Q1 2025 Lands End Inc Earnings Call Transcript
Key Points
- Lands' End Inc (LE) reported a record gross margin rate for the quarter, reaching just shy of 51%, which is a 210 basis point increase from the previous year.
- The company successfully diversified its supply chain, reducing reliance on China to less than 8% of purchase order dollars, enhancing resiliency against tariffs.
- Lands' End Inc (LE) saw a 60% year-over-year increase in revenues from its licensing business, indicating strong growth potential in this area.
- The B2B Outfitters business met revenue and profit objectives, with strong performance in both enterprise and school uniform segments.
- The company improved its customer experience by launching a new AI-driven recommendation engine and expanding its SMS marketing program, adding nearly 400,000 new subscribers in Q1.
- Total revenue for the first quarter decreased by 9% compared to the previous year, with a 4% decrease when excluding the impact of transitioning inventory to licensees.
- Gross profit decreased by 5% year-over-year, despite the increase in gross margin rate.
- The European e-commerce business saw a significant 28% decrease in sales year-over-year as the company repositioned itself as a more premium brand.
- SG&A expenses increased as a percentage of sales by approximately 270 basis points due to deleverage from lower revenues.
- The company reported a net loss of $8.3 million or $0.27 per share for the first quarter, with an adjusted net loss of $5.4 million or $0.18 per share.
Good day, everyone and welcome to the Lands End first-quarter 2025 earnings call. (Operator Instructions) Please note this call may be recorded. (Operator Instructions) It is now my pleasure to turn the program over to Tom Altholz.
Good morning, and thank you for joining the Lands End earnings call for a discussion of our first-quarter 2025 results, which we released this morning and can be found on our website landsend.com.
I'm Tom Altholz, Lands End, Senior Director of Financial Planning and Analysis, and I'm pleased to join you today with Andrew McLean, our Chief Executive Officer; and Bernie McCracken, our Chief Financial Officer. After the prepared remarks, we will conduct a question-and-answer session.
Please also note that the information we're about to discuss includes forward-looking statements. Such statements involve risk and uncertainties. The company's actual results could differ materially from those discussed on this call.
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