The “legendary” consumer resilience in the face of inflation: the CEO of Lands’ End

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The “legendary” consumer resilience in the face of inflation: the CEO of Lands’ End


With inflation setting a new 40-year high for February, the Federal Reserve seeks to curb the price spike with the first rate hikes since 2018. In light of these inflationary pressures, Jerome Griffith, CEO of Lands’ End (LE). I believe the outlook for American consumers is optimistic.

“I think people are generally worried about inflation out there. But at the same time, you know, people are still out spending, “he told Yahoo Finance Live.” American consumer resilience is, I think, something of a legend. And depending on what’s going on in the world, yeah, things, from a demand point of view, may change slightly. But I think overall, consumers still want to see the positivity. “

Griffith joined Yahoo Finance Live to discuss fourth-quarter earnings for the company, pandemic buying trends, inflation, and the way forward in 2022 for discretionary consumer growth. On Wednesday, Lands’ End reported financial results for the fourth quarter of 2021 and the full fiscal year 2021. The American clothing and home furnishings retailer reported an increase in annual net sales of 14.7% to 1.64. billion dollars compared to 1.43 billion dollars the previous year.

Even in the face of 7.9% inflation, consumer demand remains strong, supported by record levels of e-commerce spending according to a report from Adobe (ADBE) Analytics. American consumers are expected to spend $ 1 trillion online this year, with this forecast representing a 13% increase over 2021 and following a total spend of $ 1.7 trillion since March 2020.

Griffith said demand for services such as vacations has also recovered from the lows of the pandemic. You have noticed the growth Lands’ End has seen in its travel-associated product lines.

“There’s a lot of pent-up demand out there for people to go out and do stuff,” he said. “I can tell you that in our business-to-business part of our company, we are seeing big increases in the travel industry compared to where we were a year ago. In addition, in our swimwear sector and in our athletic sector, too, we are seeing big increases. We are still seeing a huge demand for products that people will go on vacation with. “

Some experts argue that consumers are strongly positioned between inflation, geopolitical risks and general market turmoil. The personal savings rate fell to 6.4% in January, below pre-pandemic levels, suggesting Americans are tapping into the savings accumulated during the pandemic.

Increasingly concurrent with the Consumer Price Index, however, is the Producer Price Index. On Tuesday, the Bureau of Labor Statistics (BLS) reported that final demand prices rose 10% on an unadjusted basis over the past 12 months ending February, up 0.8% from the previous month.

Griffith commented on the implications of the increase in manufacturing costs on the consumer.

“We are seeing an increase in raw material costs, absolutely,” he said. “We are also seeing an increase in transportation costs, although we think it is transitory, however, we do not believe it will return to 2019 levels. So obviously there will be increases out there for consumers in product and energy prices. . But we are worried, but we hope it will start to slow down soon. “

Thomas Hum is a Yahoo Finance writer. Follow him on Twitter @thomashumTV

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