Shares of Lands' End, Inc. (LE) achieved a new high of $45.86 yesterday before closing trade at $45.71. The stock has been gaining momentum since it reported robust financial results for second-quarter fiscal 2014 on Sep 10. Notably, this catalog based fashion retailer amassed a return of 37.1% since reporting the results.
The company posted better-than-expected second-quarter results, wherein both top and bottom lines came ahead of the Zacks Consensus Estimate, while marking a year-over-year improvement. This was the company’s second consecutive quarter of positive performance since its separation from the parent company, Sears Holdings Corporation (SHLD), on Apr 7, 2014.
Lands’ End reported quarterly earnings of 37 cents per share, which surged over twofold compared with the Zacks Consensus Estimate and grew 5.7% year-over-year. The company’s bottom-line results mainly benefited from increased sales and improved margins.
Net sales for the quarter grew 5.4% year over year to $347.2 million, primarily driven by robust performance at the Direct segment. Moreover, net sales came ahead of the Zacks Consensus Estimate of $333 million.
We believe that the company’s sustained focus on improvising merchandise assortments along with efficient inventory and cost management will continue to boost its top and bottom line results.
Further, looking at the company’s two back-to-back quarters of strong financial performance, we believe Lands’ End will continue its upbeat performance driven by its growth initiatives. This is evident from solid earnings estimate revisions seen over the past 7 days, suggesting analysts are becoming bit more bullish on the firm’s prospects in both the short and long term.
Over the last 7 days, the Zacks Consensus Estimate for fiscal 2014 and 2015 increased 10% and 4.8%, respectively. The Zacks Consensus Estimate for fiscal 2014 and 2015 are currently pegged at $2.52 and $2.60 per share, respectively.
Moreover, this Zacks Rank #1 (Strong Buy) company looks attractive from valuation perspective. Lands’ End is currently trading at a forward P/E of 18.14x, a 4% discount from the industry average of 18.90x. In addition, the company’s long-term EPS growth rate of 20% is in-line with the industry average. Its last traded price is nearly 9.4% lower than the Zacks Consensus average analyst price target of $50.00.
Apart from Lands’ End, V.F. Corporation (VFC) and Leggett & Platt Incorporated (LEG) hit new 52-week highs of $66.72 and $35.75, respectively, on Sep 17, 2014.
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