Lands' End Q1 2026 Earnings Call Transcript

Quartr
Provided by Quartr
June 5, 2025
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Operator

Good day, everyone, and welcome to the Lands' End First Quarter twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. Later, you will have the opportunity to ask questions during the question and answer session. Please note this call may be recorded. I'll be standing by if you should need any assistance.

Operator

It is now my pleasure to turn the program over to Tom Altholz.

Tom Altholz
Tom Altholz
Senior Director Financial Planning and Analysis & International eCommerce at Lands' End

Good morning, and thank you for joining the Lands' End earnings call for a discussion of our first quarter twenty twenty five results, which we released this morning and can be found on our website, landsen.com. I'm Tom Altos, Lands' End's Senior Director of Financial Planning and Analysis, and I'm pleased to join you today with Andrew McClain, our Chief Executive Officer and Bernie McCracken, our Chief Financial Officer. After the prepared remarks, we will conduct a question and answer session. Please also note that the information we're about to discuss includes forward looking statements. Such statements involve risks and uncertainties.

Tom Altholz
Tom Altholz
Senior Director Financial Planning and Analysis & International eCommerce at Lands' End

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 ks 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.

Tom Altholz
Tom Altholz
Senior Director Financial Planning and Analysis & International eCommerce at Lands' End

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 Andrew.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

Thank you, Tom. Good morning, and thank you for joining us today. We continue to execute our proven customer centric strategy through creative engagement, viral moments centered around to reimagining of our iconic tote, expansion of our brand through licensing and, of course, fresh solutions based product. In addition, the period was characterized by improvement in the resiliency of our supply chain to maintain our momentum throughout fiscal twenty twenty five. Most pleasing was the continued performance at the top and bottom of our P and L with growth in GMV, which was low single digits positive when adjusted for prior year inventory sell off and a 12% improvement in our adjusted bottom line as we continue to flow through higher levels of incremental profitability, all accomplished on a faster inventory turn and with improved working capital.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

As always, our focus remains on building our brand, maintaining discipline around promotional activity and staying the course to develop a healthier long term brand. This resulted in a record gross margin rate for the quarter, with our margin rate just shy of fifty one percent and two ten basis points greater than last year. These are strong foundations upon which to build. We intentionally drove significant change in our supply chain as we accelerated production in the Western Hemisphere, giving us both speed and additional avenues to mitigate tariffs and provide resiliency. Less than 8% of our purchase order dollars last fiscal year were utilized on buys out of China, while our supply of key franchises, including our sector leading American grown Supima, are now co sourced across the globe.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

By intentionally creating a diverse sourcing network and strong relationships with excellent vendors, we are increasingly positioned to remain agile in our sourcing decisions, helping to address headwinds from the impact of tariffs. Innovation is the key to our successful brand building. As I touched on last quarter, we're leveraging digital and experiential marketing strategies that build our cultural relevancy, drive traffic to our owned channels and translate to new customer conversion. We recently launched our Tote Girl Summer campaign, which features brand fans and influencers on social media and a series of pop up shops across iconic summertime locations. The campaign introduces lovers of our iconic canvas pocket tote to a wider assortment of Lands End apparel and swim products that fit their lifestyle as perfectly as our pocket tote.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

We kicked off Memorial Day weekend with pop up shops throughout the Hamptons, Jersey Shore, Charleston and Nashville, and we'll host further coastal pop ups, including the Nantucket Hotel in June, July and August. These viral moments covered extensively on TikTok and Instagram saw these one of a kind totes changing hands after purchase. As a reminder, our Pocket Tote remains our number one item in driving new customer acquisition and consistently attracts customers from all age ranges, notably driving brand awareness with a younger Gen Z and millennial cohort. We also improved our customer experience in the first quarter through our focus on offering greater personalization, including the launch of a new AI driven recommendation and outfitting engine that makes it easier for customers to personalize products. In addition, we improved our SMS marketing program capabilities, generating nearly 400,000 new subscribers in Q1.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

