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Lands' End stock surges
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January 14, 2000: 3:47 p.m. ET
Holiday earnings jump despite sales decline; results beat forecasts
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NEW YORK (CNNfn) - Shares of Lands' End Inc. surged Friday, one day after the retailer said its holiday season net income was higher than expected.
The Dodgeville, Wis.-based catalog and online retailer's stock was up more than 10 percent in the early afternoon.
Lands' End said Thursday net income for the eight-week holiday sales period was $33.4 million, up 32.8 percent from the year-ago period. On a per share bases, the company posted diluted earnings of $1.08, compared with 83 cents a year earlier.
Analysts polled by First Call Corp. had expected a profit of 98 cents per share for the latest period.
"Lands' End beat the consensus in just eight weeks," said Kevin Silverman, an analysts with ABN Amro.
The company said net sales for the period were down 14.6 percent and Lands' End, the No.1 apparel seller online, had mailed out about 25 percent fewer catalog pages this year.
"They slashed a lot catalog expenses and over distribution in favor of bottom line profitability," said Kelly Armstrong, an analyst with First Union Securities.
"I think that investors have had a chance to digest yesterday's holiday release," Silverman said. "Basically, this is a very profitable company and (it) continues to be so."
Derek Leckow, an analyst with Barrington Research in Chicago, said Lands' End already had warned investors about lower sales. The company's shares were up 3-5/8 to 38-1/2 in afternoon trading, far below their 52-week high of 83-1/2.
"The stock had already come down quite a bit," he said. "The disappointment, or perceived disappointment, was already priced into the stock."
Leckow also said Lands' End told analysts during a conference call that the company had tested some new products during the holiday season and had a fairly positive response.
In addition, Armstrong said natural fiber prices have been down significantly in the 90s, which is good news for apparel makers.
Earlier in the day, Credit Suisse First Boston raised its rating of Lands' End (LE) to "buy" from "hold," and Goldman Sachs raised its fiscal year 2000 earnings per share estimate on the company to $1.70 from $1.50 
-- from staff and wire reports
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Lands' End
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