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LE

LANDS' END, INC. (LE)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2024 (13 weeks ended Jan 31, 2025) delivered margin-led upside despite lower revenue: gross margin expanded ~760 bps to 45.6% with gross profit up 3% YoY; adjusted EBITDA rose to $43.7M, while GAAP EPS improved to $0.59 and adjusted EPS to $0.57 .
  • Net revenue declined 14.2% YoY to $441.7M, primarily from transitioning kids/footwear to licensing and lower promotional intensity; on an adjusted basis (excluding 53rd week and licensing shift), revenue fell ~3.5% .
  • FY2025 outlook guides to $1.33–$1.45B revenue, adjusted EPS $0.48–$0.86, and adjusted EBITDA $95–$107M; Q1 FY2025 guided to $260–$290M revenue and adjusted EBITDA $9–$12M .
  • Potential stock catalysts: continued gross margin expansion on “higher-quality” sales; scaling asset-light licensing ($150M+ GMV run-rate); marketplace momentum (Amazon/Nordstrom); and a Board-initiated strategic alternatives review announced Mar 7, 2025 .

What Went Well and What Went Wrong

What Went Well

  • Margin-led beat: gross margin up ~760 bps YoY to 45.6%, driven by lower promotions, stronger product newness, and better inventory management; adjusted EBITDA rose to $43.7M (+38% YoY) .
  • Licensing momentum: management highlighted a $150M+ GMV licensing business with high margins, expanding brand reach through asset-light partnerships and upcoming category launches (hosiery, intimates, base layers, travel accessories) .
  • Marketplace/channel execution: Amazon delivered records (men’s Bedford quarter-zip up ~300% YoY; strong Black Friday/Cyber Monday) and Nordstrom recorded the highest AOV/AURs for Lands’ End .

What Went Wrong

  • Top-line contraction: Q4 revenue fell 14.2% YoY to $441.7M, with US eCommerce down 18.7% and Europe eCommerce down 21.6% (GAAP), reflecting licensing transition and reduced promotions .
  • Europe underperformed: European eCommerce missed expectations; while gross margin improved ~310 bps, the go-to-market approach is being recalibrated for 2025 .
  • SG&A deleverage: although SG&A dollars fell $14.6M YoY, SG&A as % of revenue rose ~230 bps to 35.8% due to revenue decline (mix/promotion strategy) .

Financial Results

Quarterly results vs prior quarters (oldest → newest)

MetricQ2 FY2024Q3 FY2024Q4 FY2024
Revenue ($USD Millions)$317.2 $318.6 $441.7
Gross Margin %47.9% 50.6% 45.6%
Gross Profit ($USD Millions)$151.9 $161.1 $201.3
Adjusted EBITDA ($USD Millions)$17.06 $20.27 $43.69
GAAP Diluted EPS ($)-$0.17 -$0.02 $0.59
Adjusted Diluted EPS ($)-$0.02 $0.06 $0.57

Q4 YoY comparison

MetricQ4 FY2023Q4 FY2024YoY Change
Revenue ($USD Millions)$514.9 $441.7 -14.2%
Gross Margin %38.0% 45.6% +760 bps
Gross Profit ($USD Millions)$195.4 $201.3 +$5.9M
Net Income ($USD Millions)-$8.6 $18.5 +$27.1M
Diluted EPS ($)-$0.27 $0.59 +$0.86
Adjusted EBITDA ($USD Millions)$31.68 $43.69 +$12.01M
Adjusted Diluted EPS ($)$0.25 $0.57 +$0.32

Segment net revenue (Q4)

Segment ($USD Millions)Q4 FY2023 (GAAP)Q4 FY2024 (GAAP)YoY %
US eCommerce$366.5 $297.8 (18.7)%
Outfitters$53.7 $49.0 (8.8)%
Third Party$37.2 $35.1 (5.6)%
US Digital Segment$457.4 $381.9 (16.5)%
Europe eCommerce$38.4 $30.1 (21.6)%
Licensing & Retail$19.1 $29.7 +55.5%
Consolidated$514.9 $441.7 (14.2)%

Note: Company also provides adjusted comparatives excluding the 53rd week and licensing transition (Adj. consolidated: $457.5M; Q4 FY2024 vs Adj. Q4 FY2023 down 3.5%) .