Picking up on our customer, our willingness to protect the brand continued to yield results with growth in new customers supplemented by increases in one to 2x buyers and our highest LTV, 5x buyers. Renewing our customer file, reaching a broader base of consumers and leveraging our franchise products like Swim and Supima remain priorities as we build long term shareholder value. Turning to product. With a late Easter and colder weather pushing swim selling back, our WonderWait and Squall outerwear franchises were key winners for us in the quarter as were our wear now items like our Any Weather fleece and barn coats. Women's bottoms, knits, sweaters and dresses also performed successfully.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

Once the swim season kicked into gear, we saw good engagement with our core franchises. Tugless, a forty year plus stalwart of the category, has expanded exponentially, building on the original one piece silhouette to offer two piece cross body dresses, rompers and backless in a range of colors and prints. This continued focus on winning with market leading franchises is a core brand platform that we are extending across channels and licenses to broaden distribution and create long term shareholder value. Turning to the performance of our various businesses, beginning with our asset light B2C activities. Our asset light licensing business had a strong first quarter and continues as a significant vehicle for growth of the Lands' End brand, with revenues up over 60% year on year.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

Within the channels, we saw success in both the clubs and traditional department stores as the brand continues to reach new customers and offers incredible price and value. During the quarter, we completed the negotiation of additional licenses for travel accessories, men's underwear and base layer and women's intimates. Our activity continues into the second quarter as we recently executed licenses for hosiery and cold weather accessories. The skill sets that the company is developing around the licensing of its IP and its integration of a leading channel and category experts to augment its core competencies in e commerce continues to set it apart from competitors and offers Lands' End strategic options for significant future growth. Turning to our B2B Outfitters business.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

I am pleased to note that B2B delivered our revenue and profit objectives for the quarter. We saw strong performance across our Enterprise business as well as growth in our school uniform business. We're pleased to launch a partnership with Delta Airlines in the second quarter to serve as their uniform provider through the end of twenty twenty seven. We're excited to be working with Delta again as we finalize the details of our collaboration together. Our school uniform business saw strong new customer growth in the quarter with commitments in annualized new business of $13,000,000 driven from a focus on leveraging our strength as a sector leader to drive outreach across the country and supplemented by our competitor exiting the segment.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

As previously noted, we have the most domestic embroidery capabilities of any retailer in The United States. We are continuing to win by leveraging the strength of our brand, our steadfast focus on quality, our market leading embroidery and personalization capabilities and our great customer service. Looking at our B2C business. Domestically, we sharpened the customer proposition between Landsend.com and our third party marketplaces using a proprietary AI tool to maximize rankings through application of product titles and descriptions. This has created significant growth across our Amazon, Macy's and Nordstrom's marketplaces.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

For example, on Amazon, we obsess on ranking by focusing our efforts on our top 25 items, product page optimization, Prime eligibility and in stock availability. By leading with these top performers, we can create algorithm maximizing product titles and descriptions that drive search rankings, complemented with solutions driven imagery. We can achieve better margins, maintain efficient inventory levels and turn faster. With new leadership, Europe began to show green shoots of progress to become the highly solutions oriented, highly engaged, elevated brand that we know that is capable of being. During the quarter, we relaunched both the German and U.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

K. Websites, taking a different marketing and assortment approach to each, supported by specific and local influencer talent. That work continued into marketplaces where we launched on nexx.com, our first true marketplace experience in Europe. This work to develop nuanced customer focused touch base continues apace. In May, we relaunched a French catalog as a prelude to a full relaunch of a French language website next month.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

In June, we will begin selling on debanums.com, again, creating a path to specific customer with a specific experience. I'll now turn it over to Bernie to discuss our first quarter performance in more detail.

Bernard Mccracken
Bernard Mccracken
CFO at Lands' End

Thank you, Andrew. For the first quarter, total revenue performance came in at two sixty one million dollars a decrease of 9% compared to last year. When excluding the impact of transitioning the kids and footwear inventory to license keys in the first quarter twenty twenty four, total revenue decreased by 4% year over year. GMV decreased low single digits for the first quarter of twenty twenty five, primarily driven by timing of orders. When excluding the impact of transitioning the kids and footwear inventory to licensees in the first quarter of twenty twenty four, GMV increased by low single digits year over year.

