Lands’ End(LE) - 2020 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS (Unaudited) This section presents Lands' End, Inc.'s unaudited condensed consolidated financial statements, including statements of operations, balance sheets, cash flows, and detailed notes for the specified periods Condensed Consolidated Statements of Operations This section provides the unaudited condensed consolidated statements of operations, detailing net revenue, gross profit, operating income, and net income (loss) for the 13 and 39 weeks ended November 1, 2019, and November 2, 2018 Condensed Consolidated Statements of Operations (13 Weeks Ended) | (in thousands, except per share data) | November 1, 2019 | November 2, 2018 | | :------------------------------------ | :--------------- | :--------------- | | Net revenue | $340,023 | $341,570 | | Gross profit | $154,175 | $150,962 | | Operating income | $10,907 | $8,485 | | Income (loss) before income taxes | $4,952 | $(684) | | NET INCOME (LOSS) | $3,606 | $3,294 | | Basic EPS | $0.11 | $0.10 | | Diluted EPS | $0.11 | $0.10 | Condensed Consolidated Statements of Operations (39 Weeks Ended) | (in thousands, except per share data) | November 1, 2019 | November 2, 2018 | | :------------------------------------ | :--------------- | :--------------- | | Net revenue | $900,723 | $949,340 | | Gross profit | $403,134 | $420,753 | | Operating income | $5,611 | $11,886 | | Income (loss) before income taxes | $(12,939) | $(14,647) | | NET INCOME (LOSS) | $(6,226) | $(4,621) | | Basic EPS | $(0.19) | $(0.14) | | Diluted EPS | $(0.19) | $(0.14) | Condensed Consolidated Statements of Comprehensive Operations This section presents the unaudited condensed consolidated statements of comprehensive operations, including net income (loss) and foreign currency translation adjustments, for the 13 and 39 weeks ended November 1, 2019, and November 2, 2018 Condensed Consolidated Statements of Comprehensive Operations | (in thousands) | 13 Weeks Ended Nov 1, 2019 | 13 Weeks Ended Nov 2, 2018 | 39 Weeks Ended Nov 1, 2019 | 39 Weeks Ended Nov 2, 2018 | | :------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | NET INCOME (LOSS) | $3,606 | $3,294 | $(6,226) | $(4,621) | | Foreign currency translation adjustments | $2,290 | $(39) | $(178) | $(3,215) | | COMPREHENSIVE INCOME (LOSS) | $5,896 | $3,255 | $(6,404) | $(7,836) | Condensed Consolidated Balance Sheets This section provides the unaudited condensed consolidated balance sheets, detailing assets, liabilities, and stockholders' equity as of November 1, 2019, November 2, 2018, and February 1, 2019 Condensed Consolidated Balance Sheets (Key Metrics) | (in thousands) | November 1, 2019 | November 2, 2018 | February 1, 2019 | | :------------- | :--------------- | :--------------- | :--------------- | | Total current assets | $603,207 | $630,449 | $588,381 | | TOTAL ASSETS | $1,161,842 | $1,148,718 | $1,110,911 | | Total current liabilities | $369,202 | $295,403 | $241,251 | | TOTAL LIABILITIES | $841,357 | $844,512 | $788,200 | | Total stockholders' equity | $320,485 | $304,206 | $322,711 | - Cash and cash equivalents decreased significantly from $193.4 million at February 1, 2019, to $15.9 million at November 1, 2019. Inventories, net increased from $321.9 million at February 1, 2019, to $499.9 million at November 1, 2019[13] Condensed Consolidated Statements of Cash Flows This section presents the unaudited condensed consolidated statements of cash flows, outlining cash activities from operations, investing, and financing for the 39 weeks ended November 1, 2019, and November 2, 2018 Condensed Consolidated Statements of Cash Flows (39 Weeks Ended) | (in thousands) | November 1, 2019 | November 2, 2018 | | :------------- | :--------------- | :--------------- | | Net cash used in operating activities | $(124,951) | $(52,248) |\ | Net cash used in investing activities | $(28,487) | $(33,033) |\ | Net cash used in financing activities | $(24,576) | $(4,408) |\ | NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | $(177,664) | $(89,935) |\ | CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | $17,689 | $108,002 | - Net cash used in operating activities increased significantly to $124.95 million in Year-to-Date 2019 from $52.25 million in Year-to-Date 2018, primarily due to an increase in inventory[15][141] Condensed Consolidated Statements of Changes in Stockholders' Equity This section details the unaudited