LE 10-K & 10-Q changes, risk factors and insider trading
Lands' End, Inc. · Nasdaq · Retail-Family Clothing Stores · CIK 799288 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Geopolitical conflict in the Middle East and related disruptions to global oil markets could materially increase our transportation, sourcing and operating costs.”
New heading “Subsequent to the closing of the Pending WHP Transaction, the failure to maintain our license agreement relating to the Lands’ End brand could have material impact on our business.”
New heading “Failure to successfully close the transaction contemplated by the Membership Interest Purchase Agreement or failure to realize the benefits of the Pending WHP Transaction could result in adverse effects on our business.”
Removed heading “Our efforts to expand our distribution channels and geographic reach may not be successful.”
Removed heading “Our exploration and pursuit of strategic alternatives may not be successful.”
Largest changes
“Use of artificial intelligence technologies by us and our service providers could subject us to stringent and changing obligations. Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm and other adverse business or financial consequences. …”see in full comparison
Our import operations are subject to complex trade and customs laws, regulations and tax requirements, which may include restrictions under applicable sanctions laws and export controls, as well as trade restrictions or tariffs set by governments through mutual agreements or unilateral actions. The U.S. government has in the past made, and may in the future make, significant changes in U.S. trade policy and has taken certain actions that could negatively impact U.S. trade, including imposing tariffs on certain goods imported into the United States.see in full comparisonIn retaliation, China has in the past implemented, and may in the future implement, tariffs on a wide range of American products.There is also a concern that the imposition of tariffs by the United States could result in the adoption of tariffs by other countries as well, leading to a global trade war. More specifically, the U.S. government has from time to time imposed significant tariffs on certain product categories imported from China, including apparel, footwear, beauty and accessories.As of the date of this report, tariffs have not had a material impact on our business, but increased tariffs or trade restrictions implemented by the United States or other countries could have a material adverse effect on our business, financial condition and results of operations.
“We also rely on third‑party cloud hosting providers and software‑as‑a‑service platforms for critical parts of our infrastructure. Interruptions, outages, breaches or service reductions by these providers, whether due to operational failures, cyberattacks or other disruptions, could impair our ability to operate our business. Because these providers are outside our control, any such incident could result in business interruption, data loss, reputational damage, additional costs and litigation exposure.”see in full comparison
“On January 26, 2026 we announced the Pending WHP Transaction, pursuant to which, among other things, we agreed to contribute all of our intellectual property and related assets associated with the “Lands’ End” brand, including all of the license agreements entered into in connection with our licensing business to a wholly owned entity and to sell a 50% interest in that entity to WHP Global for $300 million in cash. The Pending WHP Transaction is expected to close in the first quarter of 2026. …”see in full comparison
“Geopolitical conflict in the Middle East and related disruptions to global oil markets could materially increase our transportation, sourcing and operating costs.”see in full comparison
“Failure to successfully close the transaction contemplated by the Membership Interest Purchase Agreement or failure to realize the benefits of the Pending WHP Transaction could result in adverse effects on our business.”see in full comparison
Full comparison: every changed paragraph (40)
Geopolitical conflict in the Middle East and related disruptions to global oil markets could materially increase our transportation, sourcing and operating costs.
Ongoing military conflict in the Middle East, including disruptions affecting the Strait of Hormuz, a key global shipping corridor, has contributed to sharp increases in global oil prices and elevated shipping and logistics costs. These conditions have also increased volatility in energy markets and fuel prices and may continue to do so for an extended period.
As a result, we could experience higher inbound freight costs, longer transit times, increased surcharges from carriers, and higher operating expenses related to energy and transportation. Additionally, shortages or delays in raw materials or finished goods from affected regions could disrupt our supply chain, limit inventory availability, or require the use of alternative and potentially more expensive sourcing strategies. Any of these impacts could adversely affect our margins, inventory levels, and financial performance.
Our business is adversely affected by unseasonal weather conditions and may be affected by significant weather events due to climate change. Sales of our spring and summer products, which traditionally consist of lighter clothing and swimwear, are adversely affected by cool or wet weather. Similarly, sales of our fall and winter products, which are traditionally weighted toward outerwear, are adversely affected by mild, dry or warm weather. In addition, severe weather events typically result in reduced traffic at Company Operated store locations which could lead to reduced sales of our merchandise. Severe weather events may impact our vendors’ ability to manufacture and ship product, our ability to deliver orders to customers in a timely manner, supply our Company Operated stores and adequately staff our distribution centers and Company Operated stores, which could have an adverse effect on our business and results of operations.