Bernard Mccracken
Bernard Mccracken
CFO at Lands' End

We delivered adjusted EBITDA of $10,000,000 in the first quarter, which came within our guidance. Gross profit decreased by 5% compared to last year. Gross margin was 51%, an approximately two ten basis point increase from the first quarter of twenty twenty four. The margin increase was driven by the impact of transitioning kids and footwear inventory to licensees in the first quarter of fiscal twenty twenty four. Our U.

Bernard Mccracken
Bernard Mccracken
CFO at Lands' End

S. E commerce business saw approximately flat sales and gross profit compared to the first quarter of twenty twenty four due to the continued strength in our outerwear product offset by a slow start to seasonal swim assortment. Sales from Lands' End Outfitters increased 1% from the first quarter of twenty twenty four. Sales from the Business Uniform channel were slightly up year over year and sales from our School Uniform channel were slightly down year over year driven by timing of customer orders. In our third party marketplace business, gross profit dollars decreased by 11% compared to the first quarter of twenty twenty four, as revenue decreased by 9% year over year.

Bernard Mccracken
Bernard Mccracken
CFO at Lands' End

While performance was consistently positive in most marketplaces, the combined third party business was negatively impacted by challenges in one marketplace. Overall marketplaces saw marked improvement in April. Our European e commerce business sales decreased 28% year over year as new leadership used the quarter to relaunch as a more premium brand, eliminating lower value inventory and positioning for marketplace expansion. Revenues from our licensing business increased by over 60% compared to the prior year. Licensing and our presence across our third party marketplace partners continue to help the business diversify and reduce risk from any one individual partner. SG and A expenses decreased by $4,000,000 year over year, driven by strong cost controls across the entire business. As a percentage of sales, SG and A was 47%, which was an increase of approximately two seventy basis points compared 2024, primarily driven by deleverage from lower revenues.

Bernard Mccracken
Bernard Mccracken
CFO at Lands' End

For the first quarter, we had a net loss of $8,300,000 or $0.27 per share. We had an adjusted net loss of $5,400,000 or $0.18 per share, which were both within our guidance range. Moving to our balance sheet. Inventories at the end of the first quarter were $262,000,000 compared to $289,000,000 a year ago. The 9% decrease in our inventory position resulted from our supply chain team's ongoing efforts to drive efficiencies and maintain resiliency and diversification with respect In terms of our debt, at the end of the first quarter, our term loan balance was $244,000,000 and our ABL had $40,000,000 of borrowings outstanding, which was flat to the first quarter last year.

Bernard Mccracken
Bernard Mccracken
CFO at Lands' End

During the first quarter, we repurchased $3,000,000 worth of shares under our $25,000,000 share repurchase authorization announced in March of last year, bringing the balance of the remaining authorization to $11,000,000 as of the end of the quarter. Now moving to guidance. For the full year, our guidance includes the impact of tariffs at 30% for China and approximately 10 for the rest of the world. We are implementing mitigation measures to effectively manage the tariff headwinds at these levels, and accordingly, our annual guidance remains unchanged as we continue to expect net revenue to be between 1,330,000,000.00 to $1,450,000,000 while GMV is expected to be mid- to high single digit growth. Adjusted net income of $15,000,000,000 to $27,000,000 and adjusted diluted earnings per share of $0.48 to $0.86 and our adjusted EBITDA to be in the range of $95,000,000 to $107,000,000 Our guidance for the full incorporates approximately $25,000,000 in capital expenditures.

