Lands’ End(US:LE)2025-12-09 21:16Financial Performance - Net revenue for the Third Quarter 2025 was $317.5 million, a slight decrease of 0.4% compared to $318.6 million in the same quarter of the previous year[101]. - Year-to-Date 2025 net revenue was $872.8 million, down 5.3% from $921.3 million in Year-to-Date 2024[102]. - Net revenue for Q3 2025 was $317.5 million, a decrease of $1.1 million or 0.3% from Q3 2024[112]. - U.S. eCommerce net revenue decreased by $6.3 million or 3.4% to $179.8 million in Q3 2025[113]. - U.S. eCommerce net revenue decreased by $27.1 million or 5.0% to $517.8 million in Year-to-Date 2025, despite continued strength in outerwear and transitional key items[134]. - Europe eCommerce net revenue decreased by $15.6 million or 21.4% to $57.3 million in Year-to-Date 2025, primarily due to new leadership and macroeconomic pressures[137]. - Net revenue from the Europe eCommerce distribution channel represented approximately 7% of total net revenue during Year-to-Date 2025[177]. Profitability - Gross profit margin improved to 51.8% in the Third Quarter 2025 from 50.6% in the Third Quarter 2024[101]. - Operating income increased to $16.8 million, representing 5.3% of net revenue, compared to $9.3 million (2.9% of net revenue) in the prior year[101]. - The company experienced a net income of $5.2 million in the Third Quarter 2025, compared to a net loss of $0.6 million in the same quarter of the previous year[101]. - Adjusted net income for Q3 2025 was $6.5 million, compared to $1.8 million in Q3 2024, with adjusted diluted earnings per share increasing to $0.21[127]. - Gross profit was $440.6 million for Year-to-Date 2025, a decrease of $11.4 million or 2.5%, but gross margin improved by approximately 140 basis points to 50.5%[139]. - Adjusted EBITDA for Q3 2025 was $25.9 million, an increase of 28% compared to $20.3 million in Q3 2024[128]. - Adjusted EBITDA was $49.5 million in Year-to-Date 2025, compared to $48.9 million in Year-to-Date 2024[149]. Expenses - The company incurred $1.5 million in restructuring costs during the Third Quarter 2025, compared to $1.8 million in the same quarter of the previous year[97]. - Total restructuring costs for Year-to-Date 2025 reached $7.2 million, up from $4.5 million in Year-to-Date 2024[97]. - Selling and administrative expenses decreased by $2.3 million to $138.6 million, representing 43.7% of net revenue in Q3 2025[119]. - Selling and administrative expenses decreased by $12.4 million to $391.4 million, representing 44.8% of net revenue in Year-to-Date 2025[140]. Cash Flow and Financing - Net cash used in operating activities was $15.2 million during Year-to-Date 2025, an increase from $12.2 million in Year-to-Date 2024, primarily due to tariffs[167]. - Net cash used in investing activities was $23.9 million in Year-to-Date 2025, compared to $22.1 million in Year-to-Date 2024, mainly for updating digital information technology infrastructure[168]. - Net cash provided by financing activities was $58.4 million during Year-to-Date 2025, up from $39.4 million in Year-to-Date 2024, driven by increased borrowings under the ABL Facility[169]. - As of October 31, 2025, the outstanding balance on the ABL Facility was $75.0 million, an increase from $60.0 million on November 1, 2024[171]. Market Conditions - Macroeconomic challenges, including inflation and high interest rates, continue to impact consumer discretionary spending and may require higher promotional efforts[94]. - A 10% change in foreign currency exchange rates could have resulted in a $5.7 million increase or decrease in net revenue for Year-to-Date 2025[177]. - Each one percentage point change in interest rates associated with the Term Loan Facility would result in a $2.3 million change in annual cash interest expenses[179]. Segment Performance - U.S. Digital Segment net revenue increased by $4.0 million or 1.5% to $277.5 million in Q3 2025[112]. - Outfitters net revenue increased by $5.4 million or 7.4% to $78.8 million in Q3 2025, driven by a strong back-to-school season[114]. - Third Party net revenue increased by $4.8 million or 34.0% to $18.9 million in Q3 2025, primarily due to strength in marketplace partners[115]. - U.S. Digital Segment variable profit increased by $8.0 million to $71.4 million in Q3 2025, representing 25.7% of net revenue[129]. - Outfitters net revenue increased by $8.9 million or 5.0% to $188.1 million in Year-to-Date 2025, driven by a strong back-to-school season and new customer acquisitions[135]. - Third Party net revenue increased by $6.2 million or 12.8% to $54.6 million in Year-to-Date 2025, attributed to curated product assortments[136].