Andrew McLean, Chief Executive Officer, stated, "Our first quarter results reflect a business with real underlying momentum. Consumer traffic was up double digits, new customer acquisition improved, and our European business delivered strong double-digit revenue growth, confirmation that our solutions-based strategy is resonating with customers. We experienced a temporary operational disruption tied to our U.S. distribution center upgrades which caused a timing issue, and it is behind us. Additionally, we delivered year-over-year improvement in both adjusted net income and adjusted earnings per share."
McLean continued, "Looking forward, the creation of the joint venture with WHP Global marked a genuine inflection point for Lands' End and positions us to deliver outstanding shareholder value. Whether from the continued growth of our existing commercial operations, a much more favorable capital structure with no term-loan debt, the Board's April authorization of a $100 million share repurchase program, the profit-share we'll receive from the JV or the potential exchange of our JV stake into equity in WHP Global at the same multiple WHP receives in a qualifying monetization event, the opportunity in front of Lands' End has never been clearer, and we are committed to building on our successes and focused on delivering on the potential in this great American company."
First Quarter Financial Highlights
Net revenue was $238.9 million for the first quarter of 2026, a decrease of $22.3 million or 8.5% from $261.2 million during the first quarter of 2025. The decrease in revenue was driven primarily by the temporary disruption associated with the rollout of a new warehouse management system and the deliberate pacing of shipments as the distribution centers ramped back to normal capacity. Excluding the impact of the temporary disruption, the Company estimates it would have delivered low single-digit revenue growth in the quarter.
U.S. Digital Segment Net revenue was $205.1 million for the first quarter of 2026, a decrease of $22.6 million or 9.9% from $227.7 million in the first quarter of 2025.
U.S. eCommerce Net revenue was $153.3 million, a decrease of $17.4 million or 10.2% from $170.7 million in the first quarter of 2025. The decrease was driven by the temporary disruption associated with the rollout of the new warehouse management system and the deliberate pacing of shipments as the Company ramped its distribution centers back to normal capacity.
Outfitters Net revenue was $38.5 million for the first quarter of 2026, a decrease of $4.4 million or 10.3% from $42.9 million in the first quarter of 2025. The decrease was driven by the temporary disruption of the new warehouse management system. Customer orders from the business uniform channel remained strong primarily driven by select enterprise accounts.
Third Party Net revenue was $13.3 million, for the first quarter of 2026, a decrease of $0.8 million or 5.7% from $14.1 million during the first quarter of 2025. The decrease was primarily due to a strategic focus on higher-margin, higher-quality sales, prioritizing brand integrity over lower-value, promotion-driven volume.
Europe eCommerce Net revenue was $20.5 million for the first quarter of 2026, an increase of $2.6 million or 14.5%, from $17.9 million during the first quarter of 2025. The increase was primarily due to strategic shift to a franchise-first assortment simplifying the business and improving inventory efficiency.
Gross profit was $111.5 million for the first quarter of 2026, a decrease of $21.2 million or 16.0% from $132.7 million during the first quarter of 2025. Gross margin decreased approximately 410 basis points to 46.7% in the first quarter of 2026, compared with 50.8% in the first quarter of 2025. The gross margin decrease was primarily driven by the deleverage created by the temporary distribution center disruption, the new royalty structure associated with the WHP Global JV and continued tariff headwinds.
Selling and administrative expenses increased $3.0 million to $126.5 million or 53.0% of Net revenue in the first quarter of 2026, compared with $123.5 million or 47.3% of Net revenue in the first quarter of 2025. The approximately 570 basis point increase was driven by deleverage from lower net revenue and investment in digital marketing focused on new customer acquisition.
Net income was $330.7 million, or $10.56 earnings per diluted share first quarter of 2026 compared to Net loss of $8.3 million or $0.27 loss per diluted share in the first quarter of 2025. The Net income result was primarily driven by the WHP Global transaction.
