Lands' End (LE) 5 Dec 242025 Q3 Earnings call transcript

Good day, everyone, and welcome to today's Lands' End 3Q Earnings Call. [Operator Instructions] Please note this call is being recorded, and I will be standing by if you need any assistance. It is now my pleasure to turn the conference over to Tom Altholz.

Good morning, and thank you for joining the Lands' End earnings call for a discussion of our third quarter 2024 results, which we released this morning and it can be found on our website, landsend.com. I'm Tom Altholz, Lands' End's Senior Director of Financial Planning and Analysis, and I'm pleased to join you today with Andrew McLean, our Chief Executive Officer; and Bernard McCracken, our Chief Financial Officer. we a remarks, session. prepared the will question-and-answer conduct After about the includes Please that we're to also note information discuss forward-looking statements. Such and uncertainties. risks statements involve on The from could results this discussed company's call. differ actual those materially to such items on including Form quarterly those included our Factors that report and could differences but Form limited noted SEC are company's the reports on XX-Q. include, in annual to, not filings, and contribute XX-K by today, The company's the we that forward-looking provided company the any of is call by us. undertake the outlook this not as update forward-looking and made on do represents to information obligation statements Subsequent company's outlook and to may events cause developments change. the

During found copy a over Relations landsend.com. can prepared the will of earlier earnings the measures to this measures. of not in non-GAAP of accordance turn GAAP to which our the most With with our non-GAAP be financial issued directly accounting Investor be call, posted website reconciliation Andrew. at we in comparable I generally referring section A are These release today, non-GAAP measures in measures that, accepted will principles. to is call

Thank you, for thank and today. us Tom. Good joining morning, you

million, and of to the the solutions a and increase wide-ranging percentage strategy, existing customer quality year-over-year execution we new and classic Through Our third creates by to continued XXXX brand strategy a dollars our in gross revenue quarter of evolution further also our of items. strong At throughout third lifestyle the programs to net leveraging looking same drive delivered our sales. marketing Paired at EBITDA rate. our higher in greater profit growth every focus assortment to the across and personalization $XX our inventories, for adjusted are that new in XX% was XX% in with gross performance the our drive of In solidifying and of a delivered of the greater customers we execution, a journey we're solutions-based engage position inventory buying double-digit third position best we innovative year. quarter, characterized of year-over-year and increase the in our tactics, in including When customers third double-digit American quarter, fresh, a million, low our $XXX time, on-trend we're attracting the margin and In continuing GMV. life's our our churn efforts as growth drove results. and quarter. yield improvement

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younger customer substantially the up much customer customer. than customers' quarter, largely by our acquisition and are acquisition year-over-year totes new driven sales for new consumers total from outpaced our result, a typical As overall

for XX% to year. season. gifts in efforts, in compared it Thanks great drove December make delivered our mid-teens to new quarter. monogrammed a the for yours to marketing Our holiday we when and new-to-file growth increase order our the percentage by customers in totes we've year-to-date, Xth customer time get everyone in And third acquisition last

to Turning product.

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As collaboration we implementing we partners. supporting planning execution the of last new of to in increase and our are the process ERP quarter, discussed strategy, a business our and the with across

businesses. various Turning to our the performance of

discuss consistent of activities. business in of now brand, channels. BXC evolution our BXB our our and with reminder, with a Beginning the we As BXC terms

an Our improvement XXX U.S. of increase quarter its with consecutive e-commerce basis points. approximately business of seventh margin delivered

As and of growth a to improved management. new-to-file promotions, a continued sales, result inventory higher drive our approach and to which customer more evolved measured quality strategy marketing

