Lands' End (NasdaqCM:LE) Q3 2026 Earnings Call December 09, 2025 08:30 AM ET Company ParticipantsTom Altholz - Senior Director of Financial Planning and AnalysisNone - OperatorAndrew McLean - CEOBernie McCracken - CFODana Telsey - Founder and CEOConference Call ParticipantsEric Beder - CEO and Consumer Equity AnalystSteve Silver - Senior Equity Research AnalystNoneHello and welcome, everyone, joining today's Lands' End third quarter 2025 earnings call. At this time, all participants are in a listen-only mod ...

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $318 million, essentially flat year-over-year, while GMV increased low single digits [13] - Adjusted net income was $7 million, or $0.21 per share, with adjusted EBITDA of $26 million, representing a year-over-year increase of approximately 28% [17] - Gross margin improved to nearly 52%, an increase of approximately 120 basis points from Q3 2024 [16] Business Line Data and Key Metrics Changes - U.S. e-commerce business generated $180 million, a decrease of approximately 3% compared to Q3 2024, attributed to improved promotional productivity and inventory efficiency [14] - Third-party marketplace business grew approximately 34%, with significant contributions from Amazon and Macy's [14] - School uniform business grew over 20%, driven by a strong back-to-school season [15] Market Data and Key Metrics Changes - Sales in Europe decreased approximately 20% year-over-year due to increased promotional activity and macroeconomic pressures [16] - Revenue from the licensing business grew over 30% year-over-year, reflecting increased brand visibility [16] Company Strategy and Development Direction - The company is focused on connecting with customers through an asset-light, agile business model, emphasizing high-quality solutions [4] - Strategic investments in third-party marketplaces are aimed at accelerating brand reach and reinforcing the digital ecosystem [14] - The company is expanding its product offerings and marketing strategies to attract a younger customer base [5][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the momentum in North America and noted strong performance in November, particularly during the holiday season [20] - The company is focused on managing promotional levels effectively to maintain gross margins while driving sales [29] - Future guidance includes expected net revenue between $1.33 billion and $1.36 billion for the full year, with GMV anticipated to grow low single digits [19] Other Important Information - The company announced two key leadership appointments to strengthen strategic focus and drive growth [22] - The board is exploring strategic alternatives, with no further comments provided at this time [23] Q&A Session Summary Question: Insights on revenue expectations and promotional levels - Management noted satisfaction with North American growth and effective management of promotional levels, particularly during back-to-school campaigns [28][29] Question: Update on licensing business and future expectations - Management indicated that licensing is expected to continue growing, with new licenses set to take effect in the upcoming quarters [37][40] Question: Inventory levels and future expectations - Inventory increased by only 3% year-over-year, with management expressing confidence in their inventory management strategies [47][49]

Core Insights - Jurgita Mišeniovienė has been appointed as the Chair of the Board at Utenos Trikotažas, marking a significant leadership change as the company aims for growth and operational efficiency [1][4] - The company has experienced substantial revenue growth, with a 30.7% year-over-year increase in group revenues, reaching EUR 15.9 million [7] - Utenos Trikotažas is transitioning into a new strategic phase focused on profitability and brand development, with key appointments reflecting this direction [4][5] Leadership Changes - Jurgita Mišeniovienė brings over 15 years of leadership experience from the furniture manufacturing sector [2] - Aurimas Likus has been appointed to the Board, replacing Dovilė Tamoševičienė, who will continue as Director of Business Control [1][3] - The current Board composition includes Jurgita Mišeniovienė (Chair), Aurimas Likus, Vytautas Vaškys, Neringa Vaitelytė, Jelena Grišina, and Artūras Užgalis [6] Financial Performance - Utenos Trikotažas reported a 46.1% increase in contract manufacturing knitwear sales, totaling EUR 13.3 million [7] - The group's EBITDA improved to EUR 286 thousand, a significant recovery from a negative EUR 1.6 million the previous year [8] - The pre-tax loss for the group decreased from EUR 3.2 million to EUR 1.4 million, indicating a positive trend in financial performance [8]

