Jung-Yung Jonathan Chang | February 11, 2015

Lands End Pitch (NASDAQ: LE)| Equity Analysis

Sell-Off Following 4th Quarter Provides Exclusive Opportunity for Undervalued Company with
Growing Margins and a Variety of Growth Intentions (40% Upside) Parent Company Sears
Overshadowing Lands Ends Image, Leading to Market Mispricing

Long Stock Pitch and Valuation

Lands End Pitch (NASDAQ: LE)

Table of Contents
I.

INDUSTRY OVERVIEW 3

II.

COMPANY OVERVIEW 7

III.

FINANCIAL OVERVIEW.. 16

IV.

APPENDIX.. 22

Long Stock Pitch and Valuation

Lands End Pitch (NASDAQ: LE)

Industry Overview | Consumer Retail and Products

Long Stock Pitch and Valuation

Industry Overview

Lands End Pitch (NASDAQ: LE)

Internet Expansion Boosting Apparel Retailer Sales

E-commerce now makes up 6.6% of US retail sales which is up from slightly less than 2% from a decade ago. Moving online allows
retailers to be able to access a larger consumer base and boost awareness of the products. It builds brand recognition and can help to
get rid of excess inventory. These sales have lead to a boost in apparel retailers sales.

Long Stock Pitch and Valuation

Sources:

Bloomberg, John Buzolits & Poonam Goyal

Industry Overview

Lands End Pitch (NASDAQ: LE)

Global Oversupply of Cotton Leading to Decreased Pricing

ICE:TT (Cotton) Pricing
1

0.95
0.9
0.85
0.8
0.75
0.7
0.65
0.6
0.55
0.5
2/1/2014

4/3/2014

6/3/2014

8/3/2014

10/3/2014

12/3/2014

2/2/2015

Cotton has decreased dramatically and have supported an increase in margins for apparel retailers. However, many other factors are
influencing retailers margins. For instance, online shopping requires retailers to take lower margins, Asias higher wages, and higher
ground shipping rates in the United States will all prove to be potential risks to consider for the whole industry.

Long Stock Pitch and Valuation

Sources:

Bloomberg, Capital IQ

Industry Overview

Lands End Pitch (NASDAQ: LE)

E-Commerce Surge Resulting in Smaller Stores and More Closing

There has been a rise in competition and a surge in online shopping which have been forcing some smaller retailers to exit the
industry. Consolidation seems to be a fairly prominent factor in the industry. With less opportunity for growth, a focus on margins
may be important. American Eagle plans to close 150 stores in the next 3 years while Abercrombie & Fitch plans to close 60 in
coming years. Aeropostale and Express have similar plans.
Long Stock Pitch and Valuation
Sources:

Bloomberg, John Buzolits & Poonam Goyal

Lands End Pitch (NASDAQ: LE)

Company Overview | Lands End

Long Stock Pitch and Valuation

Company Overview

Lands End Pitch (NASDAQ: LE)

Take care of the customer, take care of the employee, and the rest will
take care of itself. Guiding Principle by Gary Comer, Founder
Lands End, Inc. operates as a multi-channel retailer primarily in the United States, Europe, and Asia. The company operates through
two segments, Direct and Retail. It offers mens, womens, and kids apparel, outerwear, and swimwear; specialty apparel; accessories;
footwear; and home products. The company sells its products through e-commerce Websites, direct mail catalogs, phone, or in-store
computer kiosks, as well as standalone and dedicated stores. Lands End, Inc. was founded in 1963 and is based in Dodgeville,
Wisconsin. Lands' End, Inc. operates independently of Sears Holdings Corporation as of April 04, 2014.

60

5M

Price - Volume Performance

50

4M

Beat 3Q earnings
estimates by 40%

40

3M

Beat 2Q earnings
estimates by 113%

30

2M
20
1M

10

0
Mar-20-2014

0M
May-20-2014

Jul-20-2014

Sep-20-2014
Volume

Long Stock Pitch and Valuation

Sources:

Capital IQ, Company Website

Nov-20-2014

Jan-20-2015

Stock Price

Company Overview

Lands End Pitch (NASDAQ: LE)

Qualitative Company Core Competencies

Large and Loyal Customer Base
Lands End focuses on developing its existing and prospective households through use of advertising identification. Routine
updates and refining of customer lists before mailing of catalogs, emails allow monitoring of customer interests in a more
interactive manner. The customer list is targeted in a way as the demographic characteristics match desirable attributes that the
company is looking for. They are typically looking for the affluent, college-educated, professional and style-conscious women and
men. In 2013, the average annual household income of the customer was approximately $103,000 with ~44% of customers within
36-55 age group.

