Lands' End Reports $261.2 Million Revenue and $8.3 Million Net Loss in Q1 Fiscal 2025

Lands' End, Inc. reported a net revenue of $261.2 million for the first quarter of fiscal 2025, a decline of 8.5% from $285.5 million in the same period last year. The decrease was attributed to various factors, including the transition of kids and footwear inventory to licensees, which impacted revenue by approximately $12.7 million. The U.S. Digital Segment, which includes U.S. eCommerce, Outfitters, and Third Party sales, generated $227.8 million, reflecting a slight decrease of 0.4% compared to the previous year. The company recorded a net loss of $8.3 million, or $0.27 per diluted share, compared to a net loss of $6.4 million, or $0.20 per diluted share, in the prior year.

The company's gross profit for the quarter was $132.7 million, down from $139.0 million, but the gross margin improved to 50.8%, up from 48.7% in the previous year. This improvement was primarily driven by the transition of lower-value inventory to licensees. Selling and administrative expenses decreased to $123.5 million, representing 47.3% of total net revenue, compared to 44.6% in the prior year. The company also incurred restructuring costs of $3.3 million, primarily related to severance and benefits, as it reduced approximately 6% of its corporate office positions to align with evolving business needs.

In terms of operational metrics, the U.S. eCommerce channel saw a slight increase in revenue to $170.7 million, while the Outfitters segment reported a modest increase to $42.9 million. However, the Europe eCommerce segment experienced a significant decline of 28.4% to $17.9 million, attributed to strategic changes in leadership and inventory management. The Licensing and Retail segment also faced challenges, with revenue dropping by 50.9% to $15.6 million, largely due to the transition of inventory to licensing partners.

Looking ahead, Lands' End anticipates continued challenges from macroeconomic factors such as inflation and high interest rates, which may impact consumer discretionary spending. The company plans to invest approximately $25 million in capital expenditures for strategic initiatives and infrastructure improvements. Despite the current losses, management remains focused on optimizing operations and exploring strategic alternatives to enhance shareholder value. The company expects that its cash on hand, along with cash flows from operations and access to its asset-based lending facility, will be sufficient to meet its capital requirements for at least the next 12 months.