Our business is seasonal, with the highest levels of sales typically occurring during the fourth quarter of our fiscal year. Our fourth quarter results in the future may fluctuate based upon factors such as the timing of holiday season dates, inventory positions, global supply chain challenges, promotions, level of markdowns, competitive factors, weather and general economic conditions. Any decrease in sales or margins, for example, as a result of increased promotional activity, increased costs, economic conditions, poor weather or other factors, could have an adverse effect on our business and results of operations. In addition, seasonal fluctuations also affect our inventory levels since we usually order merchandise in advance of peak selling periods. To manage customer demand, we need to maintain an appropriate, but large amount of inventory, especially increasing it before the fourth quarter peak selling periods. If we are not successful in selling inventory during these periods, we may have to sell the inventory after the peak selling period at significantly reduced prices, which could adversely affect our business and results of operations. Furthermore, with the seasonal nature of our business, over 1,500 flexible part-time employees join us each year to support our fourthback-to-school quarterand holiday shopping season.seasons. An inability to attract qualified flexible part-time personnel could interrupt our sales during such peak seasons.
We may need additional financing in the future for our general corporate purposes or growth strategies and such financing may not be available on favorable terms, or at all, and may be dilutive to existing stockholders.all.
Subsequent to the closing of the Pending WHP Transaction, the failure to maintain our license agreement relating to the Lands’ End brand could have material impact on our business.
Upon the closing of the Pending WHP Transaction, we will enter into a license agreement (as amended from time to time, the “License Agreement”) with the JV, which will provide us with a license to continue to operate our existing business in the territories where we primarily operate, subject to the terms of the License Agreement. Under the License Agreement we will be obligated to pay to the JV minimum royalties of $50,000,000 per year (calculated pro rata based on an amount of $50,000,000 for a twelve (12) month period for the first contract year) through the end of the contract year 11, will increase one percent per year for contract years 12-21, and will be $55,231,106 for each contract year thereafter. The license rights are limited to a specific territory, as well as exclusive within specified trade channels with respect to certain core products and non-exclusive with respect to other categories of licensed products. The initial term of the License Agreement is 10 years following the conclusion of the first contract year, and the License Agreement automatically renews for up to 12 successive renewal terms of 7 years each, unless we provide notice of non-renewal at least 24 months prior to the end of the initial or applicable renewal term.
Currently, it is anticipated that our revenues will be generated solely from sales of products pursuant to the license granted under the License Agreement. We are required under the License Agreement to make royalty payments based on our sales. These payments will be no less than the minimum payments required. If we do not satisfy our financial obligations under the License Agreement, the JV has the right to terminate the license. The failure to maintain the License Agreement could have a material adverse effect on our results of operations.
If customer preference for our branded merchandise and services change or we cannot compete effectively in the apparel industry, our business and results of operations may be adversely affected.
Our products and services must satisfy the desires of customers, whose preferences change over time. Sales of brandedLands’ End merchandise account for substantially all our total revenues and the Lands’ End brand is a critical differentiating factor for our business. Our inability to develop products that resonate with our existing customers and attract new customers, our inability to maintain our strict quality standards or to develop, produce and deliver innovative products in a timely manner, or any unfavorable publicity with respect to the foregoing or otherwise could negatively impact the image of ourthe Lands’ End brand with our customers and could result in diminished appeal of ourthe brand. As customer preferences change, our failure to anticipate, identify and react in a timely manner to emerging trends and appropriately provide attractive high-quality products that maintain or enhance the appeal of ourthe brand through our websites, catalogs, licensed products and Company Operated stores could have an adverse effect on our sales, operating margins and results of operations.
We regard our copyrights, service marks, trademarks, trade dress, trade secrets and similar intellectual property as critical to our success. As such, we rely on trademark and copyright law, trade secret protection and confidentiality agreements with our associates, consultants, vendors and others to protect our proprietary rights. Nevertheless, the steps we take to protect our proprietary rights may be inadequate and we may have trouble in effectively limiting unauthorized use of our trademarks and other intellectual property worldwide. Unauthorized use of our trademarks, copyrights, trade secrets or other proprietary rights may cause significant damage to our brands and our ability to effectively represent ourselves to agents, suppliers, vendors, licensees and/or customers. After the closing of the Pending WHP Transaction, this intellectual property will be held by the JV and the JV will be responsible for maintaining it.