Innovative and Timeless Products

Modern and quality fabrics are used to construct new products that have timeless style and good fit. Lands believes that the typical
customer value quality and want to add classics to their wardrobe. It tries to balance a good mix of both new trends and classic
looks. Their in-house team manages product specifications to provide consistent merchandise. As a vertically integrated retailer, all
aspects of design, marketing and distribution is done in-house.

Excellent Customer Service

Lands End has a strong belief in customer service. Its had a successful track of improving customer service experience. For
instance, they were the first apparel retailer to offer a toll-free number and e-commerce enabled website launched in 1995.
Furthermore they incorporated features such as online chat, personalization features, and unconditional return policy. From 2006,
2012 Lands End was recognized by National Retail Federation as one of the top retailers for customer service.

Long Stock Pitch and Valuation

Sources:

Company 10-K SEC Filing

Company Overview

Lands End Pitch (NASDAQ: LE)

Overview of Sears Holdings and Lands End Relationship

Since spinning off from Sears Holdings Corporation (NASDAQ:SHLD) on April 4, 2014, Lands End (NASDAQ:LE) has been
facing skepticism on how it would operate, its debt levels, and a 48% ownership (which has now decreased to ~24%) by Sears CEO
Edward Lambert. Despite being one of the top performing divisions that Sears had, it has generally been thought of as a good move
for Lands End to separate itself from a suffering company that it had been a part of since being acquired in 2002. Lands End had
been one of the companys most profitable divisions, however Sears simply needed the cash to keep itself sustainable. In a
conversation between Mary Gilbert, an analyst with Imperial Capital LLC, and WSJ, she described Sears as getting rid of all the good
stuff and leaving bondholders with the underperforming assets in reference to Sears recent spinoff of Lands End.
80%

Absolute Performance: LE vs. SHLD

60%
40%
20%
0%
-20%
-40%
-60%
Mar-20-2014

May-20-2014

Jul-20-2014
Sears Holdings Corporation

Long Stock Pitch and Valuation

Sources:

Capital IQ, Company Website, Business Insider, WSJ

Sep-20-2014

Nov-20-2014

Jan-20-2015

Lands' End, Inc.

10

Company Overview

Lands End Pitch (NASDAQ: LE)

4Q Selloff of Lands End Stock Means its Now a Cheap Buy

By taking a look at the numbers, it makes little sense why Lands End is trading at such a significant discount to peers and intrinsic
valuation until the qualitative factors are analyzed further. Its association with Sears Holding and having Edward Lambert still
influencing the company has provided a negative stigma to the company as investors see it difficult for Lands End to be profitable
if Sears were to fully dissolve. These facts still overshadow the fact that the company has great numbers and sales growth
opportunities that are outlined by its management team. It did make a mistake in its winter fashion trend. The recent selloff where
Lands End saw its stock tumble from the price range of around $55 to $35 by no means seems justified. The trigger of the selloff
was a performance announcement by management that its fourth quarter sales and margins (4Q usually represent around a third
of the companys annual revenues) would be down. Considering the drop in the pricing, it could be assumed that the adjustment to
sales targets was 36% (drop from $55 to $35) less than expected. However, realistically, its net merchandise sales and service
revenues were around 4% lower than its 4Q results in 2013. Its gross margins actually slightly improved from around 43.9% up
from 43.7%. Its net income fell 20 - 26% but this is mostly attributed towards new interest expense as the company understandably
needed to take out debt after it spun-off from Sears. In the 3Q of 2013, the company had no debt at the time. Since the company
was already trading at a discount due to the negative view of the new found debt, it is astonishing how analyst expectations did not
already take into account the interest expense.

