Lands' End Inc (LE) 2022 Q4 法說會逐字稿

Good day, and welcome to the Land's End Fourth Quarter and Full Year Fiscal 2022 Results Call. (Operator Instructions) As a reminder, this call may be recorded. I would now like to turn the call over to Bernard McCracken, Interim Chief Financial Officer. You may begin.

美好的一天，歡迎來到 Land's End 第四季度和 2022 財年全年業績電話會議。 （操作員說明）提醒一下，此通話可能會被錄音。我現在想把電話轉給臨時首席財務官 Bernard McCracken。你可以開始了。

Good morning, and thank you for joining the Lands' End earnings call for a discussion of our fourth quarter and full year fiscal 2022 results which we released this morning and can be found on our website, landsend.com. I'm Bernie McCracken, Interim 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'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.

早上好，感謝您加入 Lands' End 財報電話會議，討論我們今天上午發布的第四季度和全年 2022 財年業績，這些業績可以在我們的網站 landsend.com 上找到。我是臨時首席財務官 Bernie McCracken，今天很高興與我們的首席執行官 Andrew McLean 一起與大家一起。在準備好的發言之後，我們將進行問答環節。另請注意，我們將要討論的信息包括前瞻性陳述。此類陳述涉及風險和不確定性。公司的實際結果可能與本次電話會議上討論的結果存在重大差異。可能導致此類差異的因素包括但不限於公司向美國證券交易委員會提交的文件中註明和包含的項目，包括我們的 10-K 表格年度報告和 10-Q 表格季度報告。

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 obligations 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 on the Investor Relations section of our website at landsend.com.

公司在本次電話會議上提供的前瞻性信息代表了公司截至今天的展望，我們不承擔更新我們所做的前瞻性陳述的任何義務。隨後的事件和發展可能會導致公司的前景發生變化。在這次電話會議中，我們將提到非 GAAP 措施。這些非 GAAP 措施不是根據公認的會計原則編制的。在我們的收益發布中可以找到非 GAAP 財務指標與最直接可比的 GAAP 指標的對賬。今天早些時候發布，其副本發佈在我們網站 landsend.com 的投資者關係部分。

With that, I will turn the call over to Andrew.

有了這個，我會把電話轉給安德魯。

Thank you, Bernie. Good morning, and thank you for joining us today. On today's call, we'll discuss Land's End's fourth quarter and full year 2022 results. We'll also discuss our strategy and the work we're doing to ensure Land's End effectively serves all of our stakeholders in the years ahead. I'll begin by saying just how excited I am to have joined Lands' End for the opportunity to lead this iconic American brand. Land's End has a fantastic 60-year history and thanks to the hard work of our talented and dedicated team with a strong platform for continued growth and profitability. We'll speak to our performance in the fourth quarter in a moment. But as this is my first earnings call addressing you as CEO I want to provide my perspective on the business and how we plan to build on all the progress made by Jerome Griffith and the entire Lands' End team over the past several years.

謝謝你，伯尼。早上好，感謝您今天加入我們。在今天的電話會議上，我們將討論 Land's End 的第四季度和 2022 年全年業績。我們還將討論我們的戰略和我們正在做的工作，以確保 Land's End 在未來幾年有效地為我們所有的利益相關者服務。首先，我要說我很高興能加入 Lands' End，因為有機會領導這個標誌性的美國品牌。 Land's End 擁有 60 年的輝煌歷史，這要歸功於我們才華橫溢、敬業的團隊的辛勤工作，以及持續增長和盈利的強大平台。我們稍後會談到我們在第四季度的表現。但由於這是我第一次以首席執行官的身份向您發表財報電話會議，我想提供我對業務的看法，以及我們計劃如何在 Jerome Griffith 和整個 Lands' End 團隊過去幾年取得的所有進展的基礎上再接再厲。

At our core, Lands' End is in the business of providing products that solve life issues. We deliver consumers the high-quality product they're looking for, for themselves and their families. We plan to continue focusing on our successful franchises and product strengths while driving innovation across the enterprise and as always, placing the customer at the center of our decisions. The leadership team and I have spent the last few months refining our strategy, thinking about how we can best leverage our strengths to execute, and I'm pleased to share some more details today. To be clear, the evolution of our strategic value drivers builds on a strong foundation from which to drive enhanced growth and profitability, and we will prioritize execution and innovation to position Lands' End for long-term success.

Lands' End 的核心業務是提供解決生活問題的產品。我們為消費者和他們的家人提供他們正在尋找的高質量產品。我們計劃繼續專注於我們成功的特許經營權和產品優勢，同時推動整個企業的創新，並一如既往地將客戶置於我們決策的中心。領導團隊和我在過去幾個月裡一直在完善我們的戰略，思考我們如何才能最好地利用我們的優勢來執行，我很高興今天能分享更多細節。需要明確的是，我們戰略價值驅動因素的演變建立在推動增長和盈利能力增強的堅實基礎之上，我們將優先考慮執行和創新，以使 Lands' End 取得長期成功。

I mentioned it earlier but it's worth repeating, Lands' End is in the business of providing products that solve life's issues, whether for individuals, families, schools or businesses, we provide the high-quality products they're looking for, when they're looking for them. By simplifying the interaction we have with consumers, we can drive meaningful and sustainable value for all stakeholders. To continue to meet consumers' needs. We need to innovate our product strategy and put greater focus towards the categories that they are looking for most from us.