Additionally, our efforts to pursue licensing and wholesale relationships with third parties increases risk of brand damage. If third parties do not adhere to ourcertain brand standards or if wethere failis failure to maintain the image of ourthe brandsbrand due to actions by other licensees, merchandise and service quality issues, adverse publicity, governmental investigations or litigation, or other reasons, ourthe brandsLands’ End brand and reputation could be damaged, and our business may be adversely affected.
Third parties may sue us for alleged infringement of their proprietary rights. The party claiming infringement might have greater resources than we do to pursue its claims, and wewe, or the JV after the closing of the Pending WHP Transaction, could be forced to incur substantial costs and devote significant management resources to defend against such litigation. If the party claiming infringement were to prevail, wewe, or the JV after the closing of the Pending WHP Transaction, could be forced to discontinue the use of the related trademark or design, pay significant damages, or enter into expensive royalty or other arrangements with the prevailing party, assuming these royalty or other arrangements are economically feasible, which they may not be.
We have entered into agreements with vendors for logistics services, information technology systems (including website hosting), customer service, credit card processing, onshore and offshore software development and support, catalog production, distribution and packaging, customer returns and employee benefits. Services provided by any of our vendors could be interrupted as a result of many factors, such as acts of nature or contract disputes. Any failure by a vendor to provide us with contracted-for services on a timely basis or within service level expectations and performance standards could result in a disruption of our business and have an adverse effect on our business and results of operations.
Our Company Operated stores are dependent on our ability to operate all locations effectively and attract customers with a compelling assortment.assortment and price mix. Our Company Operated store operations include managing the store and recruiting and hiring store management and associates. In addition, we are required to implement retail-specific marketing plans, and enhance inventory management skills specific to retail, such as those related to allocation and replenishment of product. If customers are not receptive ofto our store locations and concept, customer traffic, projected store sales and profitability may suffer.
We do not own or operate any significant manufacturing facilities and therefore depend upon independent merchandise suppliers and vendors for the manufacture of our merchandise. We cannot control all of the various factors that might affect timely and effective procurement of supplies of product from our vendors, including labor issuesissues, severe weather events and other disruptions. From time to time, some of our factories that produce our product have experienced temporary suspension of operations due to labor issuesissues, severe weather events and other disruptions.
Our utilization of imports also makes us vulnerable to risks associated with products manufactured abroad, including, among other things, transportation and other delays in ocean shipments, unexpected or significant port congestion, lack of freight availability, increased cost to secure freight availability, freight cost increases, tariff increases, risks of damage, destruction or confiscation of products while in transit to a distribution center, organized labor strikes and work stoppages, heightened security screening and inspection processes or other port-of-entry limitations or restrictions in the United States and the United Kingdom.
Transportation and delivery costs may also increase due to volatility in global fuel and energy prices, including those driven by geopolitical conflicts or disruptions in key oil-producing regions. Sudden spikes in fuel prices or carrier surcharges could increase our inbound freight, outbound customer delivery, and catalog distribution costs, which we may be unable to fully offset through pricing or operational efficiencies. Any such increases could adversely affect our margins and operating results.
Our own websites, third-party suppliers and third-party marketplaces rely on our ability to reporttrack and exchange accurate inventories by style, color and size to support customer orders. If we are not able to accurately reporttrack inventory information our results of operations could be negatively impacted.
We have long standing relationships with the vendors that supply a significant portion of our merchandise but do not operate under long-term agreements. Therefore, ourOur success relies on maintaining good relations with these vendors. Our growth strategy depends to a significant extent on the willingness and ability of our vendors to efficiently supply merchandise that is consistent with our standards for quality and value. In the event we engage new vendors, it may cause us to encounter delays in production and added costs as a result of the time it takes to guide and educate our vendors in producing our products and adhering to our standards. If we cannot obtain a sufficient amount and variety of quality product at acceptable prices, it could have a negative impact on our competitive position. This could result in lower revenues and decreased customer interest in our product offerings, which, in turn, could adversely affect our business and results of operations.
Our merchandising sourcing strategies are designed to increase the efficiency and responsiveness of our supply chain and include both vendor rationalization, vendor productivityproductivity, speed-to-market and third-party sourcing assistance. In the event these strategies are unsuccessful, our business could be adversely affected.
