Good day, ladies and gentlemen and welcome to the Lands’ End Fourth Quarter and Fiscal 2018 Earnings Conference 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] As a reminder, this conference maybe recorded. I would now like to turn the conference over to Bernie McCracken, Chief Accounting Officer. You may begin.

Good morning, and thank you for joining the Lands’ End earnings call for a discussion on our fourth quarter and full year fiscal 2018 results, which we released this morning and can be found on our website landsend.com. On the call today, you will hear from Jerome Griffith, our Chief Executive Officer and President; 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. 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 our Annual Report on Form 10-K and quarterly reports on Form 10-Q. The forward-looking information that is provided by the company on 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 Generally Accepted Accounting Principles. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures can be found in 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. Fiscal 2018 marked another year of significant progress at Lands’ End as we remained focused on delivering high quality product with compelling values and executing our strategic initiatives. Our progress is clearly reflected in our performance. We have nearly doubled adjusted EBITDA over the last two years and our recent results show continued momentum. This marks our sixth consecutive quarter of adjusted EBITDA growth and the seventh straight quarter of revenue growth when adjusted for the 53-rd week. As an organization, we have leveraged our iconic American brand which was founded on the priciples of delivering great quality, uncompromising service and exceptional value to our customers. These core principles provide us with an advantage, as they distinguish us from our competitors. Combining these principles with the progress we made across our strategic initiatives and our disciplined execution, we are well positioned to achieve the long term objectives I first laid out in January 2018, which are $1.8 billion to $2 billion of revenue and one point eight to two billion dollars of revenue and high single digit EBITDA margin. Now, I will touch on our progress and next steps in each of the pillars of our strategic plan, which as a reminder, include first product, to focus on key high quality items that offer great value to our customers. Second, digital, to be digitally led and leveraged the vast data at our disposal to better serve our customers. Third, unit channel distribution, to engage our customer wherever, whenever, and however they want to shop. And fourth, business process, to build and leverage strategic competencies through improved business processes that are based on standardization and efficiency. And of course, at the center of everything we do, is our customer. Throughout…

Thank you, Jerome, and good morning. We’re very pleased with the continued progress that we’ve made in the fourth quarter and throughout 2018. For the fourth quarter, revenue decreased 1.6% to $502.3 million compared to $510.6 million in the same period last year. However, as you will recall last year includes $25.9 million from the 53rd-week. After excluding the sales from both the 53rd-week and $21.4 million from closed Sears stores, as well as normalizing for the Delta Airlines launch, revenue would have increased 9.1%. We experienced strong revenue growth throughout the quarter, but specifically during the holiday period with another record Thanksgiving selling week. Within the U.S. e-commerce business after excluding the impact of the extra week last year, sales would have increased in the low double digits. We saw solid performance across most of our categories with particular strength in outerwear, knit tops, denim and home. Within the outfitter business, sales declined entirely due to the Delta launch in the fourth quarter last year, excluding the impact of the Delta launch and the extra week last year, revenue in our outfitter business would have increased in the low single digit range, driven by strength in our national accounts. As a reminder, our initial shipping period for Delta began in the fourth quarter of 2017 and was completed in the second quarter of 2018. For 2019, we expect a reduction in revenue from the launch levels, but will have revenue driven by replacement purchases and items we've added to our product assortment. Regarding our American Airlines launch, the teams are still working through the wear testing and we continue to expect the launch in the fourth quarter this year. As a reminder, we anticipate the American Airlines launch to be approximately $40 million to $50 million dollars, the majority…

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

Great thank you very much for taking my question, and congratulations on a really strong close to the year. I wanted to ask about the incremental marketing investment that you're going to be making this year. If you could comment a little bit about where we should expect to see that in in terms of spending by channel and how that might compare to the spending you've done on marketing historically. And specifically, I'd be interested just to get a sense of what you're planning for catalog circulation as part of that?

Sure, Alex. If you look at what we expect to do towards the back part of the year, and I think a lot of the additional spend will be in the back part of the year where we have most of the traffic online. It's going to be focused around SEM with a very heavy emphasis on SEO. There’ll probably be some PPS advertising that will probably go a little bit more into social media, but we saw really big results these last two quarters by investing in search engine optimization, which resulted in high double digit increases in new customer acquisition. And as you know new customer acquisition tends to be a predictor of what your future sales are going to be. When we're looking at catalog, we've continued to downplay catalog even though catalog does bring traffic to the website. We're getting smarter and more efficient over the course of time. We've been slowly cutting down on number of pages and slowly cutting down on circ and just getting sharper with how we're managing that investment and moving more of the dollars over to digital.

Great. That's really helpful, and then just kind of extending that conversation as to how you think about the new full line retail stores that you've been opening. It sounds like they've been, been doing very well. Just if you could -- if you could give us maybe a little bit more color on how they're performing and how you think about them playing into the portfolio when you get up to 40, 50, 60 stores over time. Are these stores currently, or expected to be profitable in and of themselves, or is it more about them bringing in a halo and helping to boost your direct business in the markets where they have that presence or is it maybe a combination of both?

I've never been a fan of opening up stores just to make yourself look pretty. They need to be profitable and they are and they will be. No, I will say, when you look at stores today I don't believe that you can just look at four wall EBIT and say this makes a store good or not. I think, with the way that customers are shopping today, they want what they want where and when they want it. So our customers interact with us in the stores but they've also interacted with us online. So we're really looking at the total trading area to say what does a store actually bring to us for the customer experience in the trading area. You'll notice inside the stores, our employees carry i-pads. We have kiosks in the store, so that you can interact with us online, because based upon the size of the store there's no way that they can carry the full range of product that we offer in the store. But we don't want to penalize the customer. We want the customer to have a great shopping experience. So therefore we make the full line available to them in a different way. We're super pleased with the way that stores have been opening up and the way we're thinking to open up additional stores is where we have a large customer base that seems to be the one indicator that would tell us if you open up a store in this area it will do well. And we've been really pleased with the results that we've seen so far.

That's really helpful. Thank you very much.

Thank you. And ladies and gentlemen, this does conclude our question and answer session. Thank you for participating in today's conference. This concludes today’s program. You may all disconnect. Everyone have a great day.