Bernard Mccracken
Bernard Mccracken
CFO at Lands' End

With that, I will turn the call back over to Andrew.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

Thank you, Bernie. As always, I want to thank all of the Lands' End employees dedication to building the brand and upholding our customer centric strategy. Our commitment to delivering exceptional quality service and care to our customers is what continues to set us apart and help sustain our momentum. Finally, the process our Board of Directors initiated last quarter to explore strategic alternatives, including a sale, merger or similar transaction involving the company to maximize shareholder value remains ongoing. We will not be commenting further on it at this time, and we will provide an update once appropriate. With that, we look forward to your questions.

Operator

We'll take our first question from Dana Telsey of Telsey Group. Your line is open.

Dana Telsey
CEO and Chief Research Officer at Telsey Advisory Group

Good morning. Good morning, everyone, and nice to see the progress. Couple of questions. Typically, you provide second the upcoming quarter guidance. I didn't see anything, I think, in the release this time.

Dana Telsey
CEO and Chief Research Officer at Telsey Advisory Group

Any color you can give us on the complexion of the year and the cadence of what you're looking for? And within that tariff impacts holistically, how are you thinking about it both in terms of pricing and on inventory? And I have one follow-up. Thank you.

Bernard Mccracken
Bernard Mccracken
CFO at Lands' End

Good morning, Dana. As far as guidance goes, based on the near term uncertainty with tariff rates, the company has provided annual guidance based on the current tariff rates, which we've talked about, which is the 10% baseline and the 30% for China, which comes to about an effective 12% rate for us in the back half. And that we put a lot of work into a transformation process to build mitigation efforts against that against those raised tariffs and feel strongly that we have the right mitigations to get to offset those for the year.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

Dana, just a bit of color on your tariff impacts question. I mean, you know me, you know the company. It's like we're not going to sit around and wait for a solve later in the year. We rolled up our sleeves actually towards the end of Q4 and started shifting heavily into Western Hemisphere. So we were taking big programs, not the small programs.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

We took Supima, which is one of our biggest programs. In fact, it is our biggest program, and we moved that to Western Hemisphere, actually in process of co sourcing that in Eastern Hemisphere as well so that we've got a lot of pacing to go after it, to move with it and to be able to react to it. And so we're taking the pain of all those ships way up front.

Dana Telsey
CEO and Chief Research Officer at Telsey Advisory Group

Got it. And then congratulations on the new Delta agreement. That's very encouraging. How is it different than the last agreement that you have had or is it? And then on the Marketplaces business, what are you seeing there?

Dana Telsey
CEO and Chief Research Officer at Telsey Advisory Group

And it was encouraging to hear about Europe. What are your thoughts on the goals for Europe? Thank you.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

Fair enough. Do you want to take Delta?

Bernard Mccracken
Bernard Mccracken
CFO at Lands' End

Sure. The Delta arrangement is a 2.5 completion of a contract they signed with another vendor that we will complete that, and we're in discussions on what the future of that will be beyond that.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

Yes. In terms of marketplaces, we feel really good about marketplaces. Nordstrom continues to be the fastest growth marketplace for us. And actually, it's really driven off the back of a very high AOV.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

It's the highest AOVs we've ever recorded as we just see a very premium customer come to the brand. So we're excited about that. Amazon has continued to grow for us along with Macy's. And we saw progress on Target as well that we were happy with. I believe your question probably has some Kohl's embedded in it, and I do want to address that.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

We did have a tough quarter with coals, but I actually feel very optimistic about it and the trends that we're seeing out of the business. We had a reset with coals and feel good about the direction we're seeing there and the selling we're getting, which is driven by actually also an increase in AOV. So in terms of marketplaces in general, we feel very positive. Europe, I couldn't be more excited about. I actually think the opportunity for Landsat internationally is amazing.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

We just used the opportunity of the challenges we had late last year to really lean in and say, we want to create a halo for The U. S. Brand. So it's like we should be continually evolving this brand upwards, and it's like Europe is a great place to pick up on that cachet. And we start to do a lot of work around customer segmentation as much as anything.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

And we found that we can reach a customer from Debenham to NeXT to The U. K. To Germany. But also, we're looking at how we're really going to lean in to France now. We see that as a very fashion forward market.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

We've always had sales to France, but we see that as a significant opportunity for us. And we see more market expansion coming off the back of that. So we're actually way more bullish on it than we necessarily were even three months ago.