condensed consolidated statements of changes in stockholders' equity, including net income (loss) and other comprehensive income, for the period ended November 1, 2019 Condensed Consolidated Statements of Changes in Stockholders' Equity (November 1, 2019) | (in thousands except share data) | Shares | Amount | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders' Equity | | :------------------------------- | :--------- | :----- | :------------------------- | :------------------ | :----------------------------------- | :------------------------- | | Balance at February 1, 2019 | 32,220,080 | $320 | $352,733 | $(17,159) | $(13,183) | $322,711 | | Net income (loss) | — | — | — | $3,606 | — | $3,606 | | Balance at November 1, 2019 | 32,372,693 | $324 | $358,648 | $(25,126) | $(13,361) | $320,485 | - Total stockholders' equity decreased slightly from $322.7 million at February 1, 2019, to $320.5 million at November 1, 2019, primarily due to net losses and cumulative translation adjustments, partially offset by stock-based compensation[17] Notes to Condensed Consolidated Financial Statements This section provides detailed notes explaining the accounting policies, recent pronouncements, and specific financial line items presented in the condensed consolidated financial statements NOTE 1. BACKGROUND AND BASIS OF PRESENTATION Lands' End, Inc. operates as a uni-channel retailer, with unaudited interim financial statements prepared in accordance with GAAP, consolidating all subsidiaries - Lands' End operates as a uni-channel retailer, offering products online, on third-party marketplaces, and through retail locations[22] - The financial statements are unaudited and prepared in accordance with GAAP for interim financial information[27] NOTE 2. RECENT ACCOUNTING PRONOUNCEMENTS (Leases) The Company adopted ASU 2016-02 (ASC 842) on February 2, 2019, recognizing operating lease right-of-use assets of $27.49 million and lease liabilities of $31.59 million - Lands' End adopted ASU 2016-02, Leases (ASC 842), on February 2, 2019, electing the practical expedient package[29] Impact of ASC 842 Adoption on Condensed Consolidated Balance Sheets (February 2, 2019) | (in thousands) | Impact of Adoption | | :------------- | :----------------- | | Operating lease right-of-use asset | $27,494 | | Lease liability - current | $9,892 | | Lease liability - long-term | $21,700 | | Accumulated deficit | $(1,741) | NOTE 3. EARNINGS/(LOSS) PER SHARE Basic and diluted EPS calculations are presented, showing diluted EPS of $0.11 for the 13 weeks ended November 1, 2019, and a loss of $(0.19) for the 39 weeks ended Earnings (Loss) Per Share Summary | (in thousands, except per share amounts) | 13 Weeks Ended Nov 1, 2019 | 13 Weeks Ended Nov 2, 2018 | 39 Weeks Ended Nov 1, 2019 | 39 Weeks Ended Nov 2, 2018 | | :--------------------------------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Net income (loss) | $3,606 | $3,294 | $(6,226) | $(4,621) | | Basic earnings (loss) per share | $0.11 | $0.10 | $(0.19) | $(0.14) | | Diluted earnings (loss) per share | $0.11 | $0.10 | $(0.19) | $(0.14) | - Anti-dilutive shares excluded from diluted EPS calculations were 653,235 for Third Quarter 2019 and 763,163 for Year-to-Date 2019[38] NOTE 4. OTHER COMPREHENSIVE INCOME (LOSS) Other comprehensive income (loss) primarily reflects foreign currency translation adjustments, showing a $2.29 million gain for the 13 weeks ended November 1, 2019 Other Comprehensive Income (Loss) - Foreign Currency Translation Adjustments | (in thousands) | 13 Weeks Ended Nov 1, 2019 | 13 Weeks Ended Nov 2, 2018 | 39 Weeks Ended Nov 1, 2019 | 39 Weeks Ended Nov 2, 2018 | | :------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Foreign currency translation adjustments | $2,290 | $(39) | $(178) | $(3,215) | NOTE 5. DEBT The Company's debt includes a Term Loan Facility with $386.68 million outstanding and an ABL Facility with $80.0 million outstanding as of November 1, 2019, with all financial covenants in compliance Company Debt Summary | (in thousands) | November 1, 2019 Amount | November 1, 2019 Rate | November 2, 2018 Amount | November 2, 2018 Rate | February 1, 2019 Amount | February 1, 2019 Rate | | :------------- | :---------------------- | :-------------------- | :---------------------- | :-------------------- | :---------------------- | :-------------------- | | Term Loan Facility | $386,675 | 5.29% | $491,825 | 5.49% | $490,538 | 