Executive Summary

Q3 FY2025: Revenue was $318.6M (-1.9% YoY), GAAP diluted EPS was $(0.02), and adjusted EPS was $0.06; gross margin expanded to 50.6% (+360 bps YoY), and adjusted EBITDA rose to $20.3M (+17% YoY) .
Brand health strengthening: GMV grew low-double digits (above guidance), new customer acquisition rose 20% YoY (mid-teens YTD), and inventories declined 20% YoY; these supported higher-quality sales and margin gains .
Guidance: Q4 revenue $440–$480M; adjusted EPS $0.51–$0.61; FY revenue $1.36–$1.40B, adjusted EPS $0.35–$0.45, adjusted EBITDA $92–$96M (narrowed ranges; higher EPS low end) .
Stock reaction catalysts: continued gross margin expansion to 50.6%, GMV outperformance vs guidance, strong licensing/marketplace traction (e.g., Nordstrom), and evidence of younger customer acquisition; watch SG&A reinvestment and school uniform timing headwinds .

What Went Well and What Went Wrong

What Went Well
- Gross margin reached 50.6% (+360 bps YoY) on lower promotions, better mix/newness, and supply chain cost improvements; adjusted EBITDA grew 17% YoY to $20.3M .
- “Third quarter gross margin was the highest that I can find in any quarter going all the way back to the IPO,” highlighting execution on pricing discipline and product innovation (CEO) .
- Demand signals: GMV grew low-double digits (above guidance), new customer acquisition +20% YoY (mid-teens YTD), and EU gross margin up ~900 bps YoY; U.S. e-comm margin +~350 bps YoY .
What Went Wrong
- Revenue declined 1.9% YoY to $318.6M, with U.S. e-comm down 2.2% (transition of kids/footwear to licensing and lower promotions), and International e-comm down 4.6% on reduced markdowns .
- SG&A deleveraged to 44.2% of revenue (+~250 bps YoY) due to higher digital marketing spend (though intended to fuel customer growth) .
- Outfitters: school uniform revenue fell 8% YoY on timing; GAAP net loss of $(0.6)M persisted despite improved non-GAAP profitability .

Financial Results

Metric	Q1 FY2025 (May 3, 2024)	Q2 FY2025 (Aug 2, 2024)	Q3 FY2025 (Nov 1, 2024)
Net Revenue ($M)	$285.5	$317.2	$318.6
Gross Margin (%)	48.7%	47.9%	50.6%
Adjusted EBITDA ($M)	$11.6	$17.1	$20.3
GAAP Diluted EPS ($)	$(0.20)	$(0.17)	$(0.02)
Adjusted Diluted EPS ($)	$(0.20)	$(0.02)	$0.06

Segment/channel revenue snapshots (where disclosed):

Segment/Channel ($M)	Q1 FY2025	Q2 FY2025	Q3 FY2025
Global eCommerce	$195.5	$211.3	$211.1
Outfitters	$42.7	$63.2	$73.4
Third Party	$37.5	$30.1	$25.5

Key KPIs and balance sheet:

KPI	Q1 FY2025	Q2 FY2025	Q3 FY2025
GMV YoY growth	Low single digits	Mid-single digits	Low-double digits; above guidance
New customer acquisition	High-single digits	Mid-single digits YTD	+20% YoY; mid-teens YTD
Inventory YoY change	-23%	-21%	-20%
Inventory ($M)	$288.6	$312.0	$335.9

YoY context for Q3 FY2025:

Revenue: $318.6M vs $324.7M prior-year Q3 (-1.9%) .
Gross margin: 50.6% vs 47.0% (+360 bps) .
Adjusted EBITDA: $20.3M vs $17.3M (+17%) .
Adjusted EPS: $0.06 vs $(0.11) prior-year Q3 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Revenue ($B)	FY 2024	$1.35 – $1.43	$1.36 – $1.40	Narrowed; midpoint slightly lower
Adjusted EBITDA ($M)	FY 2024	$90 – $98	$92 – $96	Narrowed; midpoint maintained
Adjusted Diluted EPS ($)	FY 2024	$0.29 – $0.48	$0.35 – $0.45	Raised low end; narrowed
Net Revenue ($M)	Q4 FY2024	N/A	$440 – $480	New
Adjusted Diluted EPS ($)	Q4 FY2024	N/A	$0.51 – $0.61	New
Adjusted EBITDA ($M)	Q4 FY2024	N/A	$43 – $47	New
Capex ($M)	FY 2024	~$35	~$35	Maintained