Operator

We'll take our next question from Marni Shapiro of Retail Tracking. Your line is open.

Marni Shapiro
Managing Partner at The Retail Tracker

Hey, guys. Congratulations on the improvements. Could you talk a little bit about obviously, swim was a highlight in the quarter. I'm curious about some of your other segments, key segments like towels and things like that that you guys have focused on. And could you also just talk a little bit about the changes happening here?

Marni Shapiro
Managing Partner at The Retail Tracker

Site has been outstanding, really much more modern storytelling. It feels more youthful. I guess, could you talk about what's happening behind the scenes? Even your fashion is really on trend, but not trendy. And could you kind of roll out what we could expect to see, especially with some big seasons coming up ahead with back to school and then winter with your outerwear business?

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

Right. Oh, Dan, Marni. Marni, you can just keep questions forever. It's great. I think that we wanted to be curious with us.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

We're the number one online brand for women 40. And we felt we had the right actually and the opportunity to move the market. And I think we built a team from design to merchandising to tech design to sourcing that could really start to react to that. And we gave them the opportunity to be curious with the franchises. So you take Tugless.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

And Tugless, I think everybody who knows Tugless thinks about it as it does exactly what it says on the tin, but it always comes in black and it always comes in the same silhouette. And we just felt that there was such an opportunity to reach a wider consumer. And we just started to get curious about what we were seeing around the world. And leveraging the comments that I was just making to Dana about Europe, we see so much trend coming out of places like France. And it's like there's no reason that, one, we shouldn't be servicing that.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

But there's another, which is that we should be starting to channel that. And so as we looked at turning tugless into swim dresses, it's like taking the back out of tugless, taking making it into a two piece and actually hitting some of the real trends about having a romper tugless. It's been really powerful. And what we see is you heard the numbers about how our customer is responding. It's really our existing customer responds to the existing product, but we have a whole new customer responding to the new product.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

And we are really excited about the dynamics of the customer we're seeing coming into the brand. It's like they're less age oriented and they're more oriented towards the fit and style and aesthetic of Lands' End. And that's a handwriting that we're trying to develop across the business. And I've got Kim and Matt and team, that's on the creative side of the business, really leaning in and challenging us every day to think about a different customer, a different consumer and how we're going to consistently reach them. And so we're not going to compromise on that.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

We see an opportunity to remake the brand. Towels, I'm going to talk about towels and totes. If you put a towel in the you can put a towel in the totes. And I think that I think what we've done is we've taken the tote, and we've opened it up to I mean, we have Gen A, let alone Gen Z coming in and grabbing at the totes. It's our one acquisition vehicle for new customers.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

You saw the work that we did with the collabs over Memorial Day. We're selling back to that because the toe opens you up to sell the swim, to sell the towel, to sell the swim dress. I think that's been incredibly powerful for us. The site, thank you for the site. We've done a lot with the site.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

We think we can do more with the site. And what we're trying to do is open up the various channels to find different shoppers. So I talked about being on nex.com or I talked about being on nordstrom.com. And I think that we find different customers there. I would point you to some of the work we're doing in Europe.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

You should take a look at landsend.co.uk and the .de site as well to get some perspective of how we're not even so much regionalizing, but personalizing to those markets is becoming key to us because I've always believed it's about the individual customer and the experience they're having. And the more we can personalize that, the better. Fashion and trend that's coming up, we drop our June catalog next week. I'm really curious to see what you think about it, and I'd love to talk to you about it. I'm going to leave it at that.

Marni Shapiro
Managing Partner at The Retail Tracker

By the way, just popped on to The U. K. Site and it's so different. It feels like a European site, not an American site, which is a good thing. Can I just ask you one quick follow-up?

Marni Shapiro
Managing Partner at The Retail Tracker

You're getting a lot of new people in on totes. Are you able to transition them into other products? And I guess, where do they move from totes? Like where is the next place? Do they go to towels?