5.77% | | ABL Facility | $80,000 | 3.54% | — | —% | — | —% | | Long-term debt, net | $379,606 | | $483,401 | | $482,453 | | - A $100 million voluntary prepayment was made on the Term Loan Facility in First Quarter 2019[41] ABL Facility Borrowing Availability | (in thousands) | November 1, 2019 | November 2, 2018 | February 1, 2019 | | :------------- | :--------------- | :--------------- | :--------------- | | ABL Facility maximum borrowing | $175,000 | $175,000 | $175,000 | | Current borrowings under ABL | $80,000 | — | — | | Borrowing availability under ABL | $82,469 | $152,379 | $153,889 | - The Company was in compliance with all financial covenants related to the Debt Facilities as of November 1, 2019[45] NOTE 6. STOCK-BASED COMPENSATION Lands' End expenses stock awards over vesting periods, with total stock-based compensation expense for the 39 weeks ended November 1, 2019, at $6.63 million Stock-Based Compensation Expense | (in thousands) | 13 Weeks Ended Nov 1, 2019 | 13 Weeks Ended Nov 2, 2018 | 39 Weeks Ended Nov 1, 2019 | 39 Weeks Ended Nov 2, 2018 | | :------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Deferred Awards | $1,531 | $1,237 | $4,429 | $3,177 | | Performance Awards | $611 | $312 | $1,642 | $694 | | Option Awards | $187 | $187 | $561 | $561 | | Total stock-based compensation expense | $2,329 | $1,736 | $6,632 | $4,432 | - Total unrecognized stock-based compensation expense for unvested Deferred Awards was approximately $8.8 million as of November 1, 2019, expected to be recognized over 1.8 years[49] - Total unrecognized stock-based compensation expense for unvested Performance Awards was approximately $4.6 million as of November 1, 2019, expected to be recognized over 2.0 years[51] NOTE 7. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES Restricted cash is valued using Level 1 inputs, while long-term debt, with a carrying amount of $386.68 million, is valued using Level 2 techniques as of November 1, 2019 - Restricted cash is valued at fair value using Level 1 inputs, totaling $1.8 million as of November 1, 2019[53] Long-term Debt Carrying vs. Fair Value | (in thousands) | November 1, 2019 Carrying Amount | November 1, 2019 Fair Value | November 2, 2018 Carrying Amount | November 2, 2018 Fair Value | February 1, 2019 Carrying Amount | February 1, 2019 Fair Value | | :------------- | :------------------------------- | :-------------------------- | :------------------------------- | :-------------------------- | :------------------------------- | :-------------------------- | | Long-term debt, including short-term portion | $386,675 | $372,175 | $491,825 | $475,226 | $490,538 | $460,493 | NOTE 8. INCOME TAXES Income tax expense for Third Quarter 2019 was 27.2%, a change from a 581.6% benefit in the prior year, primarily due to revised Tax Act estimates - Income tax expense for Third Quarter 2019 was 27.2%, compared to a benefit of 581.6% in Third Quarter 2018, mainly due to revised Tax Act estimates[55][111] - Year-to-Date 2019 income tax benefit was 51.9%, reflecting the benefit of treating certain foreign entities as a U.S. branch[55][125] NOTE 9. COMMITMENTS AND CONTINGENCIES The Company is involved in various legal proceedings, with management believing their resolution will not materially affect financial position or results - The Company is party to various claims, legal proceedings, and investigations arising in the ordinary course of business[58] - Management believes the ultimate resolution of these legal matters should not have a material adverse effect on results of operations, cash flows, or financial position[58][160] NOTE 10. RELATED PARTY TRANSACTIONS Related party transactions with Sears Holdings and Transform Holdco show significantly decreased costs for Lands' End Shops at Sears due to store reductions - Sears Holdings Corporation and Transform Holdco are considered related parties due to ESL's significant beneficial ownership[59][60] Related Party Costs - Lands' End Shops at Sears | (in thousands, except for number of stores) | 13 Weeks Ended Nov 1, 2019 | 13 Weeks Ended Nov 2, 2018 | 39 Weeks Ended Nov 1, 2019 | 39 Weeks Ended Nov 2, 2018 | | :---------------------------------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Rent, CAM and occupancy costs | $907 | $3,483 | $2,990 | $12,004 | | Retail services, store labor | $779 | $3,231 | $2,637 | $11,084 | | Total expenses | $1,797 | $7,190 | $5,969 | $24,641 | | Number