我之前提到過，但值得重複，Lands' End 的業務是提供解決生活問題的產品，無論是為個人、家庭、學校還是企業，我們都會提供他們正在尋找的高質量產品，當他們“正在尋找他們。通過簡化我們與消費者的互動，我們可以為所有利益相關者帶來有意義和可持續的價值。不斷滿足消費者的需求。我們需要創新我們的產品策略，並更加關注他們最希望從我們這裡獲得的類別。

Moving forward, we plan to sharpen our focus on the categories that drive outsized value creation and bring customers back time and time again, including swim and outerwear, some of our top performers. Within swim, we'll weight our marketing towards the vacation story, extending the reach of the category to include essentials, such as totes, towels, cover-ups, Sun protection and footwear. Within outerwear, we see great potential in layering, which endure throughout the seasons and complement heavy outerwear pieces for colder months. Through this product management strategy, we expect to drive sales and margin growth over the long term. We are confident this product focus will help us better serve the consumer by providing land and branded merchandise to consumers wherever they're looking for it, including on our website and third-party websites, in our catalogs and in our stores. It's worth noting that while we seek to meet customers where they are over 90% of our revenue comes from a click, so we will continue to emphasize digital channels for serving existing and new customers.

展望未來，我們計劃將重點放在推動超額價值創造並一次又一次吸引客戶的類別上，包括我們表現最好的游泳和外套。在游泳方面，我們將把營銷重點放在度假故事上，將類別的範圍擴大到包括手提包、毛巾、罩衫、防曬霜和鞋類等必需品。在外套中，我們看到了層搭的巨大潛力，它在整個季節都經久不衰，並在寒冷的月份與厚重的外套相得益彰。通過這一產品管理戰略，我們預計將長期推動銷售和利潤增長。我們相信，這種對產品的關注將幫助我們更好地為消費者提供服務，無論他們在哪裡尋找商品，包括在我們的網站和第三方網站、我們的目錄和我們的商店中，都可以為他們提供土地和品牌商品。值得注意的是，雖然我們尋求滿足客戶的需求，但我們 90% 以上的收入都來自點擊，因此我們將繼續強調為現有客戶和新客戶提供服務的數字渠道。

At Lands' End, we're customer obsessed. The key to executing this product strategy is making sure we reach our customers in the right cadence with the right products at the right time, helping them to build their baskets across categories. In essence, we're going to take a page from our history and focus on engaging directly with our customers while encouraging them to shop across the preferred channel. Lands' End already has a robust (inaudible) nearly 7 million strong and we are going to double down on our approach to understanding our customers, both current and potential and seek to grow our share of our addressable market by leveraging our proprietary data. Our focus will be on deepening relationships with existing customers while simultaneously bringing in new customers to the brand. This will involve qualitative and quantitative assessments that are just kicking off which will provide us with an even better understanding of our customers, including how they view our brands, what other products and product adjacencies they may be looking for and how we can best engage with them.

在 Lands' End，我們以客戶為中心。執行此產品戰略的關鍵是確保我們以正確的節奏在正確的時間以正確的產品接觸客戶，幫助他們建立跨類別的購物籃。從本質上講，我們將從我們的歷史中吸取教訓，專注於直接與我們的客戶互動，同時鼓勵他們通過首選渠道購物。 Lands' End 已經擁有近 700 萬的強大（聽不清），我們將加倍努力了解我們的客戶，包括當前和潛在的客戶，並尋求通過利用我們的專有數據來增加我們在潛在市場中的份額。我們的重點將是加深與現有客戶的關係，同時為品牌帶來新客戶。這將涉及剛剛開始的定性和定量評估，這將使我們更好地了解我們的客戶，包括他們如何看待我們的品牌、他們可能正在尋找哪些其他產品和產品鄰接關係以及我們如何才能最好地與客戶互動他們。

We'll also use our proprietary data to better understand our own operations, providing our product teams the tools they need to make better design, sourcing and buying decisions. We'll work to better connect our merchants, planners and data teams to facilitate knowledge sharing and ensure we're always delivering what consumers want when they want it. The theme I hope you're hearing is that we are going to be innovative in every aspect of our business with decisions driven by our robust data and consumer demands. From how we engage with and deliver for our consumers to the way we operate on a daily basis, innovation will come to the forefront, and we're confident that this will help drive both top and bottom line growth over the long term. We'll share updates on our progress along the way. But let me just say that I am fully confident in our team's ability to execute. We'll strive to give our people the tools and structure to succeed our customers the products they want and our shareholders the growth and value they expect.

我們還將使用我們的專有數據來更好地了解我們自己的運營，為我們的產品團隊提供他們做出更好的設計、採購和購買決策所需的工具。我們將努力更好地連接我們的商家、規劃人員和數據團隊，以促進知識共享，並確保我們始終在消費者需要時提供他們想要的東西。我希望您聽到的主題是，我們將根據強大的數據和消費者需求做出決策，從而在業務的各個方面進行創新。從我們與消費者的互動方式和為消費者提供服務到我們日常運營的方式，創新將成為重中之重，我們相信這將有助於推動收入和利潤的長期增長。我們將在此過程中分享我們的最新進展。但我只想說，我對我們團隊的執行能力充滿信心。我們將努力為我們的員工提供工具和結構，讓我們的客戶獲得他們想要的產品，讓我們的股東獲得他們期望的增長和價值。

Now turning to our fourth quarter results. We executed well in the face of continued economic headwinds, which are beginning to moderate. As we previewed on our last call, we entered the fourth quarter with a bit of carryover softness in consumer activity which normalized as we work through the quarter. We were pleased to see sequential improvement in each month in the quarter, including sales and margin performance. We are seeing some of those trends carry over into Q1, particularly in our core swim category. In the fourth quarter, our sales came in at the high end of our guidance range with $530 million in revenue, down 5% year-over-year. While we're pleased with the sales number, it's worth noting that like many other retailers, we introduced promotions earlier and ran them longer during the quarter. We previewed these promotions on our last call. And while strong consumer demands without promotions is always preferred, I'm proud of the way the team responded to ensure, we were serving our customers' needs throughout the all-important holiday season.