We margin the paid strong to lower continue moments. plan I'll events contributed which gross in to few with efforts of in well performance. off strategy holidays activity, so our discuss the levels quarter. a Our did maximize promotional these our to key third into

time, in and margin momentum same driving and the elevated This with We our to our offsetting and its continent, begun region. knits. continued outside expansion, customer of consumer of profit quarter, geographic brand balanced the XX% both price about customers to full confident on across business, weather-proof Germany, more UK new continuing approximately at sales while third new both Europe of performance points outerwear expectations headwinds trajectory the look the to offering and the business with its remain XXX more the during efforts attracting exceeded gross are margin existing than have focus up international acquisition and basis and in gross year-over-year. European at inside the gross Our up

third-party. to Turning

to our with partners of brand. on focusing individual share in assortments vision working tailored strategy We our for continue our elevate and see to and that both marketplaces solutions customer-focused success

Our quarter, the We're Lands' traction great partnership significant outerwear. price further proof Online with launched the full our in on recently seeing brand. well is third as that performed elevated Nordstrom driven strengthening End platform, Marketplace by position an with selling

quarter. licensing. to in to the on Now continued third Licensing grow

relevancy be base part licensing and of customers. asset-light to large a our continues brand strategy, our customer Our acquisition a of our boost strategy helping with attractive to evolution powerful

quarter. to the expect fourth we continue Our in clubs channel performed strength well, and that

XXXX, arrangements growth-oriented in continue channel actively results license additional Looking are to we negotiating this at believe that and the provides. capital-light

the reach our broader on us base. While licensing royalties we share a business to recognize consumer double-digit overall low market allowed GMV fulfillment this with and much build associated only and brand drive fees P&L, growth,

BXB our Outfitters to Turning business.

BXB sales during market hit our reorganized its catalog business travel in business website and Our health-related customer sectors. these began with banking, our and to the to emphasizing relaunched built our We We quarter. contemporary leading categories. more stride team new a segment-oriented feel emphasize positions pipeline, substantial a and

our with our our BXC turning, channels, assortments the competence elevated managing BXB expand key strong business for in and of and we recognize primarily branches. due outfit approximately Fargo partnership across product channel in employees elevate us wins, including over we X,XXX channel year-over-year, from impact increased capabilities, Revenue our quicker uniform ramp-up the seeing asset-light, as customers our As speed-to-market are to to Wells XX,XXX faster business. X%

revenues well-defined pursue have about we the leveraging a of Uniform channel, their peak are ambitious both a the parent leading relatively we and our to and Looking this had meet market provide were new barriers uniform deliver believe to forward in recurring change. growth with further terrific to existing customers. to We're end both the market and again, channel high Once the share we ahead, purchasers. school and and look position expectations season. able continue on and School provider the to seasonal customers it to

existing provided significant meaningful uniform to since revenue of Their team Our to has opportunity been the this a to a add the in I'm turn accommodating with it incremental third school on quarter sales over reassure deliver busy now and exit player. school our End amount Lands' I'll discuss to notably detail. diligence Bernie uniforms performance taking while to have moment the continue our we industry of that to the has more business. also business. profit our capabilities promise October customers customers, to

you, Thank Andrew.

range decrease grew guidance impact digits adjusted quarter, performance middle year. our For compared delivered results We a GMV of only guidance. year. our a by range the within to third in and exceeded million, efficiency which XXXX, of in of guidance double products prioritize low top sheet excluding quarter balance These total year-over-year. the to single which total our last third quarter, licensing at of the footwear the million to the increase increased third came XX% line. and for versus agreements, $XX over kids of $XXX at came transitioning profitability efforts last digits and continued When the our EBITDA was reflect revenue low revenue the X%

business. newness continue We allowed third reinvest XXXX. point the straight continue driven Gross improvement The improvement XXX the to our of last us Gross in margin in business driven profit basis third seventh by our quarter and across by has to increased quarter margin year, XX%, of to improve compared activity. promotional the to by across assortment lower X% units, gross profit margin was which was expansion. an the margin approximately from quarter

sales third compared U.S. business a Our XXXX. of saw the to decrease X% e-commerce of quarter

increased driven We prioritize a sales. footwear, quality U.S. Excluding continued in and higher efforts to e-commerce X% increase low the sales dollars year-over-year. profit gross kids impact double of digits by generated