KPIs and balance sheet snapshots

KPIQ3 FY2024Q4 FY2024
GMV YoY growthLow-double digits Low-single digits decline; ex-53rd week increased low-single digits
Cash & Equivalents ($M)$30.4 $16.2
Inventory ($M)$335.9 $265.1
Term Loan Debt ($M)$250.3 $247.0
ABL Borrowings / Availability ($M)$60.0 / $90.3 $0.0 / $129.3
Share Repurchase ($M)$4.0 $2.7

Guidance Changes

FY2025 and Q1 FY2025 guidance

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net RevenueQ1 FY2025N/A$260–$290M N/A
GMV GrowthQ1 FY2025N/AFlat to low-single digits N/A
Net (Loss) / EPSQ1 FY2025N/ANet loss $(9)–$(6)M; Diluted LPS $(0.29)–$(0.19) N/A
Adjusted Net (Loss) / LPSQ1 FY2025N/A$(7)–$(4)M; $(0.22)–$(0.13) N/A
Adjusted EBITDAQ1 FY2025N/A$9–$12M N/A
Net RevenueFY2025N/A$1.33–$1.45B N/A
GMV GrowthFY2025N/AMid-to-high single digits N/A
Net Income / EPSFY2025N/A$8–$20M; $0.25–$0.64 N/A
Adjusted Net Income / EPSFY2025N/A$15–$27M; $0.48–$0.86 N/A
Adjusted EBITDAFY2025N/A$95–$107M N/A
Capital ExpendituresFY2025N/A~$30M N/A

Q4 FY2024 guidance vs actual

MetricCompany Guidance (Dec 5, 2024)ActualResult
Net Revenue ($M)$440–$480 $441.7 In line (low end)
GAAP Net Income / EPS$18–$21M; $0.58–$0.67 $18.5M; $0.59 In line
Adjusted Net Income / EPS$16–$19M; $0.51–$0.61 $17.7M; $0.57 In line
Adjusted EBITDA ($M)$43–$47 $43.7 In line

Earnings Call Themes & Trends

TopicQ2 FY2024 (Prior)Q3 FY2024 (Prior)Q4 FY2024 (Current)Trend
AI/Tech & PersonalizationFocus on innovation; site enhancements referenced broadly Innovation, stronger digital marketing; holiday performance on plan Launched “wear it with AI” personalization, reskinned B2C/B2B sites; optimizing search/SEO for AI agents Scaling AI-driven personalization
Supply Chain & InventoryInventory down 21% YoY; supply chain cost improvements Inventory down 20% YoY; supply chain cost benefits Inventory down 12% YoY; continued speed-to-market optimization Ongoing efficiency and discipline
Tariffs/MacroTariff risks acknowledged (FLS) -Tariff risks acknowledged (FLS) -Less than 8% China exposure; outlook incorporates existing tariffs Managed risk; limited China sourcing
Product & Category—New customer growth; balanced holiday weekend performance Outerwear/fleece strength; tote-led acquisition; Amazon/Nordstrom success -Broadening franchises; channel wins
Regional TrendsIntl eComm +0.9% YoY Intl eComm -4.6% YoY Europe underperformed; strategy reset for 2025 Europe being recalibrated
LicensingThird-party growth aided by licensing Third-party +6.3% on licensing $150M+ GMV licensing; multiple new categories launching; asset-light margin lever -Accelerating, brand-accretive
Strategic Alternatives——Board initiated review (sale/merger options) Potential corporate action

Management Commentary

  • “We increased gross profit dollars, expanded gross margins and grew GMV each quarter of fiscal 2024…resulting in a return to profitability for the full year.” — Andrew McLean, CEO .
  • “Licensing is fueling significant expansion of our brand reach, anchored on a capital efficient, low risk, high margin financial framework.” -.
  • “Our wear it with AI tool provides a carousel of product, unique to every single customer… only the beginning as we… redesign… paid search and SEO… to better work with AI agents.” .
  • “Our European business did not meet our expectations… we are reflecting our learnings in our go-to-market strategy and execution in 2025.” .
  • “We are continuing to prioritize high-quality sales and improved cash flows… which we expect to drive continued gross profit and margin expansion.” — Bernie McCracken, CFO .

