Good day ladies and gentlemen and welcome to the Lands’ End, Third Quarter Fiscal 2017 Earnings Call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions]. I would now like to turn the call over to Mr. Bernard McCracken. Sir, you may begin.

Good morning, and thank you for joining the Lands’ End earnings call for our third quarter fiscal 2017 results, which we released this morning and can be found on our website www.landsend.com. On the call today you will hear from Jerome Griffith, our Chief Executive Officer; and Jim Gooch, our Chief Operating Officer and Chief Financial Officer. After the company’s prepared remarks, we will conduct a question-and-answer session with our covering analysts. Please also note that the information we are about to discuss includes forward-looking statements. Such statements involve risks and uncertainties. The company’s actual results could differ materially from those discussed on this call. Factors that could contribute to such differences include, but are not limited to those items noted and included in the company’s SEC filings, including in our annual report on Form 10-K and quarterly reports on Form 10-Q. The forward-looking information that is provided by the company in this call represents the company’s outlook as of today, and we do not undertake any obligation to update forward-looking statements made by us. Subsequent events and developments may cause the company’s outlook to change. During this call we will be referring to non-GAAP measures. These non-GAAP measures are not prepared in accordance with the Generally Accepted Accounting Principles. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measure is contained herein or is contained with our earnings release issued earlier today, a copy of which is posted in the Investor Relations section of our website at landsend.com. With that, I will turn the call over to Jerome Griffith.

Thank you Bernie and thank you everyone for joining us today. Overall we are very pleased to see the continued momentum in the third quarter, which illustrates the strong progress we are making on improving our business performance. For the quarter revenue grew 4.5% as compared to last year, led by our online business and adjusted EBITDA was $12.9 million compared to $1.3 million in last year’s third quarter. In addition to delivering another quarter of improved financial results, we again drove double digit growth in our buyer file, which has now increased for the third consecutive quarter across existing, lapsed and new customers. During the quarter we saw strong performance in our outerwear, bottoms, men’s knit tops, women sweaters and home category. We are also excited to see the momentum in our business continue through the Thanksgiving, and Cyber Monday period. Since I joined the company nine months ago, we’ve made significant progress as an organization. We stabilized the business after several years of contracting sales and laid the foundation for growth in years to come. Looking ahead I believe that we are uniquely positioned as a highly recognized American Heritage Brand operating in the heartland of the country, representing strong family values and offering a great value proposition. I am more optimistic than ever about the opportunity ahead of us as we fully capitalize on our Lands’ End strong heritage and leverage the excellent team that we have in place. We are committed to achieving consistent growth across the business by focusing on four main areas: Product, digital, distribution channels and business processes and infrastructure. Emphasizing our customer centric orientation, our activities within each area will be guided by our customers’ needs and preferences. First and foremost is our product. Our priority is to make our customers everyday…

Thank you, Jerome and good morning. We are very pleased with the continued progress that we made in the third quarter. We drove revenue growth and gross margin rate improvement and reduced expenses which resulted in a significant increase in profitability. For the third quarter revenue increased 4.5% to $325.5 million compared to $311.5 million last year. Our overall revenue grew 6.1% after adjusting for the Sears store closures, which accounted for approximately $5 million of revenue in the prior year. Sales in our direct segment grew 6.7% to $290.3 million, while retail sales decreased 10.8% to $35.1 million, largely resulting from the Sears closures. In terms of product, within outerwear we saw a positive response to new more robust traditional offering, specifically in fleece and lightweight down. Bottoms showed improved performance with the introduction of woman’s pencil pants and men’s Knockabout Chino and within home solid performance driven by basic Supima towels and bedding. We are also very pleased with the continued positive momentum in our buyer file as we further refine our product assortment and value proposition, optimize our marketing efforts and enhance our customer experience. These efforts drove double digit growth in our customer file with increases in both new and existing customers as well as, reactivation of lapsed customers. We continue to see improvements in both traffic and conversion. We fine-tuned our marketing spend focusing on our most effective media channels, specifically digital and our catalog. We remain committed to taking a disciplined, strategic view of our promotions utilizing a test, learn, and react approach which is driving improved promotional productivity and profitability. In addition further refinements to our catalog include focusing on key items selling and enhanced product presentation, as well as improve predictive modeling around consumer buying behavior. We saw a slight decline in…

Thank you. [Operator Instructions] Our first question comes from the line of Alex Fuhrman of Craig-Hallum Group. Your line is now open.