XXX increased timing our down compared were increased that basis we Wells season sales prior approach back-to-school higher-quality driven year. by to partnership to uniform the XX% high sales growth XXXX, third school of X% by this Consequently, to Sales X% and selling in Our year-over-year, the profit Fargo. gross Outfitters customer from channel channel of and has ramp-up Sales were over primarily from quarter of the seeing profit a orders profitable margin of our our X% European [indiscernible] primarily the by decreasing are third e-commerce driven business demonstrated with the gross compared from quarter benefits X% dollars year-over-year. approximately by the year-to-date. channel, year, XXXX. Sales uniform single-digit of with gross from last due business down points in

of profit to business business quarter to diversify compared Licensing by gross year-over-year. The and dollars increase due our the presence increasing third-party over the our marketplace generated partner. partners primarily arrangements. individual increased continue revenue reduce by XX% from licensing one any third risk XXXX, across with and third-party was revenue help Our X% to over to

increase an approximately points compared by was a percentage the in reinvesting acquisition. XXX on focused which of of SG&A through As primarily sales, spend driven higher was XX%, business new to XXXX, basis marketing digital customer

we of $X.XX For had the $X.X net was We loss guidance $X.XX quarter, million or which share, share. had million $X.X per income net third range. our or an within of a adjusted per

at third team's compared balance end year the increase with ago. of paired of XX% chain million Inventories position $XXX to drive our turns strategy assortment. from Moving sheet. in the to our a inventory $XXX to to our were supply million ongoing improvement efforts efficiencies our quarter benefited our The

quarter of terms had and which $XXX last million quarter, third million, was debt, of $XX lower our end the was our third outstanding, of million $XX loan year. borrowings the term In than ABL our the at

repurchased $X quarter, quarter. the the authorization the $XX repurchase of in share remaining under the million March, end During bringing to of of we announced worth million of the as balance our million authorization shares third $XX

guidance. Now moving to

cash selling during which between We low to million are gross and expect net prioritize flows, drive improved $XXX with and be margin and mid-single-digit expansion season. to continued In fourth expect to million, fall quarter, be gross or continuing revenue to holiday to merchandise sales value, the we profit growth. expected and high-quality GMV, we $XXX the

diluted and We $X.XX be expect per share an adjusted adjusted between to to million $X.XX. $XX and $XX earnings net million income of

$XX to expect million. the to of in be We range million adjusted EBITDA $XX

and range in net full growth. is to GMV to billion, to adjusted $X.XX million. $X.X $XX share million million to revenue We year, $X.XX now $XX the $XX we while EBITDA billion We $XX to to now the expect adjusted be For per expect of low to $X.XX. now between earnings be of million be net our diluted to adjusted expect expected mid-single-digit income of

guidance approximately million Our year $XX expenditures. for the incorporates capital full in

the moving we gross discussed, expect I Andrew. call margin inventory to our have we back to forward. at inventory enable expand further improved our As levels normalized work over to and that, maintain management turn With bolster us to

weekend. to our Black you, was I Cyber Lands' and is further read and saw our working. Friday, both season to engage Monday demonstration a the strategy and line expectations in the tenured discussing was Lands' longer on our visit, Thank holiday we kickoff purchase weekend, End. spend the with to Bernie. that End want This minute newer from initial customers directly Throughout

We licensed continued performance also our growth channels, saw balance business. in and our our strength across strong and products in marketplace

to we're season. the together, start the pleased with holiday Taken

Before we like updates to conclude, X I'd highlight team. our to leadership

I'd the for new End I where look our the she evolution like First, brand Kym role, a where brand. Product to part her Vice on congratulate President efforts. in Senior key Kym global in previously all contributions appointment elements of vision Chief our of forward End's Officer. her creative and leads Lands' served Maas to as she as Lands' Merchandising, Creative played future her

after Angie Rieger, consummate XXXX. Lands' Angie only Secondly, Chief has has wish well-deserved her Officer, leader years April End I we team, the our want adviser. who inventory to but retire her in announced October, the Transformation her instrumental effective On strategy, End, We become of that trusted to at for behalf Angie nothing entire execution a all is not our will best the XX over contributions. XX, a of been Lands' thank in retirement. but

