Lands' End, Inc.

First-quarter net revenue was $239 million, down 9% year over year. Adjusted EBITDA was negative $6 million, down $16 million from the prior year. Gross profit decreased 16%, and gross margin was down 47%, about 410 basis points year over year, reflecting distribution-center disruption, the new royalty structure from the WHP JV, and tariffs. Adjusted net loss was $4 million, or $0.11 per share, versus adjusted net income of $5 million, or $0.18 per share, in Q1 2025. Inventory ended the quarter at $300 million versus $262 million a year ago, and ABL borrowings were $30 million versus $40 million last year. For Q2, the company guided to net revenue of $290 million to $310 million, adjusted net income of $2 million to $5 million, adjusted diluted EPS of $0.06 to $0.16, and adjusted EBITDA of $11 million to $14 million. For full-year 2026, guidance is net revenue of $1.3 billion to $1.4 billion, adjusted net income of $10 million to $20 million, adjusted diluted EPS of $0.32 to $0.65, and adjusted EBITDA of $68 million to $78 million. Capital expenditures are expected to be about $40 million. The company said it used the $300 million in WHP proceeds to fully repay the term loan, and the Board authorized up to $100 million of share repurchases through March 31, 2029.

Andrew McLean framed the quarter as an inflection point, saying underlying demand strengthened even though reported sales were temporarily dampened by distribution-center issues. He pointed to double-digit traffic growth, improving new-customer acquisition, strong swim and tote momentum, and a healthy Outfitters pipeline. He was also upbeat about the WHP partnership, describing it as a way to unlock licensing growth, improve financial flexibility, and create multiple layers of shareholder value.

Bernard McCracken focused on the mechanics behind the quarter and the new financial baseline. He said the shipment disruption, royalty structure, and tariffs drove the Q1 results, while the company still saw healthier underlying merchandise margins and better European profitability, with European gross margin up about 70 basis points. He highlighted the balance sheet reset: $300 million of cash proceeds were used largely to fully repay the term loan, interest expense fell materially, inventory was $300 million, and ABL borrowings were $30 million. He also restated the new full-year model around a hybrid operating business plus JV royalties, with Q2 and FY26 guidance as noted above.

Analysts focused on whether the DC/WMS disruption was truly over, how tariffs are being handled, the timetable and quality controls for WHP-era licensing, and what the $45 WHP tender price signaled. Management said the warehouse issue is behind them, the backlog was about one week and has been cleared, and they are back to shipping on time. On tariffs, they said they are booking at a 15% rate for prudence and have started receiving refunds on tariffs previously ruled illegal; on licensing, they said new licenses should start to kick in next year, with current agreements being extended first and WHP governance helping protect brand quality.