Post 4Q Selloff
With a forward P / E ratio of 14.5 x, Lands End is trading at more than a 50% discount to the mean of similar vertically
integrated brands and even more so compared to internet retail companies. At the moment, LE shares appear to be by no means
expensive; in fact, some would call it dirt cheap. For the majority of its time public since 2014, LE has traded fairly in line with its
comparables average daily multiple. With the recent selloff and Lands End and a spike in investor sentiment over some its peer
retail companies, it may be a very good opportunity to jump into Lands End before multiple expansion occurs. The market can
certainly be described as having overreacted to the performance update in the 4th quarter and will eventually correct itself in the
near future.

Long Stock Pitch and Valuation

Sources:

Company 10-K SEC Filing, Bloomberg, Capital IQ

11

Company Overview

Lands End Pitch (NASDAQ: LE)

4Q Selloff of Lands End Stock Means its Now a Cheap Buy

Long Stock Pitch and Valuation

Sources:

Bloomberg

12

Company Overview

Lands End Pitch (NASDAQ: LE)

Overlooked Gross Margin Growth and Increasing Profitability

1,600

56%

1,580
1,560

55%

1,540
1,520
1,500

54%

1,480
1,460

53%

1,440
1,420
1,400

52%
Feb 1 2013

Jan 31 2014
Total Revenue

Oct 31 2014
COGS % Sales

In terms of its past 3 performance periods, revenue growth might not look the most attractive with a decline of 1.5% and then an
increase of 1.2%. Furthermore, there has been repetitive news excerpts describing Lands End recent store closures. However there
is always two sides to one argument. As a company going through a lot of restructuring following a spinoff from its parent company
in which it had been with for the past 12 years, it is doubtful that the company will immediately begin focusing on growth
opportunities and satisfying pessimistic investors. In reality, it has to restructure its company to meet a new set of objectives that has
been established by management. In fact, the upside to stagnant growth is that the company has begun to cut a large of their COGS
with a decrease by 3.3% followed by another decrease of 2.0%. This increase in profitability is a solid indicator that the company is it
good financial shape and could continue to increase its margins in the future.

Long Stock Pitch and Valuation

Sources:

Capital IQ

13

Company Overview

Lands End Pitch (NASDAQ: LE)

Change in CEO from Huber to Marchionni Reinventing Lands End

Brand and Image

Edgar Huber

Federica Marchionni

The topic of historical stagnant growth leads well into the second point regarding the implementation of new CEO Federica
Marchionni who was with Italian luxury fashion designer powerhouse Dolce & Gabanna for most of the last 14 years in which she
was the president of the American division. As mentioned earlier, being part of Sears for such a long time has led to a damage of
Lands Ends brand image. The brand is set for a repositioning and Ma rchionni may be just the right person to lead the change (or
charge). The past CEO, Edgar Huber served his purpose in leading the company out of a mass restructuring change (leaving Sears)
and its good that Lands End has now decided to focus more so on improving its brand. It is also interesting to note that LE
received mixed customer reactions on its womens apparel particularly sweaters and knits indicating that some of LEs poor 4Q
results could be attributed to poor designs and trend alignment. Marchionni experience in working for high class brands such as
Ferrari, Samsung, Ericsson, and D&G will likely reinvigorate the brand and hopefully will have better judgment on fashion trends
such as sweaters or knits. Paula Rosenblum, an analyst working in Retail Systems Research described Marchionni as all about the
negotiations, she's all about opening channels, she's all about getting online being digitally astute. It's actually an interesting job for
her because if she can turn that brand around, it'll be a great story."

Long Stock Pitch and Valuation

Sources:

Business Insider, Journal Sentinel, Google Images, Huffington Post, Lands End Website

14

Company Overview

Lands End Pitch (NASDAQ: LE)