of Lands' End Shops at Sears at period end | 36 | 125 | 36 | 125 | Related Party Revenue and Costs - Intellectual Property/Services | (in thousands) | 13 Weeks Ended Nov 1, 2019 | 13 Weeks Ended Nov 2, 2018 | 39 Weeks Ended Nov 1, 2019 | 39 Weeks Ended Nov 2, 2018 | | :------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Lands' End business outfitters revenue | $1 | $216 | $4 | $834 | | Credit card revenue | $92 | $184 | $248 | $506 | | Royalty income | $30 | $43 | $131 | $156 | | Total income | $120 | $439 | $375 | $1,484 | NOTE 11. SEGMENT REPORTING As of February 1, 2019, Lands' End aggregated its operating segments into one reportable external segment, reflecting a shift in multi-channel strategy and store closures - As of February 1, 2019, Lands' End updated its segment reporting to align with its multi-channel strategy, aggregating operating segments into one reportable external segment[71] Net Revenue by Product Channel | (in thousands) | 13 Weeks Ended Nov 1, 2019 | 13 Weeks Ended Nov 2, 2018 | 39 Weeks Ended Nov 1, 2019 | 39 Weeks Ended Nov 2, 2018 | | :------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | eCommerce | $242,328 | $231,517 | $669,880 | $634,082 | | Outfitters | $83,342 | $82,261 | $191,877 | $229,671 | | Retail | $14,353 | $27,792 | $38,966 | $85,587 | | Total net revenue | $340,023 | $341,570 | $900,723 | $949,340 | NOTE 12. REVENUE Revenue is recognized upon product transfer to customers, with total net revenue of $900.72 million for the 39 weeks ended November 1, 2019 - Revenue is recognized when control of product passes to customers, net of promotions, returns, discounts, and other incentives[73] Net Revenue by Geographic Location | (in thousands) | 13 Weeks Ended Nov 1, 2019 | 13 Weeks Ended Nov 2, 2018 | 39 Weeks Ended Nov 1, 2019 | 39 Weeks Ended Nov 2, 2018 | | :------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | United States | $297,166 | $295,070 | $768,609 | $812,746 | | Europe | $28,344 | $31,190 | $87,870 | $89,287 | | Asia | $9,633 | $10,273 | $33,271 | $35,033 | | Other | $4,880 | $5,037 | $10,973 | $12,274 | | Total Net revenue | $340,023 | $341,570 | $900,723 | $949,340 | - Total contract liability related to gift cards issued was $20.7 million as of November 1, 2019, up from $16.0 million in the prior year[78] NOTE 13. LEASES Lands' End leases retail operations and equipment as operating leases, with total lease expense of $8.01 million for the 39 weeks ended November 1, 2019 Lease Expense Components | (in thousands) | 13 Weeks Ended Nov 1, 2019 | 39 Weeks Ended Nov 1, 2019 | | :------------- | :------------------------- | :------------------------- | | Operating lease expense | $2,380 | $6,780 | | Variable lease expense | $432 | $1,228 | | Lease expense | $2,812 | $8,008 | Operating Lease Balance Sheet Information (November 1, 2019) | (in thousands, except as noted below) | November 1, 2019 | | :------------------------------------ | :--------------- | | Operating lease right-of-use asset | $31,380 | | Lease liability - current | $6,344 | | Lease liability - long-term | $30,971 | | Weighted average remaining lease term in years | 7.72 years | | Weighted average discount rate | 6.47% | - In Year-to-Date 2019, the Company took possession of retail spaces, increasing Operating lease right-of-use asset by $9.9 million and Lease liability (current and long-term) by $12.0 million[84] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section analyzes Lands' End's financial performance, condition, and operational results for the third quarter and year-to-date periods, covering key metrics, revenue trends, profitability, and liquidity Executive Overview This overview describes Lands' End as a uni-channel retailer, its aggregated reporting segments, and the seasonal fluctuations impacting its net revenue and earnings - Lands' End is a leading uni-channel retailer of casual clothing, accessories, footwear, and home products, operating online, on third-party marketplaces, and through retail locations[88] - The Company's operating segments (U.S. eCommerce, Retail, Outfitters, Europe eCommerce, and Japan eCommerce) are aggregated into one external reportable segment[89] - Lands' End experiences seasonal fluctuations, with a significant portion of net revenue and earnings historically realized in the fourth fiscal quarter (average 35.1% of Net revenue over the past three years)[92] Results of Operations This section