Good morning, ladies and gentlemen and welcome to the Lands’ End Fourth Quarter and Fiscal 2015 Conference Call. At this time, all participants are in a listen-only mode. Later, we will have 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 your host for today’s conference Mr. Bernie McCracken, Chief Accounting Officer. Sir, you may begin.

Good morning and thank you for attending the Land’s End earnings call for our fourth quarter and fiscal 2015 results. On the call today, you will hear from Federica Marchionni, our President and Chief Executive Officer and Jim Gooch, our Chief Operating Officer and Chief Financial Officer. To begin our prepared remarks, Federica will discuss our progress on key initiatives and then Jim will provide details on our fourth quarter and full-year performance. After the company’s prepared remarks, we will conduct a question-and-answer session with our covering analysts. Please note that this morning we released our fourth quarter and fiscal 2015 earnings results, which are now available on landsend.com. I would like to remind you that today’s discussion will contain Forward-Looking Statements related to future events and expectations. These statements are based on current expectations and the current economic environment or are based on potential opportunities. Actual results may differ materially from those expressed or implied in the forward-looking statements. Factors that could cause the company’s actual results to differ materially from those discussed are posted in the Investors Information section of landsend.com and in our most recent SEC filings. Our discussion will also include certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures also can be found in the Investor Information section of landsend.com. Any reference in our discussions today to EBITDA means adjusted EBITDA as defined in the earnings release. Lastly, we assume no obligation to update the information presented on this call except as required by law. I will now turn the call over to our Chief Executive Officer Federica Marchionni.

Thank you, Bernie. Good morning everyone and thank you for joining us today. 2015 was a year of transition for Lands’ End. As we work to create a solid foundation from which to execute our long-term vision for the brand. This began with assembling an highly talented and experienced management team in the areas of merchandising, design, supply chain and most recently operation and finance. With the addition of Jim Gooch, who join us as EVP, COO and CFO about a month ago. I want to take a moment to welcome Jim to the Lands’ End family. He has hit the ground running and I look forward to leveraging his knowledge as we move our business forward. I’m pleased with how quickly Jim and the other new member of the senior management team has integrated with our extraordinarily talented and passionate team as we continue to work towards our unified mission to deliver a timeless, high quality, honest value and work less quality service to our customers. With the senior management team are now in place, we are working together to invigorate and innovate Lands’ End. We are focused on continuing our strong engagement with our core customer while taking steps to grow the number of customer appeal and to expand global awareness for the Lands’ End brand. While I believe that we made meaningful progress in 2015, it is not reflected in our financial performance for this year. Adverse weather and foreign exchange headwinds combined with statistical highly promotional retail environment continue to negatively impact our business. Adjusted EPS was $1.26 as compared to the $2.39 in fiscal 2014. Jim will provide the detail review of our financials. While we were disappointed with the financial results, we believe that the step that we took throughout the 2015 were important…

Thank you Federica and good morning everyone. First, before I get started, I would like to say a few words about how excited I am to have joined the company. This is truly a great company, it’s an iconic brand with a strong and passionate team. And certainly I'm looking forward working with all of them to partner with all of them as we look to capitalize and the many opportunities that we have in front of us. With that, I would like to get started by walking through our financial results for the quarter. Revenue for the fourth quarter was $473.5 million that’s down 6.1% compared to $504.6 million last year and down 5.3% on a constant currency basis. This sales decline was comprised of a 5.2% decrease in the direct segment with sales of $409.1 million and 11.5% decrease in the retail segment with sales of $64.4 million. The decrease in the direct segment was due to decline in both the U.S. region and the negative impact of foreign currency on the international business. The U.S. business continued to realize negative comparable sales in many product categories and as Federica noted, the decrease is attributable to a combination of both internal and external factors. During the quarter, we saw the continuation of a highly promotional retail environment with record warm weather both of which negatively impacted our business. Especially in some of our seasonal categories. In addition, the decline in U.S. revenue reflected a planned reduction and our catalog circulation as we continue to optimize all of our marketing spending. Looking at our international business, our revenue was negatively impacted by approximately $5 million from foreign exchange fluctuation primarily in Europe. On a constant currency basis, our international revenue was essentially flat. The decline in the retail segment…

Thank you [Operator Instructions] Our first question is going to be from Mark Rosenkranz with Craig Hallum Capital. Your line is open.

Hi great thanks for taking my question and congrats on a good fourth quarter. I was just wondering if you could maybe expand a little more. You talked about delivering sequential improvement during in the second quarter. Could you give us a little bit more on kind of what areas do you expect to see an improvements and kind of what catalysts do you think we’ll have in the second quarter that will kind of drive that through the rest of the year?