Marni Shapiro
Managing Partner at The Retail Tracker

Or is it swim? Or is it dresses? I'm curious like what the path looks like for that customer.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

The big yes, it's a great question. We talk about this a lot. The big pivot point, it covers swim and dresses. So they go to swim dresses. So if you look at our swim dresses, a lot of women pick up our swim dresses, and they wear the most regular dresses.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

That whole trend that's out there right now of beach to bar, pool to dinner is really calling for having the ability to not have to go to your room and change. And I what we are seeing is a real growth in that swim dress trend. And actually, dresses outperformed regular dress. Now I don't want to do regular dresses at the service. They continue to be strong, and we've seen some really strong trends in there.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

But where the customer goes, where we're seeing a lot of action is on that swim dress. And it's so of a moment, and I think it's a franchise we can further build on going into the going into particularly next year.

Marni Shapiro
Managing Partner at The Retail Tracker

Fantastic. Thank you so much. Best of luck for summer.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

Thank you.

Operator

We'll take our next question from Eric Beder of SCC Research. Your line is open.

Eric Beder
CEO & Senior Research Analyst at Small Cap Consumer Research, LLC

Good morning. I want to talk a little bit about licensing here. Part of the kind of doing the apples to apples pieces that you licensing this year are somewhat of a replacement for categories you already have. Are we now entering the part where licensing where we're seeing incremental categories that will start to add to the total revenue because they're not really replacing something that's already out there? And I guess I'd love to get an update on how you are happy on how you feel about the footwear and the kids licenses in terms of helping drive business both online and with your partners.

Bernard Mccracken
Bernard Mccracken
CFO at Lands' End

Hey, Eric. Good to have you on. I'll start with just the strategy side of it, and I'll let Andrew move to the feelings about the current categories. You are correct in that, as you noticed, that we added a few new licenses in our announcement today that were repeats from Q4 that we have signed. And those are white space, so those will be purely incremental and start to build the brand and get us to additional channels that we're very excited about.

Bernard Mccracken
Bernard Mccracken
CFO at Lands' End

And as you'll realize that licensing just started in Q1 last year. So each quarter, we'll be building the historical license that we signed. They'll continue to grow quarter to quarter. Andrew, you want to talk about footwear and Yes.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

Mean the other color in there, Eric, is the reach that we get by being in other channels. Being in the clubs and being in wholesale is absolutely huge for us. And I don't want to diminish the opportunity there of how far we can go. And I think the adjunct to that coming out of the conversation we just had about Europe is that this opens us up globally as well to significant opportunity to push the brand into new markets. So on top of everything Bernie said, I just want to make sure that, that's not getting lost in the midst of it.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

Specific to Kids and Shoes, Kids came out of the gate strong. We've been really happy with the transition we made. And Kids was an emotional one for Lands' End because it's always been in the Kids business. And inside a vertical retailer, that's something that almost every one of my employees wanted to hang on to. And I felt that we needed to concentrate on our best set because we're not a 10,000,000,000 company, not yet, give us a couple of years.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

So it was who do you lead in and work with? And so we found the best what we believe for the best partner out there. And they've done a great job. We see tremendous sales on our own website from kids, and it's not just discounted sales or it's not just add on sales. It's customers coming and buying at or near full price, and they're specifically buying for kids.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

And what a great adjunct that is for our school uniform business, which we're seeing a lot of growth from as well, where we like to put the two side by side and it's like you've got like good symbiosis of I want to put a plug in for Backpack Day, which is coming up. That's going to be huge for us. And again, it's something we work with our partner on. And their ability to actually increase the penetration of Lands' End Kids out into the other channels and to a wider population, again, I just can't diminish that. That is extremely powerful for us.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

Shoes is going to be slower. It's the newness works really well for us. I think we were slow because we tried to reinvent sorry, we tried to go with what the original shoes were. I was going say silhouettes, but that doesn't work for shoes. We really took the original assortment and we kept that.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

We've turned that on its head now. We've started to go to much more newness and we've been more aggressive about that. And so we're seeing a lot we're seeing that work a lot. And it works back to swim. So I'll pick up on Marni's question, which is, again, we'll see her wear the slides.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

She's going to wear the whole uniform from the beach, the whole uniform from the pool to go to dinner. And I think that gives us a lot of hope. And we're seeing actually the club start to get interested in shoes now as well. And I like that because that puts us in front of hundreds of millions of people.