we want employees the all forward are, wherever success. With the their brand, questions. As to the I always, your and to Lands' to dedication our thank continued for that, they company End of look

first Telsey with Dana question Group. our And from Telsey we'll take Instructions] [Operator

to you internal demographics product quarter, then and terms lastly, what well, fourth The new what you? getting your are the And percentage pricing promotional just was much are increase tariff the impact working out. mean and of of margins? -- weekend on more the any China, What customers? definitely China may the some and the given of versus are in your customer development? new a fact What How acquisition seeing kickoff how And these Black seeing XX% the in is of we're of Friday there? And you color it for the landscape call strength from of informing on this goods for external? thoughts it is

and the now kick X% real Dana. I'll buy. of chain We've worked of couple Great. into to to for open with some accounts supply last off put over than agility years, China, our China less our

been progressively towards moving have Hemisphere. We Western

be with view a We that we that have to to closer the get margin well. turn quicker the works product can customer, the taken model our we're able our really going and to

of So pressure assortment case. be around would we're not smaller but much cashmere, part If feeling tends specifically, be anything to it there's around our any a that in China.

couple new tend on the there. fourth we a good cohorts, of promotional back. new be our then tend about customer. the revolvers, go which prior seeing before kind And tends we items, a at we're same come traditional be So calls. They revolver to to in got out the to landscape of customer which wear customer, the who quarter. and together a If new it the we're look talked got really and the buy We've customer, we've come back,

reach to cultural who's it able influencers that and early having their late out our spoke see our third-party we target the pop-up stores. I XXs. to that see we're be with We really had XX sort the customers. a in extra as bags of our customer Soho to continue can avenues, business, where younger. adding our from years website, our We talk in XX in XXs sort all with tote They via coming to to tend them about because and revolvers of moment path we're the new to

come reach sort So halo a we're this perspective. and of new very group, fashion-forward and continuing to down they a with much

whole the that You're our that I there's see seeing we've And site, think time and on know parts in our fashion modernized you'll I on of there, spend assortment. that more assortment. you Dana.

pants something out I where appropriate modernize can resolver-based would probably which be know media trick this them. is customer. reaches to because cohorts and traditional who a pant, cohorts influencers both needing of pop-ups did to we a in working you traditional And want customer, critical. a It Land's would with newer End be be from, is customer. able the pop-up customer she's old or the use to as So reach marketing point, our of for newer and York, a we've for or them can customer it more is social together we I version it would revolver is that, more might influencer of able have a the fashionable even Facebook and We XX take want or years use buy [indiscernible], at existing called elevated these to we're use and to as X It if say our coming X version an would with of that family now so to these an be matter we them, moved where of the And we of buy absolutely have Starfish it Miami in on our we New we coats. them. actually you both customizing keep we of website to isn't they brand. want to both say, actually, lifestyle a pop-up there the via our more work traditional

promotional have being continue and to our margins. and far that business, in to we're landscape, to not the very the stay for managing to going which like gross inventories have landscape, promotional our promotional tightly, and can Dana. we drive firmly we're buy it, less going bringing the product past, on It's of terms into model In will we a than the is market been we we best

surprise So gross highest the the should come quarter it IPO. in going margin the as back all way was can I any the find to no third that that quarter

that's that, a pattern just win we that's that playing versus think I game. promotional the we'll with. continue see way a And to

question our from take We'll with next Research. SCC Eric

about a licensing. bit little Let's talk

split about where First us be of remind kind licensed have licenses licenses you more how what should of up product? What term, and you for want longer all, new talked the to the beyond could I when licenses. adding aggressively product for thinking And look you you criteria XXXX? you of about X is and of new the non-licensed And know kind here go? that coming of we between kind do

the was me what Sorry, Eric. last You there, up on part? broke

I'm sorry, products should in sold split versus term, of what longer be non-licensed between the product? amount licensed