Q&A Highlights

  • Asset-light model and channel strategy: Management expects continued growth from licensing (kids/shoes already present; home on Amazon later in year; Kohl’s/Target swim; additional categories in back half) and differentiated marketplace strategies (narrow Amazon assortment; premium positioning at Nordstrom) .
  • Tariffs/sourcing risk: Company has <8% China exposure; guidance already reflects implemented tariffs; product mix adjustments (e.g., less cashmere, more merino/cotton) mitigate cost risk .
  • Promotional strategy and customer mix: Company pivoted away from heavy holiday discounting to build a more profitable, younger customer base; sale-oriented customers will be targeted via seasonal sale events, while broadening entry points across outerwear tiers to manage price sensitivity .
  • Catalog and personalization: Catalog reframed as a personalized marketing asset (58 variants annually), with shorter “nudge” formats and enhanced ROI focus; personalization viewed as a major industry driver .
  • GMV cadence: Q1 reflects tough compare from prior-year liquidation of kids/shoes; acceleration expected thereafter on a like-for-like basis .

Estimates Context

  • S&P Global consensus estimates for Q4 FY2024 and FY2025 were unavailable at time of analysis; as a result, we benchmarked performance versus company guidance rather than Wall Street consensus. Results for Q4 FY2024 came in at or near the low end of guidance ranges for revenue, EPS, adjusted EPS, and adjusted EBITDA .
  • Where estimates are needed for trading models, consider using management’s FY2025 ranges as anchors pending availability of refreshed consensus from S&P Global .

Key Takeaways for Investors

  • Margin quality over volume is working: Q4 gross margin +760 bps YoY to 45.6% with adjusted EBITDA +38% despite a 14% revenue decline; trajectory suggests continued gross profit dollar expansion in 2025 guided ranges .
  • Licensing is a structural EPS lever: $150M+ GMV licensing business scales brand reach at high margins and low capital intensity; multiple new categories/channels scheduled for back half -.
  • Channel mix tailwinds: Amazon and Nordstrom show distinct strengths (unit velocity vs. AOV/AUR), supporting blended profitability while landsend.com remains the “full assortment” anchor for lifetime value capture .
  • Europe is a watch item: Underperformance in Q4 requires GTM reset; any stabilization would be incremental to the margin story .
  • Balance sheet improving: Inventories down 12% YoY; no ABL borrowings at year-end; term loan nudged lower to $247M; cash lower QoQ but seasonal .
  • 2025 guide implies steady operating improvement: FY2025 revenue $1.33–$1.45B, adjusted EBITDA $95–$107M, adjusted EPS $0.48–$0.86; Q1 seasonally weak but sets up for YoY GMV acceleration post-Q1 .
  • Corporate action optionality: Board-initiated strategic alternatives review could re-rate the equity depending on process outcome .

Appendix: Non-GAAP Notes

  • Q4 adjustments included restructuring, exit costs tied to licensing transition, and a gain on property sale; adjusted EPS was $0.57 vs GAAP $0.59 .
  • FY2024 adjustments included long-lived asset impairments, restructuring, exit costs, and property sale gains; adjusted EBITDA reached $92.6M .

Additional Relevant Press Releases (Q4 FY2024 context)

  • Board initiated strategic alternatives (Mar 7, 2025) .
  • Confirmation of Edward S. Lampert letter urging a sale process (Feb 25, 2025) .