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Lands’ End, the all-American, classically styled brand, showed top- and bottom-line declines last quarter, but investors were pleased with the outcome and pushed the stock price up 13 percent to $8.94 on Thursday.
The net loss for the first quarter ended May 1 was $8.3 million, or 27 cents per diluted share, which was better than expected. In the year-ago quarter, the losses totaled $6.4 million, or 20 cents.
The adjusted net loss was $5.4 million, down from $6.2 million.
Net revenues in the first quarter reached $261.2 million, a decrease of 8.5 percent compared with $285.5 million a year earlier. Excluding the impact of the kids’ and footwear inventory transition to licensees during the first quarter of fiscal 2024, net revenue decreased by 4.2 percent. Strength in outerwear was seen while there was a slower start to seasonal swimwear.
“Our first quarter performance reflects solid results on both the top and bottom lines, including continued growth in GMV and gross margin,” Andrew McLean, chief executive officer, said in a statement. “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.”
Bernie McCracken, chief financial officer, said in his statement: “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. 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.”
On March 7, the company announced it was exploring strategic alternatives, including a sale, merger or similar transaction involving the company to maximize shareholder value. The process is continuing.
For fiscal 2025, Lands’ End continues to expect net revenue to be between $1.33 billion and $1.45 billion; gross merchandise value to deliver mid-to-high-single digit percentage growth; net income between $8 million and $20 million and diluted earnings per share between 25 cents and 64 cents and adjusted income between $15 million and $27 million.
In other first-quarter details:
- U.S. e-commerce net revenue was $170.7 million, an increase of 0.1 percent.
- The Outfitters unit reported net revenue of $42.9 million, a 0.5 percent gain.
- Third-party net revenue was $14.1 million, a 9 percent decline primarily due to challenges in one marketplace. During the first quarter, a proprietary AI tool was introduced “to optimize discovery” and the brand saw strength with record average order values at Nordstrom.
- Europe e-commerce net revenue was $17.9 million, a decrease of 28.4 percent. “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 indicated.
- Licensing and retail net revenue was $15.6 million for the first quarter, a decrease of 50.9 percent, primarily due to the impact of transitioning kids’ and footwear inventory to licensees and transitioning adult wholesale to a licensing partner.
- Licensing revenue increased over 60 percent with “significant” growth from existing partners and channels. During the quarter, licenses for travel accessories, men’s underwear and base layer, and women’s intimates and base layer were added, with more launches planned in the back half of this year.
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