Hey, thank you for taking my question and congratulations on a really nice third quarter. You know I wanted to ask about the retail business and if I’m doing the math right here, it sounds like you know there is a number of your stores that you’re going to be looking to close here in the spring and then sign a bunch of 12 year leases perhaps on the reminder if I’m thinking about this correctly, I believe that would mean that substantially you know all or most of your leases would then come due you know next, the following year in the spring in 2019. What would your plans be at that point or are you still looking to see maybe how the next year performs before you kind of have that larger decision to make in the spring of 2019.

Well, a couple of things Alex. I think you meant to say 12 month leases instead of 12 year leases.

Yeah I meant to say that.

Yes. All of the leases as we said come due in the next 26 months. The majority of them come through every January. So we have a trench this January, a trench next January and then the remaining the following January and so we’ll go through a similar process that we went through this year. You know we’ll take a look at them, look at the profitability, look to what our top line sales are, look at the customer retention, have conversations with Sears about what our go forward is and we’ll be able to make the decision store by store at that point. With this group as we said, we decided to keep 35 of them for 12 more months. We were able to negotiate favorable terms, not only on the lease term, but also on the rent and then the remaining ‘14 that we either felt wouldn’t be profitable or we weren’t able to reach appropriate terms, we decided to close. So I’d anticipate a similar process over the next 26 months.

Okay, and I guess what I’m getting at is I imagine you know all the stores when you’re talking about profitability here, you’re talking about on a four wall basis…

Four wall, yes.

And I’d love to just try to get a better sense of understanding. You know how much fixed expense is there with the retail business that’s at stake you know as you look into 2019. I mean are we talking – just trying to get a better senses of you know how much of that fixed expense could be trimmed as you reduce the number of stores versus you know how much is just that kind of baseline that as long as you have any stores there’s going to be that certain component of expense?

It’s not a tremendously fixed intensive business. It’s a combination just like any retailer would be. You have a significant amount of store expenses that’s more variable related to each store, but then you do have a fixed component that relates to the management of that business and so a lot of that will come in a step function too if we ended up closing a significant amount of them. We’d look to take out a portion of those if those fixed expenses – for instance if you close all those stores out of one district, you’ll be able to eliminate any expenses related to that district. So we’re looking at that as we manage through these next 26 months and I think you’ll see us manage it appropriately.

Okay, that’s helpful. Thanks. And then looking into Q4, I mean it sounds like Thanksgiving weekend was very strong for the company. Can you give us a sense of how your more seasonal cold weather items have performed so far and as you look to the month of December how your inventory sits and if you’re expecting seasonal to be a major component or more or less than last year for December.

The seasonal product actually performed relatively well, even as we started off into fall, even though it’s not really a cold fall. You now outerwear was performing pretty well, cold weather accessories has performed well, flannel shirts have been phenomenal, turtlenecks have been phenomenal, sweaters have been very good. So we’re pretty pleased with the selling that we have seen to-date. I think in some cases, you know as you can see in our inventory, the inventory is getting quiet clean. We are looking quite good from an investment standpoint on product; we’re feeling about the transition into spring coming up. Having said that, you know we’re not even half way through quarter four yet. We still got a long way to go, there’s still Christmas business to do and then we have the launch of Delta in January and there’ll be you know some stuff that will go out the door in January and a lot that will go out going into quarter one of next year as well. Since this is our biggest launch you know we feel like quarter four has started off well, but we’ll see how it performs throughout the rest of the season. But as far as you know cold weather gear is concerned, we feel great. You know the product looks good, it sold really well and this morning it was like 19 degrees when I woke up here. I think it’s going to get cold on the east coast, so it’s all looking good.

That’s very helpful. Thank you very much.

Thank you and I am showing no further questions at this time. Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program and you may all disconnect. Everyone, have a great day.