Our import operations are subject to complex trade and customs laws, regulations and tax requirements, which may include restrictions under applicable sanctions laws and export controls, as well as trade restrictions or tariffs set by governments through mutual agreements or unilateral actions. The U.S. government has in the past made, and may in the future make, significant changes in U.S. trade policy and has taken certain actions that could negatively impact U.S. trade, including imposing tariffs on certain goods imported into the United States. In retaliation, China has in the past implemented, and may in the future implement, tariffs on a wide range of American products. There is also a concern that the imposition of tariffs by the United States could result in the adoption of tariffs by other countries as well, leading to a global trade war. More specifically, the U.S. government has from time to time imposed significant tariffs on certain product categories imported from China, including apparel, footwear, beauty and accessories. As of the date of this report, tariffs have not had a material impact on our business, but increased tariffs or trade restrictions implemented by the United States or other countries could have a material adverse effect on our business, financial condition and results of operations.
On February 20, 2026, the U.S. Supreme Court invalidated tariffs imposed under the International Emergency Economic Power Act (the “IEEPA Decision”). There remains significant uncertainty regarding the implementation of the IEEPA Decision, including the process that will govern refund claims, the timing of any potential refunds, and the ultimate amounts, if any, that we may recover. In addition, immediately following the IEEPA Decision, the U.S. government initiated new tariffs under alternative authorities, resulting in continued tariff exposure.
political instability, war, such as the current conflict between Russiaconflicts and Ukraine, hostilities in themultiple Middle East, increasing tension in Southeast Asia,locations, and acts of terrorism; and changes in tariffs in the United States that may have an impact on the trading status of certain countries and may include retaliatory duties or other trade sanctions.
Our efforts to expand our distribution channels and geographic reach may not be successful.
Our strategy includes initiatives to further our reach in the United States and in several countries throughout the world through various distribution channels and brands, including through relationships with third-party eCommerce marketplaces. We have limited experience operating in many of these locations and with third parties and face major, established competitors. We may also experience barriers to entry. We may seek additional business partners or licensees to assist us in these efforts, however we may not be successful in establishing such relationships. Moreover, consumer tastes and trends may differ in many of these locations from those in our existing locations, and as a result, the sales of our products may not be successful or profitable. If our expansion efforts are not successful or do not deliver an appropriate return on our investments, our business could be adversely affected.
In support of our business strategies, we have been implementing and continue to implement modifications and upgrades to our systems, including making changes to legacy systems, replacing legacy systems with successor systems with new functionality, automating processes and acquiring new systems with new functionality. We plan to continue the process of implementing a new ERP system across the company. While we are investing significantly in developments to our technology and systems, there is a risk that our investments may ultimately not result in the rate of return we expect. The failure of our information technology systems and networks to operate effectively or remain innovative, our inability to keep up with rapid technological change (including the successful utilization of data analytics, artificial intelligence and machine learning), third-party software-induced interruptions to our operations, problems involving foundational technology platforms, and challenges associated with transitioning to upgraded or replacement systems could cause delays in product fulfillment and reduced efficiency of our operations, require significant capital investments, and may have an adverse effect on our reputation, results of operations and financial condition.
Use of artificial intelligence technologies by us and our service providers could subject us to stringent and changing obligations. Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm and other adverse business or financial consequences. The use of rapidly evolving technologies such as artificial intelligence technologies, by us and our third-party service providers, while presenting significant benefits, can also present risks and challenges to our business. Using artificial intelligence and other machine learning technologies while the technology is still developing may expose us to liability, reputational harm, and threats of litigation, particularly if such technology produces errors or hallucinations, or results in content that is biased, harmful, discriminatory, or that infringes the intellectual property or data privacy rights of third parties, or otherwise if such technology does not function as intended. Our failure, or perceived failure, to comply fully with developing interpretations of artificial intelligence or machine learning technologies laws and regulations, or meet evolving and varied stakeholder expectations and industry standards, or our inability to develop adequate controls to manage our use of artificial intelligence and machine learning technologies could harm our business, reputation, financial condition, and operating results.
In support of our business strategies, we implement new solutions and upgrade existing ones to offer, sell and fulfill our products through Lands’ End distribution channels and with wholesale partners, licensees and external marketplaces. As we deploy such changes, we must maintain effective internal controls and operational processes. Any difficulties encountered in completing these activities, as well as problems in technical resources, system performance or system adequacy, including loss or corruption of data, could have an adverse impact on our business.