Adjusted net loss was $3.5 million and Adjusted diluted loss per share was $0.11 in the first quarter of 2026, compared to Adjusted net loss of $5.4 million and Adjusted diluted loss per share of $0.18 in the first quarter of 2025.
Adjusted EBITDA was $(6.2) million in the first quarter of 2026, a decrease of 165% compared to $9.5 million in the first quarter of 2025.
Balance Sheet and Cash Flow Highlights
Cash and cash equivalents were $23.1 million as of May 1, 2026, compared to $18.1 million as of May 2, 2025.
Inventories were $299.9 million as of May 1, 2026, and $262.4 million as of May 2, 2025, representing a 14% year over year increase. That increase primarily reflects the timing effects of the distribution center ramp-up and the unmitigated impact of tariffs. As operations normalize and inventory flow improves, the Company expects inventory levels to become better aligned with the Company's revenue trajectory.
Net cash used in operating activities was $74.2 million for the 13 weeks ended May 1, 2026, compared to net cash used in operating activities of $22.5 million for the 13 weeks ended May 2, 2025. The increase in net cash used in operating activities was primarily due to the impact of the closing of the WHP Global transaction and partially offset by increased inventory related to the temporary distribution center disruption.
As previously announced, the Company used the majority of the $300 million in cash proceeds from the WHP Global transaction to fully repay its term loan.
As of May 1, 2026, the Company had $30.0 million of borrowings outstanding and $104.2 million of availability under its ABL Facility, compared to $40.0 million of borrowings and $86.8 million of availability as of May 2, 2025.
During the first quarter of 2026, the Company repurchased $0.3 million of the Company's common stock under the share repurchase program announced on April 1, 2026. As of May 1, 2026, additional purchases of up to $99.7 million could be made under the current program through March 31, 2029.
Outlook
Bernie McCracken, Chief Financial Officer, stated, "Our first quarter financials reflect three distinct factors: the temporary disruption from our distribution center upgrade, structural P&L changes following the WHP Global transaction, and continued tariff pressure. Absent the operational disruption, we estimate we would have delivered low-single-digit revenue growth. In Europe, where distribution was not affected, revenue grew 15% and gross margin expanded approximately 70 basis points, evidence of the underlying health of the business."
McCracken continued, "The full repayment of our term loan has significantly strengthened our balance sheet and reduced our interest burden. Importantly, this step provides enhanced financial flexibility to capital allocation, including reinvestment in the business and returning capital to shareholders."
The Company's guidance reflects current conditions, including tariffs at currently implemented rates and prevailing macroeconomic factors.
For Second Quarter fiscal 2026 the Company expects:
Net revenue to be between $290.0 million and $310.0 million.
Net loss to be between $5.0 million and $2.0 million and diluted loss per share to be between $0.16 and $0.06
Adjusted net income to be between $2.0 million and $5.0 million and Adjusted diluted earnings per share to be between $0.06 and $0.16.
Adjusted EBITDA in the range of $11.0 million to $14.0 million.
For fiscal 2026 the Company now expects:
Net revenue to be between $1.30 billion and $1.40 billion.
Net income to be between $310.0 million and $320.0 million and diluted earnings per share to be between $10.02 and $10.34.
Adjusted net income to be between $10.0 million and $20.0 million and Adjusted diluted earnings per share to be between $0.32 and $0.65.
Adjusted EBITDA in the range of $68.0 million to $78.0 million.
For the full year, the Company's guidance includes approximately $40.0 million of capital expenditures.
Enhanced Earnings Conference Call
The Company will host an enhanced earnings conference call on Tuesday, June 9, 2026, at 8:00 am ET to review its first quarter financial results. The enhanced earnings conference call will also include discussion of the Company's strategy following the closing of its joint venture transaction with WHP Global and the potential value creation opportunities from that transaction. The call may be accessed through the Investor Relations section of the Company's website at http://investors.landsend.com.
About Lands' End, Inc.
