.33
Interest Coverage Int. cover (Qtr) 1.49 13.58
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -29.19 -5.40
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 14.65 89.63
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.25
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 211.18 13.95
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 49.45 -16.93
EBIT Growth (1y) % EBIT 1y % (Qtr) 260.67 10.85
EBT Growth (1y) % EBT 1y % (Qtr) 165.16 6.10
EPS Growth (1y) % EPS 1y % (Qtr) 154.41 10.94
FCF Growth (1y) % FCF 1y % (Qtr) -74.88 -129.32
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -0.84 -1.75
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.54 1.40
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.06
Cash Ratio Cash Ratio (Qtr) 0.14 0.38
Current Ratio Curr Ratio (Qtr) 1.76 1.59
Debt to Equity Ratio Debt/Equity (Qtr) 1.41 1.31
Interest Cover Ratio Int Coverage (Qtr) 1.49 13.58
Times Interest Earned Times Interest Earned (Qtr) 1.49 13.58
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 6.60 2.72
EBIT Margin % EBIT Margin % (Qtr) 4.23 -1.70
EBT Margin % EBT Margin % (Qtr) 1.39 -2.76
Gross Margin % Gross Margin % (Qtr) 48.80 40.52
Net Profit Margin % Net Margin % (Qtr) 0.90 -4.02