We also rely on third‑party cloud hosting providers and software‑as‑a‑service platforms for critical parts of our infrastructure. Interruptions, outages, breaches or service reductions by these providers, whether due to operational failures, cyberattacks or other disruptions, could impair our ability to operate our business. Because these providers are outside our control, any such incident could result in business interruption, data loss, reputational damage, additional costs and litigation exposure.
According to an amendment to Schedule 13D filed with the SEC on FebruaryJanuary 25,28, 2025,2026, Edward S. Lampert beneficially owned 55.3%56.0% of our outstanding shares of common stock as of February 24, 2025.stock. Accordingly, Mr. Lampert could have substantial influence over any action by us that requires approval by our stockholders, including but not limited to the election of directors and any transactions involving a change of control. The interests of Mr. Lampert, who has direct and indirect investments in other companies, including ESL Investments, Inc., may from time to time diverge from the interests of our other stockholders.
Lampert, who has direct and indirect investments in other companies, including ESL Investments, Inc., may from time to time diverge from the interests of our other stockholders.
Mr. Lampert is not subject to any contractual obligation to maintain his ownership position in Lands’ End, and we cannot assure you that he will. Any sale by Mr. Lampert of our common stock, or any announcement by Mr. Lampert that he has decided to sell shares of our common stock, could have an adverse impact on the price of our common stock. In a letter to the Board of Directors of Lands’ End sent on February 24, 2025, Mr. Lampert stated that if Lands’ End chooses not to pursue a process to sell the company, he intends to seek a buyer for his controlling interest at a fair and appropriate price.
Failure to successfully close the transaction contemplated by the Membership Interest Purchase Agreement or failure to realize the benefits of the Pending WHP Transaction could result in adverse effects on our business.
On January 26, 2026 we announced the Pending WHP Transaction, pursuant to which, among other things, we agreed to contribute all of our intellectual property and related assets associated with the “Lands’ End” brand, including all of the license agreements entered into in connection with our licensing business to a wholly owned entity and to sell a 50% interest in that entity to WHP Global for $300 million in cash. The Pending WHP Transaction is expected to close in the first quarter of 2026. The closing and subsequent success of this transaction is dependent upon, among other things, our ability to realize the full extent of the expected benefits of the transaction, including if we exchange our JV interest for an interest in WHP Global, which may occur under certain circumstances. Risks associated with the transaction include the possibility that one or more closing conditions for the transaction may not be satisfied or waived, on a timely basis or otherwise, including that a governmental entity may prohibit, delay, or refuse to grant approval for the consummation of the transactions (or only grant approval subject to adverse conditions or limitations); unexpected costs, charges or expenses resulting from the transaction; risks related to the disruption of management time from ongoing business operations due to the pendency of the transaction uncertainty of the expected financial performance of the JV following completion of the transaction; the possibility that there could be fluctuations in the trading price of our common stock as a result of the announcement, pendency or consummation of the transaction; risks related to our ability to realize the anticipated benefits of the transaction; the ability of the JV to implement its business strategy; risks relating to the occurrence of an exchange event, which is out of our control, to realize value from the our 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 Pending WHP Transaction may contain provisions that are difficult to enforce and the possibility of legal disputes with WHP Global and its affiliates that could delay realization of the full benefits of the transaction; the possibility that any exchange event could be structured in a manner and on terms and conditions that are disadvantageous to us and our stockholders; the possibility that the contribution of our intellectual property into the JV may not achieve the anticipated results, particularly if such intellectual property is not monetized effectively; the risk that WHP Global’s past performance may not be representative of future results; the risk that stockholder litigation in connection with the transaction or other litigation, settlements or investigations may affect the timing or occurrence of the transaction or result in significant costs of defense, indemnification and liability; and the occurrence of any event that could give rise to termination of the Pending WHP Transaction prior to the closing.
Our exploration and pursuit of strategic alternatives may not be successful.
On March 7, 2025, we announced that our Board of Directors initiated a process to explore strategic alternatives to maximize shareholder value. Our exploration of strategic alternatives, including a sale, merger or similar transaction, may not result in the identification or consummation of any transaction. In addition, the process of exploring strategic alternatives may be disruptive to our operations and we may incur substantial expenses associated with identifying and evaluating potential strategic alternatives. Any potential transaction and the related valuation would be dependent upon a number of factors that may be beyond our control, including, among other factors, market conditions and industry trends. Further, speculation regarding any developments related to the strategic alternatives process could cause our stock price to fluctuate significantly.