Eric Beder
CEO & Senior Research Analyst at Small Cap Consumer Research, LLC

Yes. We've been seeing that in the catalogs with the shoes becoming much more wider in terms of styles and trends here going forward. In terms of B2B, two new you have the Delta contract coming up. Could you remind us historically how these kind of contracts launch? If I remember correctly, there's a big bump initially and then they have a nice flow afterwards. And what should we be thinking about in terms of back to school? I know that the competitor disappeared. When did you think that's going to be fully manifested and we're going to see that in terms of the flow here this year also?

Bernard Mccracken
Bernard Mccracken
CFO at Lands' End

Yes. Eric, as far as Delta goes, it isn't necessarily the beginning or end of a contract that there's large flows. It's when they decide to launch a new product line. Our current agreement with Delta does not have a near term new launch of product. They're working on that themselves.

Bernard Mccracken
Bernard Mccracken
CFO at Lands' End

So this will be just the normal run rate that we experienced with them historically.

Eric Beder
CEO & Senior Research Analyst at Small Cap Consumer Research, LLC

Okay. In terms of back to school And then school uniforms,

Bernard Mccracken
Bernard Mccracken
CFO at Lands' End

We're excited about the volume that we added. Andrew noted in his comments that there's $13,000,000 of new customer schools that we have added over the last six months as one of our competitors exited the industry. So we are back to school tends to start in June for us and then play out through September. So we're excited for the effects on Q2 of that new added business. One of

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

the things that we like about this year, that's just worth noting because I know there's a lot of implications for all back to schools, is we're seeing back to school line up very closely with twenty twenty four's back to school. So it should be relatively calm is the way we're viewing it.

Eric Beder
CEO & Senior Research Analyst at Small Cap Consumer Research, LLC

Okay. And last question. You mentioned in your release about SWIM. Do you look and I agree that the product has materially improved. Do you believe that's just because in some ways the timing of the weather in some of the pieces? I know it's been colder year over year in certain areas. How should we be thinking about that?

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

No, Eric. We improved it ourselves. I keep telling you this. It's just like we make great product, and it's connecting with the customer.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

So that continues to be big for us. Now I'm being slightly facetious. It definitely was a chilled start. It was cold and wet, and it was interesting that for the first month of the quarter, we were actually outselling swim with outerwear, which has never happened to us before. So we saw that business pick up and get on its trend.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

I think we'll continue to see it get on its trend. And our view is that with the product that we've got and the reach that it's getting, there is opportunity for us. But I do want to put in a plug for Lands' End teams who've really worked hard to put this collection together. I think it's a splendid collection.

Eric Beder
CEO & Senior Research Analyst at Small Cap Consumer Research, LLC

Great. Good luck for the rest of the year.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

Thanks, Eric.

Operator

And we'll move next to Steve Silver of Argus Research. Your line is open.

Steve Silver
Senior Equity Research Analyst at Argus Research

Thanks, operator, and thanks for taking my questions. My first question is really about the outfitters business in general, particularly on the enterprise side. Just curious as to whether there's been any implied hesitancy across the pipeline for outfeeders given all the macroeconomic noise that we're dealing with every day. Just curious as to whether it's really business as usual in terms of enterprise prospects moving forward with these kind of discussions? Or if any companies that you're talking to are getting a little bit more in like a wait and see mode given everything that's going on in the macro environment?