Well good morning. I guess, I will start with that and maybe Federica can chime in. We’re probably not going to give any specific guidance as to the drivers, but as I have said and as I think Federica walked through with all of the initiatives, many of the initiatives that we have in place you will start to see them take hold later in the year. We’re going to continue to optimize that marketing and advertising spend and I think as we go through the quarters, we’re going to get more efficient there. And I think you will see us drive our productivity and also from a product perspective, we have limited amounts of new product in the first quarter, you’re going to see that build a little bit in the second quarter and then you will see that be more impactful in the back half.

Okay great and that makes a lot of sense. Could you maybe talk a little bit more about the improved marketing kind of what areas you can see some room for improvement there and how you are going to make that even more efficient as you go through the year?

First of all good morning everyone. We already an improvements in last year on the efficiency and the progress is to continuously improve on the productivity of our catalog. We can say that we increased the average response rate and because of that we can also adjust today the circulation in the next quarter to make sure that we really target in active customers and guessing an higher profitability from each catalog, because as you know from the marketing spend, the catalogs are the biggest spend. Of course, as we said, we also trying to improve efficiency also in our digital spend, this year in particular we want to make sure that every dollar that goes into the digital market will be target to the right consumer on the core, core as I said before is the number one priority for us. And we will do that while also acquiring new customers. And these new customers are definitely even more responding to digital marketing. So part of that spend will also be targeting the new customers. And as we said, we are improving the brand awareness not just nationally, but also internationally. So it is important to note how our advertising campaign today is much more relevant and focused. Again, there are moments where we focused more on the core and that is for example in the Q4 was the holiday campaign, we spoke to the families, to the multi-generational families and through the 2016, we will have a balance between the initiative for the core customers and the initiative for the new customer. And as I said, in few weeks we will launch a new collection dedicated to the new generation, which we consider an expansion of our current customers.

I think Mark as Federica noted is absolutely true of that. We are obviously trying to drive productivity across all of our different marketing vehicles. You see us talking more certainly about the catalogue just because that is the biggest piece. The goal is there to continue to refine our model there, continue to drive productivity. We have made some changes last year, we gave you a little bit of insight as to how we see the spending flowing this year, the first quarter of this year will be our first pass at making some changes there. I think as we get into the second and third and fourth quarter we will be making changes over prior year changes and I think we will get smarter as we go.

Okay thank you that's very helpful and then last question from me, you talked a little about how you know the non-seasonal items you can see some opportunities there. Could you just kind of talk about how you are going to handle kind of the balance between these seasonal and the non-seasonal items in the store. What kind of [promise] (ph) is needed to make the right touch there. To emphasize those products as available, but not you know overshadow the strong seasonal trends in the in a given time of the quarter.

Of course, what we saw last year was a very bad weather both for the spring and for the fall. We had no summer and we have a very warm winter and for a company like us that it’s not as exposed on trends, fashion but its exposed to seasonality, because our two biggest categories are the swim and the outerwear. I wanted to make sure that we have always something that is considered a core also for different categories. So the first things and this is one of the reasons why even in this spring summer you see more products on the apparel on the clothing for year around users. That is very key to succeed in the clothing business. This part should grow and to do that what we did was I consider streamlining the merchandizing offer that means that we eliminated this excuse that were unproductive, again efficiency is remains the key elements, the key criteria to define the strategies of both in the marketing and also in the merchandizing offer. So by eliminating that I could conclude newness both on the core and as you will see in the new collection. There are various ways of introducing non-seasonality in products and one of this and you will see through the year that my focus will be also the Activewear, because at leisure its often an area where we can grow. And this is a non-seasonality product and will help us to stay strong in moments where either we're in transition between the spring and the summer or winter. And in fact this is the moment where we think to put our focus this year and also to grow the business in this area where the weather will not influence the buying.

Thank you. Our next question is from Steve Marotta with C. L. King and Associates. Your line is open.

Good morning everybody. Just following up on that question as it pertains to the split between seasonal and non-seasonal in fiscal 2015 roughly what was that split and roughly what would you expect that split to be in fiscal 2016.

We don't give exact number on the split, but what I can to you is that of course as I mentioned, the seasonal product are the pillars of our business, but we saw a great response to also product that can be year around and because of the fact that we didn’t develop the collection. Thinking about that in the past that will be of course a journey as everything so will not change dramatically but will be introduced and you can have a sense of that by just walking through our current spring, summer collection that is on the website or is in the catalogue. So you see that there are more products that can be used again for year around and at more responsible thinking about how U.S. which is the biggest market for us, how the weather is there and 50% of the country is exposed to the warm weather year around. So we need to consider that when we create the collection. But again that will be made by always reducing the product excuse that are non-productive and introducing more productive and opportunities. So will be again a journey, so the percentage don’t expect a dramatic change, but an increase season-after-season and of course we will be flexible in understanding the data and see the customer acceptance.

