Lands' End Announces Second Quarter 2025 Results

Core Insights - Lands' End, Inc. reported a decrease in net revenue for the second quarter of 2025, totaling $294.1 million, down 7.3% from $317.2 million in the same quarter of 2024 [3] - The company experienced a gross margin increase of approximately 90 basis points, reaching 48.8% compared to 47.9% in the prior year, driven by improved promotional productivity and licensing business expansion [3][11] - The company is actively exploring strategic alternatives, including potential sale or merger, to maximize shareholder value [10] Financial Performance - Gross Merchandise Value (GMV) remained approximately flat year-over-year [3] - U.S. Digital Segment net revenue decreased by 5.6% to $255.3 million, while U.S. eCommerce net revenue fell by 11.2% to $167.3 million, attributed to a slower start in seasonal swim products [3] - Outfitters net revenue increased by 5.1% to $66.4 million, driven by new customer acquisitions from a competitor [3] - Third Party net revenue rose by 14.3% to $21.6 million, primarily due to curated product assortments [3] - Europe eCommerce net revenue decreased by 14.8% to $19.6 million, impacted by supply chain challenges [3] - Licensing and Retail net revenue fell by 19.7% to $19.2 million, with a notable decline in U.S. Company Operated Stores [3] Balance Sheet and Cash Flow - Cash and cash equivalents decreased to $21.3 million as of August 1, 2025, from $25.6 million a year earlier [5] - Inventories declined by 3% year-over-year to $301.8 million, reflecting disciplined inventory management [6] - Net cash provided by operating activities was $0.5 million for the 26 weeks ended August 1, 2025, down from $4.9 million in the prior year [7] Strategic Initiatives - The company is implementing measures to manage anticipated tariff headwinds for the remainder of fiscal 2025 [11] - A share repurchase program is in place, with $1.7 million repurchased during the second quarter and an additional $8.8 million available for purchase [9] Outlook - For the third quarter of fiscal 2025, the company expects net revenue between $320.0 million and $350.0 million, with adjusted EBITDA projected in the range of $24.0 million to $28.0 million [17][33] - Full-year guidance includes net revenue between $1.33 billion and $1.40 billion, with adjusted EBITDA expected between $98.0 million and $107.0 million [17][33]