Lands' End, Inc. (NASDAQ:LE) is a leading digital retailer of solution-based apparel, swimwear, outerwear, accessories, footwear, home products and uniforms. Lands' End offers products online at www.landsend.com, through third-party distribution channels and our own Company Operated stores. Lands' End also offers products to businesses and schools, for their employees and students, through the Outfitters distribution channel. Lands' End is a classic American lifestyle brand that creates solutions for life's every journey.
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding the transactions (the "Transactions") by and among the Company, Lands' End Direct Merchants, Inc., a wholly owned subsidiary of the Company (together with the Company, "Sellers"), WH Borrower, LLC, WHP Topco, L.P. ("WHP Topco") and LEWHP LLC, a wholly owned indirect subsidiary of WHP Topco and the related joint venture ("JV") and the potential value creation opportunities and benefits of the Transactions and the JV, profit sharing from the JV, a potential exchange of Company's JV stake for equity in WHP Global and the likelihood, impact and value of a potential future WHP monetization event; the Company's strategy following the closing of the Transaction; the impact of repayment of the term loan, including reinvestment and returning capital; Company business momentum and strategy; continued growth; favorability of the Company's capital structure; the share repurchase program and its anticipated scale and impact; future opportunity, expectations for building on success and delivering on potential; expectations regarding inventory, revenue and tariffs; and the Company's Q2 and full fiscal year 2026 outlook and expectations as to Net revenue, Net income (loss), Adjusted net income, Adjusted diluted EPS, Adjusted EBITDA and capital expenditures. These forward-looking statements are based on beliefs and assumptions made by the Company's management using currently available information. These statements are not guarantees of future performance, actions or events and are subject to risks and uncertainties. If one or more of these risks or uncertainties materialize, or if the Company management's underlying beliefs and assumptions prove to be incorrect, actual results may differ materially from those contemplated by a forward-looking statement. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. The following important factors and uncertainties, among others, could cause actual results to differ materially from those described in these forward-looking statements: uncertainty of the expected financial performance of the JV; the effects that a termination of agreements governing the Transactions (including the License Agreement) may have on the Company; risks related to the Company's ability to realize the anticipated benefits of the Transactions, including the possibility that the expected benefits from the Transactions will not be realized; the ability of the JV, WHP and the Company to implement their business strategies; risks relating to the occurrence of an IPO, change of control or significant asset sale of WHP Topco (an "exchange event"), which is out of the Company and its stockholders' control, to realize value from the Company's exchange rights, and the possibility that such exchange event may never occur, or if it does occur, the possibility that it occurs on unfavorable terms, including economic terms; the possibility that one or more of the agreements governing the Transactions may contain provisions that are difficult to enforce and the possibility of legal disputes between Sellers and WHP Topco and its affiliates that could delay realization of the full benefits of the Transactions; the possibility that any exchange event could be structured in a manner and on terms and conditions that are disadvantageous to the Company and its stockholders; the possibility that the contribution of the Company's intellectual property into the JV may not achieve the anticipated results, particularly if such intellectual property is not monetized effectively; the risk that WHP's past performance may not be representative of future results; uncertainties relating to the JV's ability to maintain the Company's brand name and image with customers; uncertainties relating to the JV's ability to respond to changing consumer preferences, identify and interpret consumer trends, and successfully market new products; uncertainties regarding the Company's and the JV's focus, strategic plans and other management actions; the stock repurchase program may not be executed to the full extent within its duration, due to business or market conditions; the ability of the Company's principal stockholders to exert substantial influence over the Company; the Company's results may be materially impacted if tariffs on imports to the United States increase and it is unable to offset the increased costs from current or future tariffs through pricing negotiations with its vendor base, moving production out of countries impacted by the tariffs, passing through a portion of the cost increases to the customer, or other savings opportunities; global supply chain challenges and their impact on inbound transportation costs and delays in receiving