Lands' End (LE) Q1 2025 earnings summary

Executive summary

• Q1 2024 net revenue was $285.5 million, down 7.8% year-over-year; excluding the Delta Air Lines contract, revenue increased 1.0%.

• Gross margin improved by 410 basis points to 48.7%, driven by lower promotional activity, improved inventory management, and supply chain cost reductions.

• Net loss was $6.4 million ($0.20 per share); adjusted net loss was $6.2 million, both better than guidance.

• Adjusted EBITDA was $11.6 million, down from $19.5 million, but up 68.1% year-over-year excluding Delta.

• Inventory reduced by 23% year-over-year, supporting speed-to-market and new product introductions.

Financial highlights

• Gross profit increased 1% (11% excluding Delta), reaching $139.0 million, with gross margin at 48.7%.

• Selling and administrative expenses rose to $127.4 million (44.6% of revenue), reflecting higher digital marketing and deleveraging.

• Interest expense decreased to $10.3 million from $12.3 million due to lower ABL Facility balances.

• Net cash used in operating activities was $25.8 million, up from $10.8 million in Q1 2023.

• Cash and cash equivalents were $27.4 million at quarter-end.

Outlook and guidance

• Q2 2024 net revenue expected between $290–$320 million; GMV growth mid to high single digits; adjusted EBITDA $14–$17 million.

• Q2 adjusted net loss expected between $4.5–$2 million.

• Full-year 2024 net revenue guidance raised to $1.36–$1.45 billion; adjusted EBITDA $88–$97 million.

• Full-year adjusted net income expected at $5.5–$13 million.

• Capital expenditures for the year projected at $30 million, focused on technology and infrastructure.