現在轉向我們的第四季度業績。面對開始緩和的持續經濟逆風，我們表現良好。正如我們在上次電話會議上預測的那樣，我們進入第四季度時消費者活動略有疲軟，隨著我們整個季度的工作，這種情況已經正常化。我們很高興看到本季度每個月的連續改善，包括銷售額和利潤率表現。我們看到其中一些趨勢延續到了第一季度，尤其是在我們的核心游泳類別中。第四季度，我們的銷售額達到了我們指導範圍的高端，收入為 5.3 億美元，同比下降 5%。雖然我們對銷售數字感到滿意，但值得注意的是，與許多其他零售商一樣，我們更早地推出了促銷活動，並且在本季度開展的時間更長。我們在上次電話會議上預覽了這些促銷活動。雖然沒有促銷的強烈消費者需求始終是首選，但我為團隊的回應方式感到自豪，以確保我們在最重要的假期期間滿足客戶的需求。

Regarding inventory, sales throughout the quarter, particularly in some of our high-value categories, have helped us move closer to historical inventory levels. We expect to be back to normalized levels by the end of the first quarter. Consistent with our strategy, we're working to better manage inventory in a way that's consistent with the products our customers are looking for, when they're looking for them. We're confident that through our enhanced use of data and analytics our teams will be better able to predict and manage appropriate inventory levels, reducing that expense without impacting the customer experience. Similarly, global supply chains seem to be improving. So, while the efforts we took to ensure we had product for the 2022 holiday season were important, we expect to be more targeted moving forward. To that end, we expect our cost of goods sold in 2023 will continue to improve as we have more stability and predictability in the global supply chain. Altogether, we expect our actions to better manage inventory paired with more normalized supply chains will lead to enhanced gross margin moving forward.

關於庫存，整個季度的銷售，特別是在我們的一些高價值類別中，幫助我們接近歷史庫存水平。我們預計到第一季度末將恢復到正常水平。與我們的戰略一致，我們正在努力以一種與客戶正在尋找的產品一致的方式更好地管理庫存，當他們正在尋找它們時。我們相信，通過加強對數據和分析的使用，我們的團隊將能夠更好地預測和管理適當的庫存水平，從而在不影響客戶體驗的情況下減少開支。同樣，全球供應鏈似乎也在改善。因此，儘管我們為確保為 2022 年假期提供產品而做出的努力很重要，但我們希望在未來更有針對性。為此，我們預計 2023 年的商品銷售成本將繼續改善，因為我們在全球供應鏈中具有更高的穩定性和可預測性。總而言之，我們預計我們採取的更好地管理庫存以及更規範化的供應鏈的行動將導致未來毛利率的提高。

Looking at the products our customers were shopping for, we saw greater demand for women's swim and outerwear. With less demand for heavy outerwear as a result of the warmer than usual winter in the U.S. and Europe. We continue to see challenges across a few categories, including kids and hubs. So promotions through the quarter helped us to reduce the inventory in these and other areas. Sleep, which was largely overinvested in by retailers industry-wise performed below expectations in the quarter. However, it continues to be a positive category for us where we have carved a niche with sales growing over 60% from 2019 to 2022. As we discussed last quarter, we believe the trends in casualization and demand for hybrid life are here to stay, and we're well positioned in those areas.

查看客戶購買的產品，我們發現對女士泳衣和外套的需求更大。由於美國和歐洲的冬季比往常溫暖，對厚重外套的需求減少。我們繼續看到幾個類別的挑戰，包括兒童和集線器。因此，整個季度的促銷活動幫助我們減少了這些和其他領域的庫存。在很大程度上被零售商過度投資的睡眠在本季度的表現低於預期。然而，它對我們來說仍然是一個積極的類別，我們已經開闢了一個利基市場，從 2019 年到 2022 年銷售額增長了 60% 以上。正如我們上個季度所討論的那樣，我們相信休閒化的趨勢和對混合生活的需求將繼續存在，我們在這些領域處於有利地位。

In line with the product strategy I discussed earlier, we're going to leverage data to refine our assortment and make sure we're making better product decisions based on what consumers are looking for. As it relates to our distribution channels, we saw strong engagement and performance from landsend.com and continue to be pleased with our third-party online partnerships, including Kohl's and Target, Walmart and Amazon. We're in the process of launching with Macy's and expect that will fully launch by the end of Q2. On marketing, we focused our efforts on engaging with our existing customer base, driven by our robust customer file and we will continue to leverage a multi-platform approach for that engagement.