Earnings Call Themes & Trends

Topic	Q1 FY2025 (Jun)	Q2 FY2025 (Sep)	Q3 FY2025 (Dec)	Trend
Margin expansion via lower promos/newness	410 bps GM expansion; outfit-centric assortment; higher AURs	470 bps GM expansion; highest since 2014 by promo discipline	GM 50.6% (+360 bps), “highest since IPO” comment; quality sales maintained	Improving/stable
Supply chain/nearshoring	Speed-to-market, Western Hemisphere sourcing push	More nearshoring; freight mitigated; inventories at historical lows	Fabric moved closer to production; resilience highlighted	Structural improvement
Licensing strategy	Kids/footwear to licenses; Costco launch; home license announced	Nordstrom marketplace added; licensing drives diversification	80/20 target (licensed share); exploring beauty, luggage, fragrance; international licensing	Expanding breadth
Third-party marketplaces	Managing closely with DTC; Costco pilot success	Nordstrom marketplace launched; partner-specific assortments	Nordstrom exceeded expectations; club channel strong; 80% marketplace buyers are new/5+ year lapsed	Accretive for customer acquisition
B2B/Outfitters	Re-tooled; deprioritized promos; pipeline building	Wells Fargo multi-year win (35k employees)	Business uniform +7% YoY; Wells ramp; school uniforms timing drag short-term	Positive mix; timing noise
Marketing and customer mix	Social doubled demand; high-single-digit new-to-file	Younger cohorts (10 years younger), new-to-file up; lower promo rates	New customers +20% YoY; continued younger cohorts; reinvest in marketing	Efficient reinvestment

Management Commentary

“Throughout the third quarter, we sustained momentum… resulting in growth in both gross margin and gross profit dollars.” (CEO) .
“Our third quarter gross margin was the highest that I can find in any quarter going all the way back to the IPO.” (CEO) .
“GMV increased low double digits for the third quarter… exceeded our guidance.” (CFO) .
“China now accounts for less than 6% of our open to buy… we’re progressively moving towards Western Hemisphere.” (CEO) .
“New customers… are 10 to 12 years younger… and buying at a higher average unit retail.” (Mgmt) .

Q&A Highlights

Promotional discipline and customer acquisition: Management reiterated staying out of industry-wide heavy promos, using brand/assortment and targeted campaigns; cited Black Friday/Cyber Monday in line with expectations and new, younger cohorts engagement .
China/tariffs risk: Limited exposure (<6% OTB), with Western Hemisphere sourcing strategy mitigating geopolitical risks (cashmere a small category exception) .
Licensing mix and criteria: Targeting ~20% of sales via licensing with 5–10 licensees; adding home in 2025; evaluating beauty, luggage, fragrance; prioritizing established partners with aligned brand values and economics (royalties/minimums) .
Inventory normalization: After seven quarters of reductions, levels viewed as normalized going forward, with further process efficiencies and nearshoring benefits .
GMV vs revenue dynamic: Revenue pressured by kids/footwear license transition (heavier in Q4) while GMV captures Lands’ End branded sell-through across licensed and third-party channels .
Third-party flywheel: Nordstrom marketplace outperformed; marketplace sales sourced from single inventory reduce risk and deliver customer data; ~80% of marketplace customers are new or long-lapsed .

Estimates Context

We attempted to retrieve S&P Global consensus (revenue and EPS) for Q3 FY2025, but S&P Global data was unavailable due to provider request limits at the time of analysis. As a result, we cannot present beat/miss versus Wall Street consensus for this quarter. We anchor to company guidance/results instead [SPGI retrieval error].

Key Takeaways for Investors

Margin-led turnaround continues: Gross margin at 50.6% and adjusted EBITDA up 17% YoY demonstrate pricing discipline and mix improvements; this remains the core equity driver near term .
Demand quality > topline: GMV rose low-double digits and exceeded guidance while reported revenue dipped YoY due to licensing transitions—elevated gross profit dollars and new customer growth (+20% YoY) support the quality-over-volume strategy .
Reinvestment is working: Higher marketing spend lifted SG&A rate but delivered younger, higher-AUR customers and broad channel engagement; watch operating leverage as revenue scales .
Structural tailwinds: Nearshoring and faster turns should preserve margin gains and working capital efficiency; inventories down 20% YoY and management views levels as normalized .
Licensing/marketplaces broaden reach: Nordstrom marketplace, club partners, and new licenses (home in 2025) underscore an asset-light path to share gains, with a disciplined 80/20 target mix .
FY guide narrowed: Revenue range tightened with a slightly lower midpoint; adjusted EPS range raised at the low end and narrowed overall; Q4 guide sets expectations for holiday execution .
Monitor risks: Promotional environment, school uniform timing, and SG&A reinvestment cadence could influence near-term EPS trajectory despite robust margin trends .

Appendix: Additional Detail Tables

Q3 FY2025 vs Prior-Year Q3 and Prior Quarter

Metric	Q3 FY2024 (Prior-Year)	Q2 FY2025 (Prior Qtr)	Q3 FY2025
Net Revenue ($M)	$324.7	$317.2	$318.6
Gross Margin (%)	47.0%	47.9%	50.6%
Adjusted EBITDA ($M)	$17.3	$17.1	$20.3
Adjusted Diluted EPS ($)	$(0.11)	$(0.02)	$0.06

Selected Channel Commentary (Q3 FY2025)

U.S. eCommerce: -2.2% YoY; excluding kids/footwear license transition, low-double-digit growth YoY .
International eCommerce: -4.6% YoY on lower markdowns; EU GM +~900 bps YoY .
Outfitters: $73.4M (-1.2% YoY); business uniform +7% YoY; school uniform -8% YoY on timing .
Third Party: $25.5M (+6.3% YoY) on licensing growth .

Sources: Q3 FY2025 press release and 8-K ; Q3 FY2025 earnings call transcript ; Q2 FY2025 press release/call ; Q1 FY2025 press release/call .

LANDS' END, INC. (LE)·Q3 2025 Earnings Summary