Brand Portfolio and Revenue - Lanvin Group manages a diverse portfolio of 5 iconic luxury heritage brands[10, 21] - In 2024, Lanvin's revenue was €83 million, representing 25% of the group's revenue[16] - Wolford's 2024 revenue was €88 million, accounting for 27% of the group's revenue[17] - Sergio Rossi's 2024 revenue was €42 million, which is 13% of the group's revenue[16] - St John's 2024 revenue reached €79 million, making up 24% of the group's revenue[19] - Caruso generated €37 million in revenue in 2024, contributing 11% to the group's revenue[16] Financial Performance and Challenges - The group's global revenue for FY 2024 was €329 million, a 23% decrease compared to FY 2023[80] - The group's Adjusted EBITDA in 2024 was -€92320 thousand, representing -28% of revenue[87, 132] - The group is implementing measures to reduce G&A expenses and improve working capital management[80] Strategic Initiatives - The group is focused on streamlining expenses and enhancing operational efficiency[77] - The group is upgrading its store network with disciplined new openings and a strategic focus on key markets[97] - The group is aiming to reduce discounts and sharpen product offerings to focus on core and less seasonal categories[95]

Valuation and Performance - Ralph Lauren Corporation (RL) is trading at a forward 12-month price-to-earnings (P/E) ratio of 19.54x, significantly higher than the industry average of 11.2x, indicating strong investor confidence in the company's brand equity and strategic execution [1] - In the past year, RL's shares have increased by 55.5%, outperforming the industry, which declined by 13.5%, as well as the broader sector and the S&P 500 index, which grew by 19.8% and 10.8%, respectively [5][9] - Peers such as Duluth Holdings, Guess? Inc., and Gildan Activewear have lower forward P/E ratios of 7.59x, 7.59x, and 13.21x, reflecting their company-specific challenges [3] Strategic Growth and Digital Transformation - Ralph Lauren's digital transformation is a key growth driver, with direct-to-consumer (DTC) channels now accounting for two-thirds of the business, and digital comps growing in double digits globally [11] - The company has added nearly 6 million new DTC consumers in fiscal 2025, with growth primarily from younger, female, and less price-sensitive demographics [11] - Innovations such as predictive buying and AI-enabled planning are enhancing inventory efficiency and responsiveness [12] Brand and Product Strategy - Ralph Lauren's multi-year strategy focuses on brand elevation, driving core products, and winning in key cities, resulting in low double-digit growth for core products, which represent about 70% of the business [13] - Strategic pricing actions and product elevation have driven average unit retail growth while reinforcing luxury and value perceptions [14] - The company is making investments in prime real estate, such as acquiring its Polo flagship in SoHo, to support its DTC-led growth strategy [14] Earnings Estimates and Market Sentiment - The Zacks Consensus Estimate for earnings per share has seen upward revisions, with estimates rising to $13.69 for 2026 and $15.03 for 2027, indicating expected year-over-year growth rates of around 11% and 9.8% for those years [15] - Despite strong performance, Ralph Lauren faces challenges from a volatile global macroeconomic environment, with consumer sentiment pressured by inflation and geopolitical tensions [18] Investment Outlook - Ralph Lauren is viewed as a compelling investment due to its strong brand positioning, lifestyle-driven product strategy, and expanding global footprint [19] - The company's focus on premiumization and disciplined execution supports consistent performance across regions and channels [19] - However, the stock's premium valuation reflects high investor expectations, which may be tested amid ongoing macroeconomic uncertainty [20]

Group 1: Sales Performance - Utenos Trikotažas reported sales of 5.2 million euros in Q1 2025, a 66.3% increase from 3.1 million euros in the same period last year, with exports accounting for 76.3% of total sales [1] - Sales in the contract manufacturing segment rose by 89.6% year-on-year to 4.1 million euros, while sales of own-brand products remained nearly flat at 550 thousand euros [3] Group 2: Financial Improvement - The company posted a pre-tax loss of 440 thousand euros in Q1 2025, significantly improved from a loss of 1.48 million euros in Q1 2024 [4] - EBITDA improved but remained negative at 190 thousand euros, which was 982 thousand euros lower than the previous year [4] Group 3: Operational Strategy - The company is focusing on operational optimization by reducing fixed costs and subcontracting production, which has led to reduced losses and improved EBITDA [5] - The CEO indicated that clients are planning larger orders for the second half of the year, suggesting a positive sales trend moving forward [6] Group 4: Company Overview - Utenos Trikotažas is one of the largest sustainable knitwear manufacturers in Central and Eastern Europe, specializing in on-demand ready-to-wear production and jersey fabric development [7] - The company operates three factories located in Lithuania and Ukraine, with a commitment to environmental and social responsibility across its production processes [8]