根據我之前討論的產品策略，我們將利用數據來改進我們的產品組合，並確保我們根據消費者的需求做出更好的產品決策。由於它與我們的分銷渠道相關，我們看到了 landsend.com 的強大參與度和表現，並繼續對我們的第三方在線合作夥伴關係感到滿意，包括 Kohl's 和 Target、沃爾瑪和亞馬遜。我們正在與梅西百貨合作推出，預計將在第二季度末全面推出。在營銷方面，在我們強大的客戶檔案的推動下，我們將精力集中在與現有客戶群的互動上，我們將繼續利用多平台方法進行互動。

Whether through e-mail, search or catalog, we're working to convert sales and build further affinity for the brand, for example, our customers gravitate to our apparel collections, where they appreciate the look, set and prices, and we'll continue to factor those types of insights into our marketing. As I mentioned earlier, we'll have a lot more to share on those efforts over the coming months as we take a fresh look at our data and ways to best engage with consumer journeys.

無論是通過電子郵件、搜索還是目錄，我們都在努力轉化銷售並進一步建立對品牌的親和力，例如，我們的客戶被我們的服裝系列所吸引，他們欣賞外觀、套裝和價格，我們將繼續將這些類型的見解納入我們的營銷。正如我之前提到的，隨著我們重新審視我們的數據和最好地參與消費者旅程的方式，我們將在未來幾個月分享更多關於這些努力的信息。

With that, I will turn it over to Bernie who has moved into the interim CFO role without missing a beat.

有了這個，我將把它交給伯尼，他已經毫不猶豫地擔任臨時首席財務官一職。

Thank you, Andrew. For the fourth quarter, as Andrew mentioned, total revenue was at the high end of our guidance range at $530 million, a decrease of 5% compared to last year. Our global e-commerce sales decreased 6% from 2021 with our U.S. e-commerce business decreasing 2% from 2021. We our international business decreasing 31% in the quarter. Our international business continued to be impacted by inflation and geopolitical turmoil in Europe as well as the previously announced closure of the Japan e-commerce business. In our Outfitters business, sales decreased 2%, mostly from timing differences due to last year's supply chain disruption.

謝謝你，安德魯。正如安德魯所提到的，第四季度的總收入處於我們指導範圍的高端，為 5.3 億美元，與去年相比下降了 5%。我們的全球電子商務銷售額比 2021 年下降了 6%，我們的美國電子商務業務比 2021 年下降了 2%。我們的國際業務在本季度下降了 31%。我們的國際業務繼續受到歐洲通貨膨脹和地緣政治動盪以及先前宣布關閉日本電子商務業務的影響。在我們的 Outfitters 業務中，銷售額下降了 2%，主要是由於去年供應鏈中斷導致的時間差異。

In our business uniforms, we were favorable to last year for both the quarter and the full year. Within school uniforms, we're pleased with our overall performance for the year and maintained our overall share in the school segment. Revenue for our third-party business continues to be strong, increasing 8% as compared to the fourth quarter last year. This increase was largely driven by sales growth in the Kohl's marketplace, particularly within fleece and outerwear as well as growth in our other online marketplaces.

在我們的商務制服中，我們在本季度和全年都比去年好。在校服方面，我們對今年的整體表現感到滿意，並保持了我們在校服領域的整體份額。我們第三方業務的收入繼續保持強勁，與去年第四季度相比增長了 8%。這一增長主要是由科爾市場的銷售增長推動的，特別是羊毛和外套以及我們其他在線市場的增長。

Moving to our retail business. During the quarter, we delivered revenue of $15 million, with U.S. same-store sales decreasing approximately 4% from the fourth quarter of 2021. Gross margin in the fourth quarter decreased to 33%, approximately a 340 basis point decline from 2021. The margin pressure was driven by increased industry-wide promotional activity and a focused effort to move through less productive units, slightly offset by lower inbound transportation costs. As a percentage of sales, SG&A was 28%, a decrease of approximately 260 basis points from 2021, driven by continued expense controls across the entire business and lower digital marketing spend. Our performance led to a net loss for the quarter of $3.3 million or $0.10 per share compared to net income of $7.1 million or $0.21 per share in 2021. In addition to these GAAP measures, adjusted EBITDA is an important profitability measure that we use to manage our business internally. For the quarter, we delivered adjusted EBITDA of $24.2 million, which was at the higher end of our expectations.

轉向我們的零售業務。本季度，我們實現收入 1500 萬美元，美國同店銷售額較 2021 年第四季度下降約 4%。第四季度毛利率下降至 33%，較 2021 年下降約 340 個基點。利潤率壓力來自全行業促銷活動的增加，以及通過生產率較低的單位的集中努力，但被較低的入境運輸成本略微抵消。 SG&A 佔銷售額的百分比為 28%，比 2021 年下降了約 260 個基點，這是由於整個業務的持續費用控制和較低的數字營銷支出推動的。我們的業績導致本季度淨虧損 330 萬美元或每股 0.10 美元，而 2021 年的淨收入為 710 萬美元或每股 0.21 美元。除了這些 GAAP 指標外，調整後的 EBITDA 是我們用來管理的重要盈利指標我們內部的業務。本季度，我們實現了 2420 萬美元的調整後 EBITDA，處於我們預期的較高水平。

Looking at the balance sheet. Inventories at the end of the quarter were $426 million compared to $384 million a year ago. The 11% increase in inventory was primarily driven by early receipts of swim product for the spring and summer selling seasons as well as carryover full-price swim product driven by late receipts last year due to the supply chain challenges and excess inventory in our kids category. With reduced lead times, we've taken appropriate actions to execute more efficiently which we expect will enable us to normalize our inventory level by the end of the first quarter. Regarding our debt at the end of the fourth quarter, our term loan balance was $244 million and our $275 million ABL had $100 million of borrowings outstanding. To further drive shareholder value creation, we continue to explore opportunities to refinance our debt and are committed to doing so subject to favorable market conditions.