details the Company's financial performance, including net income (loss), Adjusted EBITDA, and a comparative analysis of revenue and profitability for the third quarter and year-to-date periods Net Income (Loss) and Adjusted EBITDA This section presents net income (loss) and Adjusted EBITDA for the 13 and 39 weeks ended November 1, 2019, and November 2, 2018, highlighting Adjusted EBITDA as a key non-GAAP performance metric Net Income and Adjusted EBITDA (13 Weeks Ended) | (in thousands) | November 1, 2019 | November 2, 2018 | | :------------- | :--------------- | :--------------- | | Net income | $3,606 | $3,294 | | Adjusted EBITDA | $18,758 | $15,688 | Net Loss and Adjusted EBITDA (39 Weeks Ended) | (in thousands) | November 1, 2019 | November 2, 2018 | | :------------- | :--------------- | :--------------- | | Net loss | $(6,226) | $(4,621) | | Adjusted EBITDA | $28,613 | $32,437 | - Adjusted EBITDA is a non-GAAP measure used by management to evaluate operating performance and as an executive compensation metric, excluding effects of financings, investing activities, tax structure, and certain significant items[95][97] Discussion and Analysis - Third Quarter 2019 compared with Third Quarter 2018 This section analyzes the Company's financial performance for the third quarter, comparing net revenue by channel, gross profit, operating income, net income, and interest expense between 2019 and 2018 Net Revenue by Channel (Third Quarter) | Channel | Nov 1, 2019 (in millions) | Nov 2, 2018 (in millions) | Change ($) | Change (%) | | :--------- | :------------------------ | :------------------------ | :--------- | :--------- | | Total Net Revenue | $340.0 | $341.6 | $(1.5) | (0.5)% | | eCommerce | $242.3 | $231.5 | $10.8 | 4.7% | | Outfitters | $83.3 | $82.3 | $1.1 | 1.3% | | Retail | $14.4 | $27.8 | $(13.4) | (48.4)% | - Gross profit increased by $3.2 million to $154.2 million, with gross margin increasing to 45.3% (up 110 basis points) due to a more disciplined promotional strategy[103] - Operating income increased to $10.9 million from $8.5 million in the prior year, while Net income increased to $3.6 million from $3.3 million[108][112] - Interest expense decreased to $6.1 million from $7.3 million, reflecting a $100 million voluntary prepayment on the term loan[109] Discussion and Analysis - Year-to-Date 2019 compared with Year-to-Date 2018 This section analyzes the Company's year-to-date financial performance, comparing net revenue by channel, gross profit, operating income, and net loss between 2019 and 2018 Net Revenue by Channel (Year-to-Date) | Channel | Nov 1, 2019 (in millions) | Nov 2, 2018 (in millions) | Change ($) | Change (%) | | :--------- | :------------------------ | :------------------------ | :--------- | :--------- | | Total Net Revenue | $900.7 | $949.3 | $(48.6) | (5.1)% | | eCommerce | $669.9 | $634.1 | $35.8 | 5.6% | | Outfitters | $191.9 | $229.7 | $(37.8) | (16.5)% | | Retail | $39.0 | $85.6 | $(46.6) | (54.5)% | - Gross profit decreased by $17.6 million to $403.1 million, primarily due to the Delta Air Lines launch in the prior year and fewer Lands' End Shops at Sears, partially offset by eCommerce growth. Gross margin increased by 50 basis points to 44.8%[118] - Operating income decreased to $5.6 million from $11.9 million, mainly due to the Delta Air Lines launch in the prior year[122] - Net loss increased to $6.2 million from $4.6 million in the prior year, with diluted loss per share at $(0.19)[126] Liquidity and Capital Resources This section discusses the Company's liquidity needs, sources of capital, including cash on hand, cash flows from operations, and the ABL Facility, and details cash flow activities for the year-to-date period - The Company's primary liquidity needs are for working capital, capital expenditures, debt service, and general corporate purposes, expected to be met by cash on hand, cash flows from operations, and the ABL Facility for at least the next 12 months[128] - As of November 1, 2019, the ABL Facility had $80.0 million in outstanding borrowings, $12.5 million in outstanding letters of credit, and $82.5 million in availability[129][147] - Net cash used in operating activities increased to $125.0 million in Year-to-Date 2019, primarily due to increased inventory for the Fourth Quarter 2019 American Airlines launch and accelerated shipments before tariffs[141] - Net cash used in financing activities was $24.6 million, primarily