Okay, thank you. Jim as it pertains to the inventory, can you delve a little deeper into the composition what the percent of aged inventory is within the particular pool of inventory currently. How you would expect the promotional cadence to look over the course, let’s say the next six to 12-months. The concern of course is that considering that inventory is up and some of it appears age that margins will remain under pressure due to high promotions in order to jettison the older inventory for what is now filing through some of the newer stuff. If you could just delineate it a little clear that would be great.

Yes absolutely, as I mentioned in my prepared remarks, we’re certainly seating on a little bit more inventory than where we plan to be, where we want to be. And I also said that I think from adjusting future receipts, we are going to be able to move back to normalized level of inventory. What I would tell you though is I’m pretty happy actually with the quality of inventory. If you look at it both from an age perspective, we’re in a better position today than what we were a year-ago. And also a little Federica mentioned or talked a little bit about the seasonal and basic mix, we have a greater percentage of basic product than where we were a year-ago. So as you think about how we’re going to move through, I don’t anticipate us needing a significant amount of mark-downs in order to move through this inventory. It will be more a matter of time and being able to adjust future receipts and based on our inventory commitments that we have out there. it’s certainly going to take us a quarter or two to move through this, but I wouldn’t anticipate significant margin pressure as a result of inventory. I think from a margin pressure if anything, you are still talking a very competitive retail environment, you are still talking a very promotional retail environment and if there is any margin pressure I see it coming more from that than I do from our current inventory position.

Okay that’s great, can you disclose what the plan was you said, it was slightly above what would you liked to have ended the year with on an increase. Can you talk a little bit about what that range may have been?

No. we’re not going to get in specifics on the plan, but the year-over-year inventory is slightly higher and I would say that the prior year inventory, if you go back and look at that was probably little also a little bit artificially lower than what a normalized inventory level would be. But really because of, if you look at our performance on a top-line sales that’s really what drove a little bit the excess inventory at the end of the year.

Okay. I have two other questions as it pertains to the promotional cadence through 2015. Can you comment - Federica you have mentioned in the past that you endeavor to make the brand messaging less promotional to the customer and to dial back heightened promotions as what has say occurred over 2014 and some of 2015, are the 2016 promotional plans right now just the plan are they fewer or similar or more than 2015?

First of all Steven, the most important thing is always to be in-line with market and that’s our lesson let’s say last year. So every time we were not in-line with what was out there in the market, we actually needed to change, because dialing back when everyone else is doing a very strong promotion then you simply just lose the top-line, but we did some tests to verify what is the best way to drive more high margins within the promotion. And so this is the first thing. We have more data and more knowledge on how to drive an higher margin in the promotion and how to do it, when to do it. So I think that it was really the year where everyone of us was sitting dealing especially in Q4 to define the best promotion to drive top-line and margins. This year, we wish not to be that promotional. No one likes that I think no company would like to be in that situation and definitely it’s not in the strategy to become more and more a trend with higher value and we will like the consumer shop at Lands’ End, not because of the promotion, but because they like what we gave to them. But as we said, the consumers are becoming more and more price conscious. So again, we want to be very flexible. What I'm doing with the launch of the new collection is also to see and to test products that cannot be and will not be promoted as we used to so far with the product offering that we have. So that would be another learning for us. You will witness this year, so the intention is definitely to improve the margins, not to be as promotional, but again as I said, stay flexible and very diligent in driving top-line.

That's helpful and just one other question. You mentioned that there were some sweaters that were tested in the holiday season and you felt that you have got some pretty good reads on them and can make better inventory decisions regarding those successful tests and I would assume the following season in the fall winter. Is it possible that the test and react model can represent a larger portion of Land's End sales in future years than it has, is this a tactic that you think you can use more aggressively and across categories.

For sure, as I'm always saying one of my pillars on the three pillars that is growth, profitability, the third is the adaptability and the more you can adapt to the market the faster you can do it, the bigger are the results. It's important to read the data and to react immediately on the data. Of course, as you know, our product lead-time is long, so we have to be able to read the data way before, but I think this is one of my skills. And I'm working with the team to make sure that we understand more the trends and the insight that we can get from a first read, but I'm a very big fan as my team also is on the test for not just the product, but on all the activities that we do so.

Steve, I would add to that too. In my comments on our incremental CapEx that we are spending this year that's a big reason why we are investing there too. We had data available at this company, but it's significant amount of homegrown systems and I think our investment in that infrastructure is not only going to allow us to get data more accurate data, but I think data that comes quicker and it's more actionable. So we can do more of these read and react tests and be more timely in the market.

That's helpful. All the best.

Thank you.

Thank you.

I’m not showing any further questions. This concludes the Q&A portion of today's call. Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. You may all disconnect. Everyone have a great day.