看著資產負債表。本季度末的庫存為 4.26 億美元，而一年前為 3.84 億美元。庫存增長 11% 的主要原因是春季和夏季銷售季節的游泳產品提前收到，以及去年由於供應鏈挑戰和我們的兒童類別庫存過剩導致延遲收到的結轉全價游泳產品.隨著交貨時間的縮短，我們採取了適當的措施來更有效地執行，我們預計這將使我們能夠在第一季度末使庫存水平正常化。關於我們在第四季度末的債務，我們的定期貸款餘額為 2.44 億美元，我們的 2.75 億美元 ABL 有 1 億美元的未償還借款。為了進一步推動股東價值創造，我們繼續探索為我們的債務再融資的機會，並致力於在有利的市場條件下這樣做。

During the fourth quarter, we repurchased $3.2 million worth of shares under the Board's previously announced $50 million share repurchase authorization, bringing the balance of the remaining authorization to $41.5 million as of the end of the fiscal year.

在第四季度，我們根據董事會先前宣布的 5000 萬美元股票回購授權回購了價值 320 萬美元的股票，使截至本財年末的剩餘授權餘額達到 4150 萬美元。

Turning to our guidance for the first quarter. We expect net revenue to be between $295 million and $310 million. We expect a net loss of $5 million to $3 million and diluted loss per share to be between $0.15 and $0.09. We expect adjusted EBITDA to be in the range of $13 million to $16 million. For the full year, we expect net revenue of $1.56 billion to $1.62 billion. We expect a net loss of $6 million to net income of $1 million and diluted loss per share of $0.18 to earnings per share of $0.03. We expect adjusted EBITDA to be in a range of $72 million to $82 million, our guidance for the full year incorporates approximately $35 million in capital expenditures.

轉向我們對第一季度的指導。我們預計淨收入將在 2.95 億美元至 3.1 億美元之間。我們預計淨虧損為 500 萬至 300 萬美元，每股攤薄虧損在 0.15 美元至 0.09 美元之間。我們預計調整後的 EBITDA 將在 1300 萬至 1600 萬美元之間。對於全年，我們預計淨收入為 15.6 億美元至 16.2 億美元。我們預計淨虧損為 600 萬美元，淨收入為 100 萬美元，每股攤薄虧損為 0.18 美元，每股收益為 0.03 美元。我們預計調整後的 EBITDA 將在 7200 萬美元至 8200 萬美元之間，我們對全年的指導包括大約 3500 萬美元的資本支出。

With that, I will turn the call back over to Andrew.

有了這個，我會把電話轉回給安德魯。

Thank you, Bernie. As we close the book on 2022, and embark on the next phase of our strategy, I want to reiterate the confidence we have in our business. Lands' End is an iconic 60-year-old classic American lifestyle brand and with the foundation that Jerome and the team put in place we are well positioned to drive strong growth and profitability. This won't all happen overnight. We are taking aggressive achievable actions to simplify and refocus our efforts to ensure we are providing the high-quality products our customers' demand in the categories that they look for from us most and that we're engaging with them in whatever channel or venue they want. We've already announced a number of changes to our executive leadership team. and how we organize internally.

謝謝你，伯尼。當我們在 2022 年結束這本書並開始我們戰略的下一階段時，我想重申我們對我們業務的信心。 Lands' End 是一個具有 60 年曆史的標誌性經典美國生活方式品牌，憑藉 Jerome 和團隊奠定的基礎，我們有能力推動強勁的增長和盈利能力。這一切不會在一夜之間發生。我們正在採取積極可行的行動來簡化和重新調整我們的工作重點，以確保我們提供客戶最需要的類別中他們需要的高質量產品，並確保我們通過他們在任何渠道或地點與他們互動想。我們已經宣布了對執行領導團隊的一些變動。以及我們如何在內部組織。

And those changes are already having a positive effect. As a reminder, Peter Gray is now our Chief Commercial Officer. In this capacity, Peter is charged in driving revenue growth in existing businesses and developing new income streams. He overseas are e-commerce outfitters, B2B, third-party, retail and international businesses and will have responsibility for the company's license businesses and marketplace development. Angie Rieger is now our Chief Transformation Officer, where she will oversee the company's brand management and inventory planning functions. A long-time Lands' End leader, Angie is critical to ensuring a consistent flow of information across our operating groups, making sure its diverse constituents remain connected and that we move as an organization on 1 calendar.

這些變化已經產生了積極的影響。提醒一下，Peter Gray 現在是我們的首席商務官。在此職位上，Peter 負責推動現有業務的收入增長和開發新的收入來源。他在海外從事電子商務服裝、B2B、第三方、零售和國際業務，將負責公司的許可業務和市場開發。 Angie Rieger 現在是我們的首席轉型官，她將監督公司的品牌管理和庫存規劃職能。作為 Lands' End 的長期領導者，Angie 對於確保我們的運營團隊之間信息的一致流動至關重要，確保其不同的組成部分保持聯繫，並確保我們作為一個組織在 1 個日曆上移動。

Industry veteran, [Kim Mass] recently joined the company as Senior Vice President, Product and Merchandising reporting to Angie. Kim is responsible for developing and implementing growth strategies in merchandising and brand management for the company as well as testing new strategies and concepts for future growth. Sarah Rasmusen has taken on the newly created role of Chief Innovation Officer and will be responsible for driving our innovation efforts across the enterprise while ensuring the customer is at the center of all decisions.