Segment Development and International Expansion

Product Offerings

Business Outfitter

International Expansion

In addition to managements plan in growing its Direct business segment through digital transformation and customization for each
of its consumers, LE is pursuing numerous growth strategies which management has outlined. The executive has acknowledged that
they neglected providing certain product offerings in the past and have expressed its interest in developing its footwear, handbags,
leather goods, and fashion accessory lines. In combination with Marchionnis influence, this will likely be beneficial in turning around
consumers perception of the brand to a classier image. They have also mentioned how they have experienced increasing productivity
in both its retail and Business Outfitter/School Uniform segments and that expanding on these parts of the company would be
likely. Its Business Outfitter division services tens of thousands of clients from major airlines to private schools across United States
and Canada. Finally, management has detailed how it is looking to take all of its operations on an international basis. Currently, it
operates in United States, Canada, Northern and Central Europe, and Japan. In addition to expanding its presence in these areas, it is
also looking to go to other areas of Europe (such as Switzerland, Russia, and Scandinavia) and Asia (particularly China). Its growth as
a trusted brand over the last 20 years and its capability to operate efficiently as a vertically integrated bran means it is well-positioned
to take its advantages and move abroad to pursue new growth opportunities.

Long Stock Pitch and Valuation

Sources:

10-K SEC Filing, Company Website

15

Lands End Pitch (NASDAQ: LE)

Financial Overview | Lands End

Long Stock Pitch and Valuation

16

Financial Overview

Lands End Pitch (NASDAQ: LE)

Valuation Summary
Current Price:
35.46

Target Price:
49.42

P / E 2015E (Similar Metrics)

$56.65

P / E 2015E (Overall)

$57.95

P / E 2016E(Similar Metrics)

$47.70

P / E 2016E(Overall)
$32.79

$70.51

$48.87

$48.58

EV / EBITDA 2015E (Similar Metrics)

$54.99

$37.59

EV / EBITDA 2015E (Overall)

$39.99

EV / Revenue 2015E (Similar Metric)

$48.41

$41.15

$50.48

EV / Revenue 2015E (Overall)

$58.19

DCF Gordon Growth Method

$70.33

$44.26

DCF Multiples Method

$65.13

$43.28
$25

Long Stock Pitch and Valuation

Sources:

$57.86

Capital IQ, Craig - Hallum Equity Research Report

$35

$49.97
$45

$55

$65

$75

17

Financial Overview

Lands End Pitch (NASDAQ: LE)

($ in millions, except per share data)

Public Company Comparables

The first group of comparables were found using screening criteria that looked for apparel retail companies that had YoY growth
of between -2% to 2% which is similar to Lands Ends 0.21% LTM growth. With Lands Ends EBIT margins ranging around
10%, companies with margins primarily between 5% and 15% were selected. To this comparables group, the industry group
traded at a median 8.8 x LTM EV / EBITDA which was in line with Lands Ends multiples. However, considering Lands Ends
previous trend of increasing margins, these multiples gave LE a higher implied valuation. Vertically integrated apparel brands were
taken from recommended equity research reports and were companies that were similar more so in operations. However, there
was a higher weighting in determination of target price on companies with similar metrics.
Market
Capitalization

( $ in millio ns, excep t r at io s)

Com pany Nam e

Enterprise
Value

LTM

EV / EBITDA
FY1

FY2

FCF
Margin %

Dividend
Yield %

LTM

Price / Earnings
FY1

FY2

EV / Revenue
LTM
FY1

Apparel Retail Com panies w ith YoY Grow th -2% to 2% and Sim ilar EBIT Margins (Sim ilar Metrics)
The Gap, Inc.
Cabela's Incorporated
DSW Inc.
Chico's FAS Inc.
The Buckle, Inc.
ANN INC.
Brown Shoe Co. Inc.
Speedway Motorsports Inc.
Tilly's,
Inc. Inc. (NasdaqGS:WEYS)
Weyco
Group

$17,451
3,807
3,228
2,811
2,399
1,670
1,281
968
367
299.2

$17,877
7,741
3,004
2,620
2,191
1,560
1,456
1,272
309
314.5

Mean
Median
Vertically Integrated Apparel Brands
L Brands, Inc.
Michael Kors Holdings Limited
PVH Corp.
Carter's, Inc.
Urban Outfitters Inc.
Kate Spade & Company
Oxford Industries Inc.

$27,375
14,277
8,605
4,395
4,958
4,220
903

$31,613
13,327
11,997
4,847
4,715
4,506
1,045

Mean
Median
Lands' End, Inc.

