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Lands' End stock dives
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July 24, 2000: 1:40 p.m. ET
Catalog retailer lowers Q2 sales forecast for second time in two months
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NEW YORK (CNNfn) - Catalog retailer Lands' End stock plunged more than 20 percent Monday after the company said it expects second-quarter earnings to be about half of last year's figure of 14 cents a share, and that it anticipates a slowdown in sales growth.
That's the second time in a month the company lowered its sales forecasts.
In addition to lowered earnings expectations, Dodgeville, Wis.-based Lands' End (LE: Research, Estimates) said it expects sales to be flat compared with the year-ago quarter.
Lands' End stock fell 23 percent on the news. Shares were down 9-1/4 to 30-7/8, in midday trading Tuesday.
Lands' End quarter ends July 28, and the company expects to report earnings on Aug. 10.
The company also said it expects to miss its lowered 6 percent sales growth target for the full year.
In addition, Lands' End expects earnings per share of $1.52 for fiscal 2001 to come in about 20 percent above last year.
A Lands' End spokeswoman said the company will provide more details when it reports second-quarter results next month.
Last month, the company warned that its earnings for the first half of fiscal 2001 would be flat, and lowered its sales growth expectations to about 6 percent from more than 6 percent.
Lands' End, which is providing earnings guidance this year for the first time in the 15 years since it went public, blamed the decline on soft sales in Japan and weakness in its specialty catalogs.
Kevin Silverman, an analyst with ABN AMRO Inc., said he suspects the company's lowered expectations to come from continued softness in its "Coming Home" home furnishings, bed and bath line due to rising interest rates and slower home sales. Other factors include some softness in men's corporate wear book "Lands' End for Men.
But Silverman said he saw strength coming from the company's children's line despite competition from other catalogue and bricks and mortar retailers such as L.L. Bean and Talbot's.
"The company over the last two years has been making good strides on earnings, but it's been coming on the expense side. The top line has been a bit challenged," Silverman said. "The opportunity here is to accelerate top-line growth. They've been running into a bit of a saturated market in their core products. Their challenge is to find some other things that are fast growing."
Silverman said Lands' End has been making strides in corporate sales of logo shirts and uniforms. 
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Lands' End
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