Lands’ End, Inc. posted a low-single-digit increase in Gross Merchandise Value (GMV) for the fiscal first quarter when excluding divested categories that moved to licensees while also reporting a high-single-digit decline in net revenue for the period. Still, the company is maintaining its full-year guidance assuming current tariff levels but is also looking at Lon-term solutions for the Lands’ End business, including a sales of the company.

“Our first quarter performance reflects solid results on both the top and bottom lines, including continued growth in GMV and Gross margin,” stated company CEO Andrew McLean. “We successfully executed our proven customer-centric strategy through creative engagement, viral moments around Lands’ End’s iconic pocket tote, expansion of our brand through licensing, and delivering fresh, solutions-based products that resonate with our customers. Furthermore, this period marked significant progress in strengthening the resiliency of our diversified supply chain, positioning us to maintain momentum throughout fiscal 2025.”

GMV increased in the low single-digits in the fiscal first quarter ended May 2, excluding a $12.7 million impact of transitioning kids’ and footwear inventory to licensees during the fiscal 2024 first quarter. Including this impact, GMV was said to be “modestly lower” year-over-year. GMV is defined as the total order value of all Lands’ End branded merchandise sold to customers through business-to-consumer and business-to-business channels, as well as the estimated retail value of the merchandise sold through third party distribution channels.

Net revenue for the first quarter was $261.2 million, a decrease of 8.5 percent compared to $285.5 million in the fiscal 2024 first quarter. Excluding the impact of the kids’ and footwear inventory transition, net revenue decreased 4.2 percent year-over-year (y/y).

U.S. Digital Segment net revenue was $227.7 million for the first quarter, a decrease of 0.4 percent from $228.7 million in the fiscal 2024 first quarter.

U.S. E-Commerce net revenue was $170.7 million in Q1, an increase of 0.1 percent from $170.5 million in the fiscal 2024 first quarter. The quarter reportedly reflected continued strength in outerwear product offset by a slower start to seasonal swim assortment.

Outfitters net revenue was $42.9 million, an increase of 0.5 percent from $42.7 million in the fiscal 2024 first quarter.

  • The Business Uniform channel increased year-over-year primarily due to the strength in national accounts.
  • The School Uniform channel slightly decreased primarily due to the timing of customer orders compared to the prior year.

Third Party net revenue was $14.1 million, a decrease of 9.0 percent from $15.5 million in the fiscal 2024 first quarter, said to be primarily due to challenges in one marketplace.

“During the first quarter, we refined our approach on Third Party marketplaces, including the introduction of a proprietary AI tool to optimize discovery, and saw particular strength with record AOVs in Nordstrom,” the company said in its earning release.

Europe E-Commerce net revenue was $17.9 million for the first quarter, a decrease of 28.4 percent from $25.0 million during the fiscal 2024 first quarter. The company said new leadership used the quarter to relaunch as a more premium brand, eliminating lower value inventory, positioning for marketplace expansion on Next and Debenhams and laying the groundwork for a relaunch of the brand in France.

“Against the backdrop of a challenging macro-economic environment we saw growth in new customers and customer satisfaction,” Lands’ End noted.

Licensing and Retail net revenue was $15.6 million in Q1, a decrease of 50.9 percent, from $31.8 million during the fiscal 2024 first quarter. The decrease was said to be primarily driven by the impact of transitioning kids’ and footwear inventory to licensees in the fiscal 2024 first quarter and transitioning adult wholesale to a licensing partner in 2025. Licensing revenue increased over 60 percent with significant growth from existing partners and channels.

“During the quarter, we added licenses for travel accessories, men’s underwear and base layer, and women’s intimates and base layer, with launches planned in the back half of fiscal 2025,” the company added.

Profitability & Expenses
Gross profit in the first quarter was $132.7 million, a decrease of 4.5 percent from $139.0 million in the first quarter of 2024. Gross margin increased approximately 210 basis points y/y to 50.8 percent of net revenue, compared to 48.7 percent in first quarter of 2024. The gross margin improvement was said to be primarily driven by the impact of transitioning kids’ and footwear inventory to licensees in the fiscal 2024 first quarter.

