Lands’ End, Inc. (NASDAQ:LE) Q4 2022 Earnings Call Transcript

And I do want to call that out because I look at a business like swim dresses, which is a nice business for us, but the opportunity to store into it as we see this patent and how the customer shops and how we push to them, has become really important to us, and it actually helps in how we manage those promotions. We moved in the fourth quarter to an AI integrated system for email. And within that system, we’re able to look at these customer cohorts and look at the behaviors that they exhibit, and market more specifically against them. So, we’re guessing 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 de-risked ourselves from any wholesale ups and downs. Over 70% of what we do in the wholesale channel with our marketplaces, is digital. It’s done with a click. So, I come back to the comments I made, that over 90% of what we do is done with a click, and we focus greatly on making sure that business is optimized and that’s – they’ll 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 could talk about some of them, like Target has come online and 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 crossover – we’re picking up new customers from those orders to the tune of low teens. So, I think there’s an opportunity to continue to grow that and refine that with the data we’re bringing to bear. The last question you had was around cotton prices, and I’ll let Bernie take that.

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

Dana Telsey: Thank you.

Operator: And thank you all. I’m showing no further questions at this time. Thank you for participating. This concludes today’s program. You may now disconnect.