1,102

1,509

Overall Mean
Overall Median

Long Stock Pitch and Valuation

Sources:

Capital IQ, Craig-Hallum Equity Research Report

6.8 x
17.3 x
9.6 x
9.3 x
7.6 x
6.4 x
8.8 x
8.9 x
7.2
x
9.8

7.0 x
15.7 x
9.9 x
9.4 x
7.6 x
6.6 x
8.1 x
9.1 x
7.1 x-

6.7 x
13.9 x
8.7 x
8.2 x
7.4 x
6.0 x
7.5 x
8.8 x
6.4 x-

7.1%
5.1%
5.2%
13.1%
1.5%
0.5%
12.8%
2.2%
0.027

2.1%
2.0%
1.6%
7.4%
1.0%
2.6%
0.027-

14.6 x
19.2 x
21.4 x
27.5 x
14.7 x
20.1 x
18.7 x
23.2 x
26.6
x
17.5

14.7 x
17.1 x
22.4 x
27.9 x
14.7 x
21.4 x
17.4 x
24.8 x
27.8
x
16.74

13.6 x
14.9 x
19.5 x
22.4 x
14.3 x
17.6 x
15.0 x
21.6 x
23.5
x
14.47

1.1 x
2.1 x
1.2 x
1.0 x
1.9 x
0.6 x
0.6 x
2.6 x
0.6 x1

1.1 x
1.9 x
1.2 x
1.0 x
1.9 x
0.6 x
0.6 x
2.6 x
0.6
x
1.02

9.1 x
8.8 x

8.9 x
8.1 x

8.1 x
7.5 x

5.9%
5.1%

2.8%
2.1%

20.7 x
20.1 x

20.9 x
21.4 x

18.0 x
17.6 x

1.3 x
1.1 x

1.3 x
1.1 x

13.8 x
9.7 x
9.9 x
12.1 x
9.5 x
69.4 x
8.7 x

13.5 x
9.5 x
10.0 x
11.6 x
9.4 x
30.7 x
8.6 x

12.4 x
8.4 x
9.8 x
10.3 x
8.5 x
22.6 x
7.7 x

10.1%
9.4%
8.6%
2.1%
3.9%
13.3%
4.5%

1.5%
0.1%
0.9%
1.5%

28.9 x
18.9 x
17.0 x
24.8 x
23.4 x
18.2 x

27.5 x
16.5 x
14.3 x
21.4 x
22.8 x
106.9 x
18.8 x

24.4 x
14.8 x
13.2 x
18.3 x
19.2 x
55.9 x
16.5 x

2.8 x
3.2 x
1.5 x
1.7 x
1.5 x
3.1 x
1.1 x

2.8 x
3.0 x
1.5 x
1.7 x
1.4 x
4.0 x
1.1 x

19.0 x
9.9 x

13.3 x
10.0 x

11.4 x
9.8 x

7.4%
8.6%

1.0%
1.2%

21.9 x
21.2 x

32.6 x
21.4 x

23.2 x
18.3 x

2.1 x
1.7 x

2.2 x
1.7 x

8.8 x

9.3 x

9.5 x

11.9%

12.8 x

14.5 x

16.0 x

1.0 x

1.0 x

13.4 x
9.4 x

10.9 x
9.4 x

9.6 x
8.4 x

6.6%
5.2%

2.1%
1.6%

21.1 x
20.1 x

26.0 x
21.4 x

20.3 x
17.9 x

1.7 x
1.5 x

1.7 x
1.4 x

18

Financial Overview

Lands End Pitch (NASDAQ: LE)

($ in millions, except per share data)

Discounted Cash Flow Analysis

Unlevered Free Cash Flow Calculation
Calendar Year Ending December 31,
2012A
2013P
2014P
2015E
2016E
2017E
$1,585.9
$1,562.9
$1,581.2
1612.824 0 1645.0805 0 1677.9821
-2.0%
$1,549.6
$1,518.6
$1,488.2
0.0%
$1,581.2
$1,581.2
$1,581.2
2.0%
$1,612.8
$1,645.1
$1,678.0
$84.5
$126.7
$151.7
$177.4
$181.0
$184.6
$107.6
$148.3
$171.7
$199.0
$202.6
$206.2
$30.2
$73.8
$6.9
$130.5
$132.7
$134.9