due to a $100 million voluntary prepayment on the Term Loan Facility[144] - For Fiscal 2019, capital expenditures are expected to be approximately $40.0 million, focused on ERP system, digital infrastructure, and U.S. Company Operated store expansion[143] Application of Critical Accounting Policies and Estimates This section identifies the Company's critical accounting policies and estimates, including revenue recognition, inventory valuation, goodwill impairment, and income taxes, noting no significant changes since February 1, 2019 - Critical accounting policies and estimates include revenue, inventory valuation, goodwill and intangible asset impairment assessments, and income taxes[148] - There have been no significant changes in critical accounting policies or their application since February 1, 2019[149] Recent Accounting Pronouncements This section refers to Note 2 of the Condensed Consolidated Financial Statements for detailed information regarding recent accounting pronouncements - Information regarding recent accounting pronouncements is detailed in Note 2 of the Condensed Consolidated Financial Statements[150] CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION This section provides a cautionary statement regarding forward-looking information, noting that future events are subject to risks and uncertainties, and the Company disclaims any obligation to update these statements - The document contains forward-looking statements regarding future events and performance, which are subject to risks and uncertainties that could cause actual results to differ materially[151] - The Company disclaims any obligation to update or revise forward-looking statements, except as required by applicable securities laws[152] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company faces market risk from currency and interest rate fluctuations, holding $7.3 million in foreign currencies and having variable rates on its Term Loan and ABL Facilities - The Company's market risk primarily stems from currency rates and variable interest rates on its Term Loan Facility and ABL Facility[153][154] - As of November 1, 2019, Lands' End held $7.3 million in cash denominated in foreign currencies (British Pound Sterling, Euros, Yen, Hong Kong Dollars)[153] - A one percentage point change in interest rates would result in a $3.9 million change in annual cash interest expenses for the Term Loan Facility and an estimated $1.8 million change for a fully drawn ABL Facility[154] ITEM 4. CONTROLS AND PROCEDURES Management concluded that Lands' End's disclosure controls and procedures were effective as of November 1, 2019, with no material changes in internal control over financial reporting - The Company's Chief Executive Officer and President, and Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer concluded that disclosure controls and procedures were effective as of November 1, 2019[156] - No material changes in internal control over financial reporting were identified during the Third Fiscal Quarter Ended November 1, 2019[157] PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is involved in various legal proceedings, with management expecting no material adverse effect on financial position or results - The Company is involved in various claims, legal proceedings, and investigations arising in the ordinary course of business[160] - Management is of the opinion that the ultimate resolution of these matters should not have a material adverse effect on the Company's results of operations, cash flows, or financial position[160] ITEM 1A. RISK FACTORS No material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended February 1, 2019 - No material changes to the risk factors disclosed in the Annual Report on Form 10-K for the year ended February 1, 2019[162] ITEM 6. EXHIBITS This section lists documents filed as exhibits to the Form 10-Q report, including corporate organizational documents and executive certifications - Exhibits include Amended and Restated Certificate of Incorporation, Bylaws, Certifications of Principal Executive and Financial Officers, and XBRL Instance and Taxonomy Documents[164] Signatures The report is signed by James F. Gooch, Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer, on behalf of Lands' End, Inc. as of December 3, 2019 - The report was signed by James F. Gooch, Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer, on December 3, 2019[166]