Lands' End Reports $1.36 Billion Revenue, 7.4% Decrease, but Improved Profitability

Lands' End, Inc. reported a net revenue of approximately $1.36 billion for the fiscal year ending January 31, 2025, reflecting a decrease of 7.4% from the previous year's revenue of $1.47 billion. The decline was attributed primarily to the transition of the kids and footwear product lines to licensing arrangements, which accounted for a revenue impact of $96.6 million. Despite this, the company noted that excluding the effects of this transition, an inventory buyout, and the impact of an additional week in the previous fiscal year, total net revenue actually increased by 2.6%. The company achieved a gross profit of $653.3 million, up 4.4% from $625.5 million in the prior year, resulting in a gross margin improvement of 550 basis points to 47.9%.

In terms of operational changes, Lands' End underwent a restructuring that involved a reduction of approximately 10% of its corporate office positions, incurring restructuring charges of $5.6 million in Fiscal 2024. The company also completed the closure of its Japan eCommerce operations, with final liquidation occurring in the first quarter of 2024. The restructuring and closure efforts were part of a broader strategy to optimize operations and focus on higher-margin sales.

The company reported a significant improvement in profitability, with net income of $6.2 million, or $0.20 per diluted share, compared to a net loss of $130.7 million, or a loss of $4.09 per diluted share, in the previous fiscal year. Adjusted net income, which excludes non-recurring items, was $12.6 million, marking a substantial recovery from an adjusted net loss of $4.8 million in Fiscal 2023. This turnaround was supported by improved inventory management and a focus on higher quality sales, particularly in swimwear and outerwear categories.

Lands' End's U.S. Digital Segment, which includes U.S. eCommerce, Outfitters, and Third Party sales, generated $1.15 billion in revenue, down 10.7% from $1.29 billion in the previous year. However, when excluding the impacts of the licensing transition and other one-time factors, the segment showed a slight revenue increase of 0.3%. The company also reported that it fulfilled orders to customers in approximately 130 countries, with international sales contributing about 9% of total net revenue.

Looking ahead, Lands' End plans to continue focusing on brand growth and customer engagement while navigating macroeconomic challenges such as inflation and changing consumer spending patterns. The company aims to leverage its digital presence and enhance its product offerings through strategic licensing agreements, which are expected to drive future revenue growth.