Revenue:
Conservative Projections
Base Projections
Optimistic Projections
EBIT
EBITDA
Unlevered Free Cash Flow
EBITDA Multiples Method
WACC
6.1%
Exit Multiple
2017E EBITDA
Terminal Value

9.5 x
$206.2
$1,958.7

Total Enterprise Value

$1,993.4

Debt
Cash

512.4
105.6

Total Equity Value

Diluted Shares Outstanding
Fair Value Per Share
Current Price
Implied Upside

Perpetuity Growth Rate

2017E UFCF
Terminal Value

Base Case

Total Enterprise Value

Bear Base

Debt
Cash

$1,586.6
32.0
$49.58
35.46
40%

Total Equity Value

Diluted Shares Outstanding

Bull Case

$39

Long Stock Pitch and Valuation

Sources:

Perpetuity Growth Method

WACC
6.1%

Multiples Method

Capital IQ, Craig-Hallum Equity Research Report

$43

$47

$51

Fair Value Per Share

Current Price
Implied Upside

0.00%
$134.9
$2,209.45

CAGR
2012-2014
(0.1%)

34.0%
26.3%

Growth Method
Base Case

$2,203.3
512.4
105.6

Bear Base

$1,796.5
32.0
$56.14
35.46
58%

Bull Case

$40

$50

$60

$70

19

Financial Overview

Lands End Pitch (NASDAQ: LE)

Sensitivity Analysis
DCF Analysis: EBITDA Multiple Method

Discount
Rate
(WACC)

Discount
Rate
(WACC)

6.0%
6.5%
7.0%

Total Enterprise Value

Terminal EBITDA Multiple
11.5x
12.0x
12.5x
$2,008.1
$2,085.8
$2,163.5
1,981.0
2,057.6
2,134.2
1,954.4
2,029.9
2,105.4

6.0%
6.5%
7.0%

Implied Perpetuity Growth Rate

Terminal EBITDA Multiple
11.5x
12.0x
12.5x
1.90%
2.06%
2.21%
2.38%
2.54%
2.70%
2.86%
3.02%
3.18%

Discount
Rate
(WACC)

Discount
Rate
(WACC)

6.0%
6.5%
7.0%

Total Equity Value

Terminal EBITDA Multiple
11.5x
12.0x
12.5x
$1,601.3
$1,679.0
$1,756.7
1,574.2
1,650.8
1,727.4
1,547.6
1,623.1
1,698.6

6.0%
6.5%
7.0%

Total Price Per Share

Terminal EBITDA Multiple
11.5x
12.0x
12.5x
$50.04
$52.47
$54.90
49.19
51.59
53.98
48.36
50.72
53.08

6.0%
6.5%
7.0%

Total Equity Value

Terminal Perpetuity Growth Rate
1.75%
2.25%
2.75%
$1,536.6
$1,776.6
$2,090.7
1,331.2
1,518.7
1,756.5
1,165.0
1,315.3
1,501.1

6.0%
6.5%
7.0%

Total Price Per Share

Terminal Perpetuity Growth Rate
1.75%
2.25%
2.75%
$48.02
$55.52
$65.34
41.60
47.46
54.89
36.41
41.10
46.91

DCF Analysis: Perpetuity Growth Method

Discount
Rate
(WACC)

Discount
Rate
(WACC)

6.0%
6.5%
7.0%

Total Enterprise Value

Terminal Perpetuity Growth Rate
1.75%
2.25%
2.75%
$1,943.4
$2,183.4
$2,497.5
1,738.0
1,925.5
2,163.3
1,571.8
1,722.1
1,907.9

6.0%
6.5%
7.0%

Implied Terminal EBITDA Multiple

Terminal Perpetuity Growth Rate
1.75%
2.25%
2.75%
12.5x
14.3x
16.6x
11.2x
12.6x
14.4x
10.2x
11.3x
12.7x

Discount
Rate
(WACC)

Discount
Rate
(WACC)

(1) Assumes net debt of $406.8mm as of 5/16/08.

(2) Assumes outstanding diluted shares of 32.000 million.