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

The answer is a little surprisingly, no. So we went through the cycles with everyone else, yourself included, which was, oh, there's going to be a bump because everyone's going to pull forward to get ahead of tariffs. And then there's going to be a dip because everyone's got ahead of tariffs, and then there's going to be a slowdown. And we saw none of that. We saw very consistent business.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

And I think that's a testament to how our teams engage with the market. I think it's also a testament to strength in the enterprise businesses out there, that we're continuing to see that consistency from them. So right now, today, I feel pretty good about that business. And it's showing consistent strength that, again, like you, I probably wasn't necessarily expecting was going to come through.

Steve Silver
Senior Equity Research Analyst at Argus Research

Great. And one more, if I may. You mentioned in your prepared remarks about increasing the customer file through SMS subscriptions and the like. Curious as to how that maybe compares just in context to previous campaigns where the customer file was expanded and just in terms of maybe how many of those new subscribers showed stickiness and not unsubscribing once they've taken advantage of the product that brought them into the system in the first place? Just trying to get some context in terms of the stickiness of some of these new customer adds.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

Yes. The number we called out that's a great question actually. The number we called out, I think you would key on in the script, is that one to 2x customer because that's exactly, I think, where you're going, and that answers that question. It's you can paid search, the very sort of traditional method, will get you that one customer. But where you really get them in is making them a 2x customer, and we saw significant growth in that.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

And I think that's a testament to how we've chosen to market and the brand that we're choosing to market, which is we're not trying to sell so much on discounting. We're trying to stand behind the quality of our product, the fashion of our product and the experience that you have coming to Land's End. And we were really excited to see the 1x customer become a 2x customer at the rate they did and help build our LTV relative to the cost of acquisition. I think there's a sort of subpart to this question, which is worth covering, which is we're doing less paid search than we were, and we're doing more in channels where I think we can have expression of the brand. So for example, in social, we do a lot on Insta now.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

It's not out of the question that we'll ourselves be on TikTok. We are certainly on TikTok through our influencers. And I think it's about reaching customers more individually or through cohorts that they follow. I mean, I think the whole Park collab that we do and we continue to collab with Park has been really powerful for us in reaching a whole new customer. So I hope that answers your question.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

I think the other thing I'd throw in there actually is we're starting to look more and more about using AI agents So we see a lot of search now, whether you're on Safari or whether you're in Google, you're getting an answer offered to you from an AI agent. So more of our marketing is starting to go against that. And while it's a very small base, it has tremendous growth associated with that, and we see that as the sky is the limit as we use and deploy more AI based tools in the business.

Steve Silver
Senior Equity Research Analyst at Argus Research

Great. I appreciate all the color.

Andrew McLean
Andrew McLean
CEO & Director at Lands' End

Thanks Steve.

Steve Silver
Senior Equity Research Analyst at Argus Research

See you.

Operator

And this does conclude our question and answer session as well as the Lands' End first quarter twenty twenty five earnings call. You may now disconnect your lines. And everyone, have a great day.

Executives
    • Tom Altholz
      Tom Altholz
      Senior Director Financial Planning and Analysis & International eCommerce
    • Andrew McLean
      Andrew McLean
      CEO & Director
    • Bernard Mccracken
      Bernard Mccracken
      CFO
Analysts
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Key Takeaways

  • Lands’ End reported Q1 revenue of $261 million, down 9% year-over-year (4% decline on a comparable basis), and GMV declined in the low single digits due to timing of orders.
  • Adjusted EBITDA reached $10 million and adjusted net loss narrowed to $5.4 million (−$0.18 per share), marking a 12% improvement in the bottom line.
  • The company achieved a record gross margin rate of 51%, up 210 basis points year-over-year, driven by disciplined promotional activity and supply-chain diversification.
  • Licensing revenue surged over 60% year-over-year, with new agreements in travel accessories, men’s underwear, women’s intimates, hosiery, and cold-weather accessories broadening brand reach.
  • Lands’ End’s board continues to explore strategic alternatives, including a sale or merger, to maximize shareholder value, with no further updates provided at this time.
AI Generated. May Contain Errors.
Earnings Conference Call
Lands' End Q1 2026
00:00 / 00:00

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