行業資深人士 [Kim Mass] 最近加入公司，擔任產品和營銷高級副總裁，向 Angie 匯報工作。 Kim 負責為公司製定和實施商品銷售和品牌管理方面的增長戰略，並測試未來增長的新戰略和概念。 Sarah Rasmusen 擔任了新設立的首席創新官一職，將負責推動我們在整個企業的創新工作，同時確保客戶處於所有決策的中心。

Sarah's charge is to deliver innovative customer-centric connections, leveraging our data and driving it across the organization in ways that prioritize activities to grow our digitally native company. I'm confident these organizational changes better position us to be more product-driven and nimble as we deliver on our strategies. We'll look forward to providing additional updates on our strategy as we continue to make progress on our initiatives. In the meantime, my mantra is execute, execute, execute. And we'll continue working to do that so we can deliver for our customers, employees and shareholders.

Sarah 的職責是提供創新的以客戶為中心的聯繫，利用我們的數據並以優先考慮活動的方式在整個組織中推動它發展我們的數字原生公司。我相信這些組織變革可以更好地讓我們在執行戰略時更加以產品為導向，更加靈活。隨著我們繼續在我們的計劃上取得進展，我們將期待提供更多關於我們戰略的更新。與此同時，我的口頭禪是執行、執行、執行。我們將繼續努力做到這一點，以便我們能夠為我們的客戶、員工和股東提供服務。

With that, we look forward to your questions.

有了這個，我們期待您的提問。

I think we have a question from Dana Telsey. Alex, are you available to ask a question? Operator, are you able to start the Q&A session, please? Alex, do you have a question?

我想我們有 Dana Telsey 的問題。亞歷克斯，你可以提問嗎？接線員，可以開始問答環節了嗎？亞歷克斯，你有問題嗎？

I sure do. Can you guys hear me?

我當然知道。你們能聽到我說話嗎？

We can hear you.

我們能聽到你的聲音。

All right. That's terrific. Well, congratulations guys on a strong finish to the year and what sounds like a pretty good start to 2023. I wanted to ask about gross margins. It sounds like you're looking for that to be up nicely in '23. Can you give us a sense of how much of that is coming from lower costs that you have good visibility into and what your expectation is for promotions compared to last year, which sounds like was a little bit more than usual.

好的。真了不起。好吧，祝賀你們今年取得了不錯的成績，這聽起來像是 2023 年的一個不錯的開始。我想問一下毛利率。聽起來您希望它在 23 年表現出色。您能否告訴我們其中有多少來自您對較低成本的了解以及與去年相比您對促銷的期望是什麼，這聽起來比平時多一點。

Sure, Alex. I'll take the costs. We are already experiencing lower inbound transportation cost year-on-year, which we expect to continue throughout the year. And then from a promotional activity, we finished 2022 by getting our inventory in a very healthy position, which is going to allow us to optimize our promotional and markdown activity into 2023. And Andrew, did you want to add to that?

當然，亞歷克斯。費用我來承擔。我們已經經歷了同比下降的入境運輸成本，我們預計這一趨勢將在全年持續。然後，通過促銷活動，我們在 2022 年結束時讓我們的庫存處於非常健康的狀態，這將使我們能夠優化我們的促銷和降價活動到 2023 年。安德魯，你想補充嗎？

Yes. I mean I think -- I mean, just picking up on what Bernie said, we feel really good about the inventory and cleaning those up. That was important to us to get ourselves that we had seasonally appropriate merchandise that we could lean into for the customer as we look at it, and I think for those of you, and I know you do watch the site, we saw that by starting to win early, we were able to -- we built momentum with the customer in January and really use that as a springboard into the first quarter, and we'll do that through the year as we make that business into a year-round event. I think I'd also say on this, as we look at the 3 pockets of margin out there, obviously, we're going after the cost of the and we're working with our vendors on that. Bernie's mentioned that the transportation costs were fallen and then just having better merchandise, it's going to let us reduce the markdown levels that we're experiencing. So I think if you put all that together, there is a good margin tailwind here that we can get behind this year and start to look to get ourselves back to more historical levels of that business.

是的。我的意思是我認為 - 我的意思是，只要聽取伯尼所說的話，我們對庫存和清理庫存感覺非常好。對我們來說很重要的是讓我們自己擁有季節性合適的商品，我們可以在我們看到它時為客戶提供這些商品，我認為對於你們這些人來說，我知道你們確實看過這個網站，我們看到了這一點開始為了早日獲勝，我們能夠——我們在 1 月份與客戶建立了良好的勢頭，並將其作為進入第一季度的跳板，我們將在這一年中做到這一點，因為我們將這項業務變成了一項全年活動.我想我也會說這個，當我們看到那裡的 3 個利潤空間時，很明顯，我們正在追求成本，我們正在與我們的供應商合作。伯尼提到運輸成本下降了，然後有了更好的商品，這將使我們降低我們正在經歷的降價水平。所以我認為，如果你把所有這些放在一起，這裡有一個很好的利潤順風，我們今年可以落後，並開始尋求讓自己回到該業務的更多歷史水平。

Okay. That's really helpful. And then it sounds like you had a lot of swim inventory at the beginning of the quarter here and expect to have that work down throughout the quarter? Is it fair to assume that the early reads on your swing though season are pretty strong then?