Long Stock Pitch and Valuation

Sources:

Capital IQ, Craig-Hallum Equity Research Report

20

Financial Overview

Lands End Pitch (NASDAQ: LE)

Recommendation:
Buy Lands End at Market Price
39.4% Implied Return

Long Stock Pitch and Valuation

Sources:

Capital IQ, Craig-Hallum Equity Research Report

21

Lands End Pitch (NASDAQ: LE)

Appendix

Long Stock Pitch and Valuation

22

Appendix

Lands End Pitch (NASDAQ: LE)

Historical Income Statement

Income Statement
For the Fiscal Period Ending

Currency
Revenue
Other Revenue
Total Revenue
Gross Profit
Selling General & Admin Exp.
R & D Exp.
Depreciation & Amort.
Other Operating Expense/(Income)
Other Operating Exp., Total
Operating Income
Interest Expense
Interest and Invest. Income
Net Interest Exp.
Currency Exchange Gains (Loss)
Other Non-Operating Inc. (Exp.)
EBT Excl. Unusual Items
Restructuring Charges
Impairment of Goodwill
Legal Settlements
Other Unusual Items
EBT Incl. Unusual Items
Income Tax Expense
Earnings from Cont. Ops.
Earnings of Discontinued Ops.
Extraord. Item & Account. Change
Net Income to Company
Minority Int. in Earnings
Net Income

Long Stock Pitch and Valuation

Sources:

Capital IQ

12 months
Feb-01-2002

12 months
Jan-28-2011

12 months
Jan-27-2012

12 months
Feb-01-2013

12 months
Jan-31-2014

LTM
12 months
Oct-31-2014

USD

USD

USD

USD

USD

USD

1,569.1
1,569.1
688.8
575.7
575.7
113.2
(1.4)
1.5
0.2
(1.7)
(3.7)
107.9
107.9
41.0
66.9
66.9
66.9

1,655.6
1,655.6
822.0
615.5
22.0
0.0
637.4
184.5
0.0
184.6
9.1
193.6
72.4
121.3
121.3
121.3

1,725.6
1,725.6
766.0
621.0
22.7
0.5
644.2
121.8
0.1
121.9
121.9
45.7
76.2
76.2
76.2

1,585.9
1,585.9
704.1
596.4
23.1
0.1
619.6
84.5
0.1
84.5
(2.5)
82.1
32.2
49.8
49.8
49.8

1,562.9
1,562.9
710.3
561.9
21.6
0.1
583.6
126.7
0.1
126.8
1.6
128.4
49.5
78.8
78.8
78.8

1,581.2
1,581.2
745.3
573.6
20.0
0.1
593.6
151.7
(14.3)
(14.3)
0.8
138.2
2.3
140.5
53.8
86.6
86.6
86.6

23

Appendix

Lands End Pitch (NASDAQ: LE)

Historical Balance Sheet

Balance Sheet
Balance Sheet as of:

Currency
ASSETS
Cash And Equivalents
Total Cash & ST Investments
Accounts Receivable
Total Receivables
Inventory
Prepaid Exp.
Deferred Tax Assets, Curr.
Restricted Cash
Other Current Assets
Total Current Assets
Gross Property, Plant & Equipment
Accumulated Depreciation
Net Property, Plant & Equipment
Goodwill
Other Intangibles
Other Long-Term Assets
Total Assets
LIABILITIES
Accounts Payable
Accrued Exp.
Short-term Borrowings
Curr. Port. of LT Debt
Curr. Income Taxes Payable
Unearned Revenue, Current
Def. Tax Liability, Curr.
Other Current Liabilities
Total Current Liabilities
Long-Term Debt
Pension & Other Post-Retire. Benefits
Def. Tax Liability, Non-Curr.
Other Non-Current Liabilities
Total Liabilities
Common Stock
Additional Paid In Capital
Retained Earnings
Treasury Stock
Comprehensive Inc. and Other
Total Common Equity
Total Equity
Total Liabilities And Equity

Long Stock Pitch and Valuation

Sources:

Capital IQ

Feb-01-2002

Jan-28-2011

Jan-27-2012

Feb-01-2013

Jan-31-2014

Oct-31-2014

USD

USD

USD

USD

USD

USD

122.1
122.1
13.3
13.3
227.2
24.1
15.9
402.6
344.2
(150.3)
193.9
2.7
599.1

15.6
15.6
33.1
33.1
395.6
28.4
3.4
476.1
238.0
(123.0)
115.0
110.0
536.6
1.2
1,238.9