Due to the seasonal nature of our business, we rely heavily on flexible part-time employees to staff our distribution and customer service centers to support our peak seasons, including back-to-school shopping season and fourth quarter holiday shopping season. A potential labor shortage may impact our ability to hire and retain qualified personnel and impact our ability to operate our business effectively. Depending on their position, our employees either work 100% on-site, remotely from home or in a hybrid work model which allows employees to work both remotely from home and in the office. While we have developed and occasionally adjust our work model to achieve what we believe is best for operating our business, we may not be able to attract, hire or retain qualified personnel if competing companies offer a more desirable work model.
differences between the fair value measurement of assets and liabilities and their actual value, particularly for intangibles and goodwill,intangibles, contingent liabilities such as litigation, the absence of a recorded amount, or an amount recorded at the minimum, compared to the actual amount;
Management's Discussion & Analysis (MD&A)
New heading “Pending WHP Transaction”
New heading “Limited Liability Company Agreement”
New heading “License Agreement”
New heading “Restructuring and Other”
New heading “Adjusted Net Income”
Removed heading “Lands’ End Japan Closure”
Removed heading “Loss on Extinguishment of Debt”
Removed heading “Adjusted Net Income (Loss)”
Removed heading “U.S. Digital Segment Fiscal 2023 Compared to Fiscal 2022”
Removed heading “Goodwill and Indefinite-lived Intangible Asset Impairment Assessments”
Removed heading “Goodwill impairment assessments”
Removed heading “Revenue Recognition”
Largest changes
“Goodwill and Indefinite-lived Intangible Asset Impairment Assessments”see in full comparison
“In Fiscal 2023, in connection with the preparation of the financial statements for the quarter ended October 27, 2023, we considered the decline in our stock price and market capitalization, as well as the then current market and macroeconomic conditions, to be a triggering event for the U.S. eCommerce and Outfitters reporting units and therefore completed an interim test for impairment of goodwill for these reporting units as of October 27, 2023. We tested goodwill for impairment using a one-step quantitative test. …”see in full comparison
“Goodwill and the indefinite-lived trade name intangible asset are tested separately for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment assessments contain multiple uncertainties because the calculation requires management to make assumptions and to apply judgment to estimate future cash flows and asset fair values. If actual results fall short of our estimates and assumptions used in estimating future cash flows and asset fair values, we may incur future impairment charges that could be material.”see in full comparison
“Income tax expense of $4.3 million was recorded for Fiscal 2024 which resulted in an effective tax rate of 40.6%. This compared to Income tax benefit of $1.1 million in Fiscal 2023 which resulted in an effective tax rate of 0.9%. The Fiscal 2024 tax rate was higher than Fiscal 2023 primarily due to an impairment of goodwill recorded in Fiscal 2023 that was not deductible for tax purposes and as a result of pretax income in Fiscal 2024 compared to a pretax loss in Fiscal 2023.”see in full comparison
Full comparison: every changed paragraph (123)
This section discusses our results of operations for the year ended January 31,30, 20252026 as compared to the year ended FebruaryJanuary 2,31, 2024.2025. For a discussion and analysis of the year ended FebruaryJanuary 2,31, 20242025 compared to JanuaryFebruary 27,2, 2023,2024, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 7 of our Annual Report on Form 10-K for the year ended FebruaryJanuary 2,31, 2024,2025, filed with the SEC on AprilMarch 3,27, 2024.2025.
We identify our operating segments according to how our business activities are managed and evaluated. Following internal organizational changes and realignment of distribution channel responsibilities in Fourth Quarter 2024, ourOur operating segments consisted of: U.S. eCommerce, Europe eCommerce, Outfitters, Third Party, Licensing and Retail. Beginning Fourth Quarter 2024, the Wholesale business is included in Licensing and prior periods were recast to reflect the change in operating segments for comparability purposes. During Fiscal 2022, the Company’s operating segments included Japan eCommerce.
Europe eCommerce offers products primarily direct to consumers located in Europe and through eCommerce international websites andas well as third-party affiliates.marketplace websites.
Licensing earns royalties on the use of Lands’ Endour trademark and any fulfillment fees for fulfillment services provided by the Company.us.