好的。這真的很有幫助。然後聽起來您在本季度初在這裡有很多游泳庫存，並希望在整個季度內減少庫存？假設你的揮桿的早期閱讀雖然賽季非常強大，這是否公平？

Yes. I would say that we're having a good start to swim. We decided to engage with it in December. It's not something that we've necessarily done in the business before but we felt like it's a year-round business by data, and we have immeasurable probes of data here. I said that ICR is still continuing to be astonished by it, was telling us about the customer -- certain customer cohorts were leaning in heavily in swim and we followed that through catch-up to ICR about owning the vacation. That's not changed. It's not just about selling swim, it's about the merchandise, but we've gathered around it. So we're selling from slight slides on our fleet for the hat on our head, and that's working strongly for us. Having that inventory, which arrived late last year and was not sellable at the time we got it -- available to go visually helped to fuel us with that early start, and we're going to build into it. So we're already getting into a situation where we're having to chase some swim because we're working through the inventory very quickly.

是的。我會說我們有一個良好的開始游泳。我們決定在 12 月與它合作。這不是我們以前在業務中必須做的事情，但我們覺得這是一個全年的數據業務，我們在這裡有不可估量的數據調查。我說 ICR 仍然對此感到驚訝，告訴我們關於客戶的情況——某些客戶群非常喜歡游泳，我們通過追趕 ICR 來了解擁有假期。那沒有改變。這不僅僅是關於銷售游泳，而是關於商品，但我們已經聚集在它周圍。因此，我們正在為頭上的帽子從機隊的輕微下滑中進行銷售，這對我們來說非常有效。擁有去年年底到貨且在我們拿到它時無法出售的庫存 - 可以在視覺上幫助我們早日開始，我們將建立它。所以我們已經陷入了不得不去游泳的境地，因為我們正在非常快速地清點庫存。

Well, that is exciting. And then kids, it sounds like kids have been down for you lately that historically has been a pretty strong category for Land. Do you have a sense of why that business has been weak? And are you expecting any improvement this year?

嗯，這很令人興奮。然後是孩子們，聽起來孩子們最近對你很失望，從歷史上看，這對 Land 來說是一個非常強大的類別。您知道為什麼該業務一直疲軟嗎？你預計今年會有什麼改善嗎？

I think we've seen the weakness in the business because we've been in and out of it in a way. We had tried to license it going into the pandemic. we put that license back. We tried to run it ourselves and we've under-resourced it. And I think for us, it's a strategic decision about how we resource that appropriately going forward. We've talked about various ways to execute that business. We're not going to walk away from kids, should be the takeaway in this, but we will look for ways to improve it, make sure it's appropriately resourced and find its place in the family variety of Lands' End.

我認為我們已經看到了業務中的弱點，因為我們在某種程度上進進出出。我們曾試圖許可它進入大流行。我們把那個許可證放回去了。我們試圖自己運行它，但我們的資源不足。我認為對我們來說，這是一個關於我們如何適當地為未來提供資源的戰略決策。我們已經討論了執行該業務的各種方法。我們不會放棄孩子，這應該是其中的要點，但我們將尋找改進它的方法，確保它得到適當的資源，並在 Lands' End 的家庭品種中找到它的位置。

Our next question will be coming from the line of Dana Telsey with Healthy Group.

我們的下一個問題將來自 Healthy Group 的 Dana Telsey。

I hope you can hear me now.

我希望你現在能聽到我的聲音。

Yes, I could hear you now Dana.

是的，我現在能聽到你了，達娜。

So Andrew, you mentioned throughout the call the focus on data, and it seems like that's one of the key elements that you're bringing to the Lands' End brands. As you think about the different channels, you also mentioned the additional marketplaces. How do you see whether it's outfitters, whether it's e-commerce, how do you see the channels penetration differing as we move forward? And what could that mean for margins? And then just in the near term, with the promotional environment, how are you planning in terms of margins to manage the promotional environment, whether by channel, whether by category? And then lastly, on cotton costs and raw material costs, what does that mean for your cost of goods as we move through the year? And 1 more thing, retail. I think you had thought about retail as being a potential opportunity, is it?

所以安德魯，你在整個電話會議中都提到了對數據的關注，這似乎是你為 Lands' End 品牌帶來的關鍵要素之一。當您考慮不同的渠道時，您還提到了其他市場。您如何看待它是服裝商，還是電子商務，您如何看待我們前進時渠道滲透率的不同？這對利潤意味著什麼？然後就在短期內，對於促銷環境，您如何在利潤方面進行規劃以管理促銷環境，無論是按渠道還是按類別？最後，關於棉花成本和原材料成本，這對我們全年的商品成本意味著什麼？還有一件事，零售。我認為您曾將零售業視為一個潛在機會，對嗎？

All right. Thanks for that point. Let's see. I'll start with retail. It's one of the list of things that we're evaluating, Dana. I would say this, as we continue to refine and look at the ROI of retail, we think there is other priorities that are going to be ahead of it. So I don't see it being a busier part of the strategy. You may see some experiments from us, but we're not going to lean into that specifically. Coming back to it, we do see a lot of data. We have an amazing amount of data. And the data, we stopped looking at the customer just in terms of a demographic, and we started looking at behavioral cohorts. And as we got further into those behavioral cohorts, we've seen that there are patterns in the customer that we can use to help them connect the dots across our categories.