“Gross margin continues as a focus for the organization in establishing Lands’ End as a premium brand across all channels and geographies,” the company highlighted.

Selling and administrative expenses decreased $3.9 million to $123.5 million, or 47.3 percent of net revenue, compared to $127.4 million, or 44.6 percent of net revenue, in the fiscal 2024 first quarter. The approximately 270 basis-point increase was said to be primarily driven by deleverage from lower revenues.

Net loss was $8.3 million, or 27 cents loss per diluted share, in Q1, compared to net loss of $6.4 million, or 20 cents loss per diluted share in the fiscal 2024 first quarter.

Adjusted net loss was $5.4 million, or 18 cents Adjusted loss per diluted share, compared to an Adjusted net loss of $6.2 million or 20 cents Adjusted loss per diluted share in the fiscal 2024 first quarter.

Adjusted EBITDA was $9.5 million in the first quarter of fiscal 2025 compared to $11.6 million in the fiscal 2024 first quarter.

First Quarter Business Highlights

  • Like-for-like Gross Merchandise Value increased low-single digits.
  • Licensing revenue increased by over 60 percent driven by growth from existing licensees.
  • Agreed on a partnership with Delta Air Lines that commences in the second quarter of fiscal 2025.

Balance Sheet and Cash Flow Highlights
Cash and cash equivalents were $18.1 million as of May 2, 2025, compared to $27.4 million as of May 3, 2024.

Inventories, net, was $262.4 million as of May 2, 2025, and $288.6 million as of May 3, 2024. The 9 percent decrease in inventory was reportedly driven by actions the company has taken to improve inventory efficiency by reducing inventory purchases and capitalizing on speed-to-market initiatives.

Net cash used in operating activities was $22.5 million for the 13 weeks ended May 2, 2025, compared to cash used in operating activities of $25.8 million for the 13 weeks ended May 3, 2024. The improvement in cash used by operating activities was driven by the year-over-year changes in working capital.

On March 28, 2025, the company amended its ABL Facility to extend its maturity and reduce the maximum borrowings from $275 million to $225 million to better match its inventory strategy. As of May 2, 2025, the company had $40.0 million of borrowings outstanding and $86.8 million of availability under its ABL Facility, compared to $40.0 million of borrowings and $133.8 million of availability as of May 3, 2024. Additionally, as of May 2, 2025, the company had $243.8 million of term loan debt outstanding compared to $256.8 million outstanding as of May 3, 2024.

During the first quarter, the company repurchased $2.8 million of the company’s common stock under its share repurchase program announced on March 15, 2024. As of May 2, 2025, additional purchases of up to $10.6 million could be made under the program through March 31, 2026.

Strategic Alternatives Process
On March 7, 2025 the company’s Board of Directors initiated a process to explore strategic alternatives, including a sale, merger or similar transaction involving the company, to maximize shareholder value. This process remains ongoing.

The company said no assurances can be given as to the outcome or timing of the Board’s process. The Company does not intend to make any further public comment regarding the process until it determines that disclosure is appropriate.

Outlook
“As the company continues to execute our strategy, we have also developed plans to mitigate tariff headwinds at current levels, and, accordingly, our outlook for fiscal 2025 remains unchanged,” commented company CFO Bernie McCracken. “This outlook assumes a baseline tariff of approximately 10 percent in all countries except China, which accounted for less than 8 percent of our product cost in 2024 and where we assume a 30 percent tariff.”

For fiscal 2025 the company continues to expect:

  • Gross Merchandise Value to deliver mid-to-high single digits percentage growth;
  • Net revenue to be between $1.33 billion and $1.45 billion;
  • Net income to be between $8.0 million and $20.0 million and diluted earnings per share between 25 cents and 64 cents;
  • Adjusted net income to be between $15.0 million and $27.0 million and Adjusted diluted earnings per share to be between 48 cents and 86 cents; and
  • Adjusted EBITDA in the range of $95.0 million to $107.0 million.

For the full-year, the company’s guidance includes approximately $25.0 million of capital expenditures.

Image courtesy Lands’ End, Inc.