product; disruption in the Company's supply chain, including with respect to its distribution centers, third-party manufacturing partners and logistics partners, caused by limits in freight capacity, increases in transportation costs, port congestion, other logistics constraints, and closure of certain manufacturing facilities and production lines due to public health crises and other global economic conditions; the impact of global economic conditions, including inflation, on consumer discretionary spending; the impact of public health crises on operations, customer demand and the Company's supply chain, as well as its consolidated results of operation, financial position and cash flows; the Company's ability to offer merchandise and services that customers want to purchase; changes in customer preference from the Company's branded merchandise; customers' use of the Company's digital platform, including customer acceptance of its efforts to enhance its eCommerce websites, including the Outfitters website; customer response to the Company's marketing efforts across all types of media; the Company's maintenance of a robust customer list; the Company's retail store strategy may be unsuccessful; the Company's Third Party channel may not develop as planned or have its desired impact; the Company's dependence on information technology; failure of information technology systems, including with respect to its eCommerce operations, or an inability to upgrade or adapt its systems; failure to adequately protect against cybersecurity threats or maintain the security and privacy of customer, employee or company information and the impact of cybersecurity events on the Company; fluctuations and increases in costs of raw materials as well as fluctuations in other production and distribution-related costs; impairment of the Company's relationships with its vendors; the Company's failure to compete effectively in the apparel industry; legal, regulatory, economic and political risks associated with international trade and those markets in which the Company conducts business and sources its merchandise; the Company's failure to protect or preserve the image of its brands and its intellectual property rights; increases in postage, paper and printing costs; failure by third parties who provide the Company with services in connection with certain aspects of its business to perform their obligations; the Company's failure to timely and effectively obtain shipments of products from its vendors and deliver merchandise to its customers; reliance on promotions and markdowns to encourage customer purchases; the Company's failure to efficiently manage inventory levels; unseasonal or severe weather conditions; natural disasters, political crises or other catastrophic events; the adverse effect on the Company's reputation if its independent vendors or licensees do not use ethical business practices or comply with contractual obligations, applicable laws and regulations; assessments for additional state taxes; incurrence of charges due to impairment of other intangible assets and long-lived assets; the impact on the Company's business of adverse worldwide economic and market conditions, including inflation and other economic factors that negatively impact consumer spending on discretionary items; global economic, political, legislative, regulatory and market conditions (including competitive pressures), evolving legal, regulatory and tax regimes, including the effects of tariffs, inflation and foreign currency exchange rate fluctuations around the world, the challenging consumer retail market in the United States and around the world and the impact of war and other conflicts around the world; and other risks, uncertainties and factors discussed in the "Risk Factors" sections of the Company's Annual Report on Form 10-K for the fiscal year ended January 30, 2026 as updated by the Company's Quarterly Reports on Form 10-Q. The Company intends the forward-looking statements to speak only as of the time made and does not undertake to update or revise them as more information becomes available, except as required by law.
CONTACTS
Lands' End, Inc.Bernard McCrackenChief Financial Officer(608) 935-4100
Investor Relations:ICR, Inc.Tom Filandro(646) 277-1235[email protected]
-Financial Tables Follow-
LANDS' END, INC.Condensed Consolidated Balance Sheets(Unaudited)
(in thousands, except per share data)
May 1, 2026
May 2, 2025
January 30,2026*
ASSETS
Current assets
Cash and cash equivalents
$
23,122
$
18,139
$
17,694
Restricted cash
458
2,178
589
Accounts receivable, net
33,788
36,023
41,265
Inventories
299,923
262,372
268,803
Prepaid expenses
34,257
38,237
27,856
Other current assets
1,200
8,180
4,798
Total current assets
392,748
365,129
361,005
Property and equipment, net
120,581
116,010
115,701
Operating lease right-of-use asset
14,815
19,450
15,680
Equity method investment
375,758
—
—
Intangible asset
—
257,000
—
Asset held for sale
—
—
257,000
Other assets
1,798
2,906
1,680
TOTAL ASSETS
$
905,700
$
760,495
$
751,066
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt
$
—
$
13,000
$
13,000
Accounts payable
119,288
95,077
115,436
Lease liability, current
4,456
4,462
4,434
Accrued expenses and other current liabilities
125,545
83,963