It's XX%-XX% that I'll in an one. there. start rule with

I been think from for brand trying and probably should just same to control. you of doing and I've doing about my become to playing talked lot up many coming the X of licensees whole when if before licensees, it's I've just XX% much about about think manage to be what trying the XX a to licenses. challenge and beat. we Mostly, be you keep that concert career of over-licensed, start should the becomes too I you business. that to too between for give whole a this And have the

in ones we'll we've be of adding For licenses that the top XXXX. Home discussed, on starts

we noncore license to digital and provide our our go outside experience ourselves to evaluate can buy forward. at continue looking of the we've that selling to will merchandise didn't we just have the as be site, our able channels. home partner, our option although categories. own We We're from of But it on given we

areas like that that think continue lean in things at. we number things at would look is like into continue We I to space, one So There's that. to We we we'll that do beauty fragrance. a and can of luggage. at look look

to positive be a talking about, going the talked months We're we that's one The And as to we'll groups product, about channel like heavy the could partners up up reliance X balance one that license of and of start business for geographic. is the what start coming really very I look brand think more big other to out build that already American one and coming one that is over be towards you'll is The North international. to see think it international. that I we sort number that have. we potential and

established licensing just think attractive to all, criteria. to in my I've the not lot in asked And I this I've with wasn't of don't capture a the that on with of manufacturers space. points of deliver most, the And deals most me they're XX or this with The partner the that struggle economics the to think because particular, a the the you career seen criteria structure. on struggle where they're most whole of is first this you question they in seen went is, work has it. set reality out highest, be partner vendors able margin. going cost XX, about

ready to in. that with journey. we make to customers who view a kept. customer, have So we track proven shops have I product in licensed we importantly and promise who up we as have we licensed promise own space. mean a be have that every lean got established they need channels and And partners to It's to channels, shop or we the customer mesh as our the We've view can licensing just our in really, our then brand this record for they values.

the in I capital is came GMV where balance all, underscore We think behind royalty a the double-digit as and part. of like good model had that and P&L which So is just that's the say going would clearly and really combination And look going us be strong important company. to to sheet. a that, through that, and to licensing our us. we're to to minimum at going it numbers growth it materially payments. we be gives of protection asset-light economics, Obviously, longevity this, very important I to it a both

through in is to End gaining our So Lands' starting profitability. share and come market is very clearly

Great. inventories. One last on one

like licensing inventories and How to is though the even It of there. you're actually the sounds tremendous be the manufacturing. kind resetting and should X done there inventories, still of more the You've reducing last where quarters listening reducing opportunities about kind spent the amount? we inventory thinking of probably in a job you've

Yes, expect inventory normalize to levels forward. Eric, we going

continue we more will able to, efficiencies chain our it supply built where balance to on that, be Andrew and processes, and as and trend. be our As nearshore not product have to some to said, be to improve there into buy able infrastructure sheet we'll have closer our

we're about as as forward. But can inventory of build now our think we our being excited you levels So that those going normalized forward levels going efficiencies.

We'll take Group. Fuhrman our Capital Alex with from next Craig-Hallum question

a what GMV Congratulations a little move and simple a could seems has matter revenue a range, promotional being ask Or just on quarter lot a season guidance, small retailers wanted within GMV, revenue is of drill the there about like a holiday we the strong Is like guidance to just I during the at it despite versus the little what been it? a bit pretty into it lower here. just midpoint. lower albeit to explanation looks of if that's bit all guidance lower prior there a is there? for

course, impact e-commerce kids to of licensing the transitioning has U.S. footwear Eric, arrangements. and our our products Yes, of

business. year-on-year So But those naturally, will lower be heavier into in lean businesses the revenue QX. that

GMV does as little product. be branded but there'll revenue QX, businesses affect more a be the End selling effect in So Lands' not that those will on line

on be and increase on strong or now? Are in year to year level good spending very to feel that. for next do future Okay. That's years you helpful, to guys lot been over a Or you more opportunities a marketing there pretty spending you base? getting a seem have continue then big off like so, this of and return Bernie. found last And marketing the marketing just picture,

investing year the in spent marketing. our We've

you forward. customer can we business a expect As a drive driven additional to very flywheel nice and new that tell going create it's acquisition, which