好的。謝謝你的觀點。讓我們來看看。我將從零售開始。 Dana，這是我們正在評估的事情清單之一。我會這樣說，隨著我們繼續完善和審視零售業的投資回報率，我們認為還有其他優先事項將排在它之前。所以我不認為它是戰略中更繁忙的部分。您可能會看到我們的一些實驗，但我們不打算專門研究它。回過頭來，我們確實看到了很多數據。我們擁有驚人的數據量。在數據方面，我們不再僅僅根據人口統計來看待客戶，而是開始關注行為群體。隨著我們深入研究這些行為群體，我們發現客戶中存在一些模式，我們可以使用這些模式來幫助他們將我們類別中的點聯繫起來。

So whereas we have had cohorts for the customer tend to just shop 1 item outerwear. That might be the shopper that they are -- swim that might be the shopper that they are. We've looked for ways to connect them across our categories. The best example I can give you is, the mom who's shopping first school uniform for her kids. It's a great school uniform business for us. We see that she was leaning into our swim and by encouraging her, by advertising to her directly, marketing to her with our catalog, we've been able to engage her with our swim product. Once you get into the swim product, we see that the collection of goods that sit around that, as I mentioned earlier, which is going to move from slides on our feet that hat on her head and swim dresses in between. And I do want to call that out because I look at a business like swim dresses, which has been a nice business for us, but the opportunity to store into it as we see this pattern and how the customer shops and how we push to them, that become really important to us. And it actually helps in how we manage those promotions.

因此，儘管我們有一群顧客傾向於只購買一件外套。這可能就是他們的購物者 - 游泳可能就是他們的購物者。我們一直在尋找方法將它們連接到我們的類別中。我能給你的最好例子是，一位媽媽正在為她的孩子購買第一件校服。這對我們來說是一項很棒的校服業務。我們看到她喜歡我們的游泳，通過鼓勵她，通過直接向她做廣告，用我們的目錄向她推銷，我們已經能夠讓她接觸我們的游泳產品。一旦你進入游泳產品，我們就會看到周圍的商品系列，正如我之前提到的，它將從我們腳上的滑梯、頭上的帽子和介於兩者之間的泳裝移動。我確實想指出這一點，因為我看到像泳裝這樣的業務，這對我們來說是一個不錯的業務，但是當我們看到這種模式以及客戶如何購物以及我們如何推動他們時，有機會存儲它，這對我們來說變得非常重要。它實際上有助於我們管理這些促銷活動。

We moved in the fourth quarter to an AI integrated system for e-mail. And within that system, we're able to look at these customer cohorts and look at the behaviors that they exhibit a market more specifically against them. So we're getting less and being more specific and accurate and thoughtful going forward. And that's a big effort for us as we sort of bring that into the business in general from how we approach search in the future to how we think about alternate digital channels that's going to remain really important to us. Now I want to get back to your next question, which was around the wholesalers. We largely derisked ourselves from any wholesale ups and downs. Over 70% of what we do in the wholesale channel with our marketplaces, it's digital. It's done with a click.

我們在第四季度轉向了電子郵件的 AI 集成系統。在該系統中，我們能夠查看這些客戶群體，並查看他們在市場上更具體地針對他們展示的行為。所以我們越來越少，越來越具體、準確和周到。這對我們來說是一項巨大的努力，因為我們將其從我們如何處理未來的搜索到我們如何考慮對我們仍然非常重要的替代數字渠道的一般業務中進行。現在我想回到你的下一個問題，這個問題是關於批發商的。我們在很大程度上擺脫了任何批發起伏的風險。在我們的市場批發渠道中，超過 70% 的業務都是數字化的。只需單擊一下即可完成。

So I come back to the comments that I made, over 90% of what we do is done with a click. And we focus greatly on making sure that, that business is optimized, and that's the lean in for us. So we only have a small exposure to inventory within the doors of these wholesalers, and we see tremendous energy. I can talk about some of them like Target has come online. It has been a phenomenal start. I think Macy's is going to go down the same path. That leans into our wheelhouse. And we're able to connect the dots with that data. We see a new customer coming in, and we're picking up low teens across -- we're picking up new customers from those orders to the tune of low teens. So I think there's opportunity to continue to grow that, and we find that with the data we're bringing to bear.

所以我回到我所做的評論，我們所做的 90% 以上都是通過單擊完成的。我們非常專注於確保業務得到優化，這就是我們的精益。因此，我們只接觸到這些批發商內部的少量庫存，但我們看到了巨大的能量。我可以談談其中的一些，比如 Target 已經上線。這是一個非凡的開始。我認為梅西百貨會走同樣的路。那傾斜到我們的駕駛室。我們能夠將這些點與這些數據聯繫起來。我們看到一個新客戶進來了，我們正在接聽低青少年——我們正在從這些訂單中接新客戶到低青少年。所以我認為有機會繼續發展，我們發現我們正在承擔的數據。

The last question you had was around cotton prices. Bernie will take that.

您的最後一個問題是關於棉花價格的。伯尼會接受的。

Yes, I'll take that, Dana. We will experience some headwinds in the first half around fabric cost but we expect that to dissipate in the back half. And then when you talked about the promotional environment, we -- each month in the fourth quarter, we got sequentially better, and we've seen that progress into the first quarter of this year of improvement, but it is still a promotional environment at this time.

是的，我會接受的，達娜。上半年我們將在面料成本方面遇到一些不利因素，但我們預計這種情況會在下半年消散。然後當你談到促銷環境時，我們 - 在第四季度的每個月，我們都連續變得更好，我們已經看到今年第一季度的進步，但它仍然是一個促銷環境這次。

I'm showing no further questions at this time. Thank you for participating. This concludes today's program. You may now disconnect.

我現在沒有進一步的問題。感謝您的參與。今天的節目到此結束。您現在可以斷開連接。