28.3
28.3
27.1
27.1
378.5
7.4
3.3
18.6
463.2
250.9
(141.2)
109.7
110.0
534.0
0.8
1,217.7

22.4
22.4
33.6
33.6
369.9
6.4
3.3
15.6
451.2
258.8
(157.7)
101.1
110.0
531.3
0.6
1,194.3

105.6
105.6
39.5
39.5
403.9
40.4
3.3
592.6
99.1
110.0
529.4
22.9
1,354.0

83.4
51.7
16.2
25.0
9.4
185.6
12.8
198.4
0.4
48.0
556.0
(206.9)
3.3
400.7
400.7
599.1

105.8
15.4
38.3
0.3
30.3
190.1
1.8
201.5
1.6
395.1
845.4
(1.5)
843.8
843.8
1,238.9

106.7
13.4
40.5
7.3
25.8
193.7
196.6
4.2
394.5
826.4
(3.2)
823.2
823.2
1,217.7

115.4
13.8
44.8
4.0
25.4
203.4
195.5
3.1
402.0
794.3
(2.0)
792.3
792.3
1,194.3

157.7
5.2
2.9
116.8
282.4
507.3
172.9
17.4
980.1
0.3
342.1
35.8
(4.3)
373.9
373.9
1,354.0

24

Appendix

Lands End Pitch (NASDAQ: LE)

Historical Cash Flow Statement

Cash Flow
12 months
Feb-01-2002

12 months
Jan-28-2011

12 months
Jan-27-2012

12 months
Feb-01-2013

12 months
Jan-31-2014

LTM
12 months
Oct-31-2014

Currency

USD

USD

USD

USD

USD

USD

Net Income
Depreciation & Amort.
Amort. of Goodwill and Intangibles
Depreciation & Amort., Total
Other Amortization
(Gain) Loss From Sale Of Assets
Stock-Based Compensation
Tax Benefit from Stock Options
Other Operating Activities
Change in Acc. Receivable
Change In Inventories
Change in Acc. Payable
Change in Inc. Taxes
Change in Other Net Operating Assets
Cash from Ops.
Capital Expenditure
Sale of Property, Plant, and Equipment
Other Investing Activities
Cash from Investing
Short Term Debt Issued
Long-Term Debt Issued
Total Debt Issued
Short Term Debt Repaid
Long-Term Debt Repaid
Total Debt Repaid
Issuance of Common Stock
Repurchase of Common Stock
Common Dividends Paid
Total Dividends Paid
Special Dividend Paid
Other Financing Activities
Cash from Financing
Foreign Exchange Rate Adj.
Net Change in Cash

66.9
26.9
26.9
2.4
0.1
7.7
(8.8)
6.5
(39.0)
(12.8)
11.7
11.9
73.5
(40.5)
(40.5)
(0.8)
(0.8)
26.9
(12.4)
13.7
46.7

121.3
19.3
2.6
22.0
0.0
3.5
17.3
0.1
(21.3)
142.8
(19.0)
(0.1)
(19.1)
(117.3)
(117.3)
(117.3)
(0.4)
6.0

76.2
20.1
2.6
22.7
0.5
(1.3)
(72.1)
(11.0)
(0.6)
14.5
(15.1)
0.1
(15.0)
(5.3)
(5.3)
(5.3)
0.4
(5.4)

49.8
20.5
2.6
23.1
0.1
3.1
14.7
1.4
4.0
96.2
(15.0)
0.0
0.1
(14.9)
(68.8)
(68.8)
(68.8)
0.1
12.6

78.8
19.0
2.6
21.6
0.1
(5.0)
10.0
9.1
0.2
114.9
(9.9)
0.0
(9.9)
(110.9)
(110.9)
(110.9)
0.0
(5.8)

86.6
17.3
2.6
20.0
1.1
0.1
2.0
(0.6)
58.7
24.1
19.5
211.4
(17.4)
0.0
(17.4)
515.0
(2.6)
6.0
(110.9)
(110.9)
(511.4)
(103.9)
(0.9)
89.2

For the Fiscal Period Ending

Long Stock Pitch and Valuation

Sources:

Capital IQ

25