As expect an spend we flywheel keep equal additional then on going. still to of a generate percentage those that that, we revenues, marketing to percentage

we'll in to So will that going -- as and over this some basis, leveraging start margins think on improve of then we've our and be that I start acquisition. we customer the a feel to marketing it that we stay we'll year, able gross able new And percentage be forward. investing spent strongly

We'll Silver take question from our Argus last with Research. Steve

I rollout about was of the the third-party business. curious

parties. coming curious acquisitions QX, you couple just lot channels? in expansion third-party double-digit these to that last what much long roster, of the the take of a these others. customer guys talked expect attribute in of to versus you of to as that translate to you're the to the to capturing about I'm as your from about And expansion other in Costco, GMV been how businesses new which to the I'm increased talk to Nordstrom versus organic from including there's previous in End of a you of trying curious kind terms third increase data of in the Over get quarters, into terms will sense and traffic as among of the you website, third-party percentage Lands' that have is how quarters.

questions. great Yes. of a It's couple

interesting We a summer, customer. expectations. each is first to started businesses take that and one on Nordstrom's our the all me Let been specific these What's tailoring third-party business. of it exceeded we're has in the the

the So and an we will from price merchandise point. accordingly assortment both

that So up for a resource with only able already a example, be for that on opened really new actually we're customer Nordstrom, Nordstrom's for we've we're there's very there. us. moment, And and school, the at found avenue school it's to finding strong

and website lag we quite that website, And onto we see curtail but Nordstrom use End to because make inventory, seeing specific the those we back. the then there find Lands' the a is curtail it do way them so the customers from we their between assortment. We

a customers. spend we one the party third of be lot and see grab data, this, biggest do which we areas to from data Our of on

length. this and inventory. supply a arm's Now But partner to manage that is specifically with part It's license a we which Nordstrom's managed where from Costco, from Costco relationship ourselves, very there's that inventory. is partner our second a supply question, Costco. that's our

data. us it's to get So the for harder

and as to in brand there, like-minded very us the being it. and Here's try go our of Having a we ways. given opens see the of almost that as back and see like-minded look percentage up owning we those to we of of But of for a view presents against that that consumer but many is from And the come fast nature to a don't the store customer, party. the how the club, if third benefit customers example, shopping tie very I survey retailers agreement and much insights existing a hard we it Costco, through. demographics up licensing that growing a have in do match in as not them do a terms given length retailer it at our we that Costco there's while and new versus just consumer. see view And manifestation and able coming to the much arm's together, physical

And with of over to shopped marketplaces to either Lands' haven't years. customers XX% our in Steve, or add never are sales End Yes. shopped have on marketplaces, new the who customers X in that, on from

from So we Andrew says, then fulfilling a new of our benefit the are customer of it's And that the is product there. we're inventory. single source attracting as marketplace,

And those from. excited journeys Is customer understand it's that year into a that is a which inventory, their from and it importantly, customer customer is our as truly journey knowing only marketplace? to what we're that So very a next two, one, same standpoint years de-risks we're from. that from are on it of data that or analytics our we're it keep starting couple customer, on information landsend.com? to we getting but the acquisition and Is that is more where purchase expanded build learning for marketplace

we're XXX,XXX followers Instagram. our come a many seeing have on journey And We're avenues. only And year customers really from we into now.

able before. from never them to So we're where places see customers we've seen

event an So necessarily coming fourth they what the Bernie so We've customers we're that into is and new journey. much why quarter from buyers in quarter come they're about third the file are buyer. they're seeing about venues, It's saying we're is They occasion many excited they're than to against in, more invested and the understanding that right. about younger. customer where

transferring margins us continue I and we'll is think intent much, for high to that so. do through to much really stronger

participation. teleconference. today's for concludes that And Thank you you. Thank your

may You disconnect. now