Lands’ End(LE) - 2026 Q1 - Quarterly Report

Financial Performance - For the 13 weeks ended May 2, 2025, net revenue was $261.2 million, a decrease of 8.5$285.5 million for the same period in 2024[96]. - Gross profit for the first quarter of 2025 was $132.7 million, representing a gross margin of 50.8$8.3 million, or 3.2% of net revenue, compared to a net loss of $6.4 million, or 2.3$5.4 million, with an adjusted diluted loss per share of $0.18, compared to an adjusted net loss of$6.2 million and an adjusted diluted loss per share of $0.20 in the first quarter of 2024[102]. - Net revenue for Q1 2025 was$261.2 million, a decrease of $24.3 million or 8.5$285.5 million in Q1 2024[108]. - Gross profit for Q1 2025 was $132.7 million, a decrease of$6.3 million or 4.5% from $139.0 million in Q1 2024, while gross margin improved to 50.8$3.9 million to $123.5 million, representing 47.3$9.5 million, down from $11.6 million in Q1 2024[124]. - Net loss for Q1 2025 was$8.3 million, with a diluted loss per share of $0.27, compared to a net loss of$6.4 million and diluted loss per share of $0.20 in Q1 2024[122]. Restructuring and Operational Changes - The company incurred restructuring charges of$3.3 million in the first quarter of 2025, compared to $0.3 million in the first quarter of 2024[91]. - The company reduced approximately 6$2.4 million of restructuring costs incurred as of May 2, 2025, remain unpaid and are included in accrued expenses[92]. Revenue by Distribution Channel - U.S. eCommerce net revenue increased slightly by $0.2 million or 0.1$170.7 million in Q1 2025, driven by strong outerwear sales[109]. - Europe eCommerce net revenue decreased by $7.1 million or 28.4$17.9 million in Q1 2025, attributed to a strategic relaunch as a premium brand[112]. - The company operates through multiple distribution channels, including U.S. eCommerce, Europe eCommerce, Outfitters, Third Party, Licensing, and Retail[90]. - The company’s net revenue from the Europe eCommerce distribution channel represented approximately 7% of total net revenue during Year-to-Date 2025[153]. Cash Flow and Financing Activities - Net cash used in operating activities was $22.5 million during First Quarter 2025, a decrease from$25.8 million in First Quarter 2024, attributed to changes in working capital[143]. - Net cash used in investing activities was $8.3 million in First Quarter 2025, compared to$6.7 million in First Quarter 2024, primarily for investments in digital information technology infrastructure[144]. - Net cash provided by financing activities was $32.4 million in First Quarter 2025, down from$35.0 million in First Quarter 2024, mainly due to increased share repurchases[145]. - As of May 2, 2025, the company had $40.0 million outstanding on the ABL Facility, unchanged from the previous year, with outstanding letters of credit totaling$11.0 million[147]. - The ABL Facility had a balance outstanding of $40.0 million as of May 2, 2025, with borrowing availability of$86.8 million[129]. Economic and Market Conditions - Macroeconomic challenges, including inflation and high interest rates, continue to impact consumer discretionary spending and may require higher promotional efforts[88]. - Seasonal fluctuations resulted in approximately 34% of net revenue generated in the fourth quarters of both Fiscal 2024 and Fiscal 2023[94]. - A 10% change in foreign currency exchange rates would have resulted in a potential $1.8 million increase or decrease in net revenue for Year-to-Date 2025[153]. - Each one percentage point change in interest rates associated with the Term Loan Facility would result in a$2.4 million change in annual cash interest expenses[155]. - The Term Loan Facility has a fluctuating interest rate based on the Total Leverage Ratio, with margins ranging from 7.75% to 8.25% depending on the leverage ratio[134]. - As of May 2, 2025, the company was in compliance with its financial covenants in the Debt Facilities[141].