Pending WHP Transaction
On January 26, 2026, we announced the Pending WHP Transaction and entered into a Membership Interest Purchase Agreement (the “MIPA”), by and among the Company, Lands’ End Direct Merchants, Inc., a wholly owned subsidiary of Lands’ End, WH Borrower, LLC, WH Topco, L.P. (d/b/a WHP Global) (“WHP Global”), and LEWHP LLC (“WHP”).
Upon the terms and subject to the conditions set forth in the MIPA, at closing (i) we will contribute all of our intellectual property and related assets associated with the “Lands’ End” brand, including all of the license agreements entered into in connection with Lands’ End’s licensing business to a newly formed Delaware limited liability company and wholly owned subsidiary of Lands’ End (“IPCo”), and (ii) immediately thereafter, we will sell a 50% controlling ownership stake in IPCo, to WHP for an aggregate purchase price of $300 million in cash. The closing of the Pending WHP Transaction (the “Closing”) is subject to certain customary closing conditions. The MIPA contains certain termination rights for both Lands’ End and WHP, including, the right to terminate the MIPA if the Closing has not occurred prior to October 26, 2026.
In connection with the Closing, we will enter into voting agreements with WHP Topco and certain stockholders of Lands’ End (consisting of our controlling stockholder, Edward S. Lampert, and related funds) pursuant to which those stockholders will vote all of their shares of Common Stock in favor of a WHP Global monetization event (described below).
Limited Liability Company Agreement
At the Closing, Lands’ End, IPCo, WHP and WHP Topco will enter into the amended and restated limited liability company agreement of IPCo (the “LLCA”), pursuant to which IPCo will have a single class of membership interests consisting of Class A units (the “IPCo Units”), with Lands’ End owning 50% of the IPCo Units and WHP owning 50% of the IPCo Units. IPCo will be governed by a board of managers consisting of four managers, with two managers appointed by each of WHP and Lands’ End. The managers appointed by WHP will collectively have an extra vote permitting WHP to control decisions of the IPCo board of managers, which may change in the future based on the relative ownership percentages of WHP and Lands’ End in IPCo.
Lands’ End’s IPCo Units may be exchanged for equity of WHP Topco (“WHP Topco Units” as defined in the LLCA) in connection with the following WHP Topco monetization events: (i) in an initial public offering, direct listing or de-SPAC of WHP Topco, where WHP’s enterprise value-to-EBITDA multiple (the “Exchange Reference Multiple”), when calculated based on the WHP listing price, is equal to or greater than 13, then we can elect to exchange Company’s IPCo Units for WHP Topco Units or WHP can force Lands’ End IPCo Units to be exchanged for WHP Topco Units. If the Exchange Reference Multiple is less than 13, then we can elect to exchange our IPCo Units for WHP Topco Units; (ii) in a change of control of WHP Topco, where WHP’s Exchange Reference Multiple (counting only cash, public securities or other specified consideration) implied by the transaction is equal to or greater than the Minimum Multiple (as defined below), then we are required to exchange our IPCo Units for WHP Topco Units; and (iii) in a significant asset sale by WHP Topco of 50% or more of its EBITDA, where the Exchange Reference Multiple implied by such asset sale (counting only cash, public securities and other specified consideration) is greater than or equal to the Minimum Multiple, we are required to exchange our IPCo Units for WHP Topco Units. In the event of such an exchange, our stake in IPCo would be valued at the EBITDA multiple implied by WHP Topco’s monetization event.
The minimum multiple will initially be set at 13x, and we may reset such multiple one time per calendar year with WHP’s consent, not to be unreasonably withheld, conditioned or delayed (the “Minimum Multiple”). Our right to exchange in a WHP Topco monetization event terminates on the occurrence of any of the aforementioned monetization events, whether or not our interests in IPCo were exchanged.
Pursuant to the LLCA, WHP and Lands’ End generally may not transfer their IPCo Units prior to the third anniversary of Closing (other than to permitted transferees or a third party purchaser of WHP). After the third anniversary of the Closing, each party may transfer its respective IPCo Units but subject to tag along rights and a right of first offer in favor of the other parties. In addition, following the third anniversary of Closing, if either Lands’ End or WHP receives a third party acquisition offer for 100% of IPCo reflecting an IPCo’s enterprise value / LTM EBITDA multiple at or above 10, the party receiving the offer has a right to “drag” the other party into such sale, subject to an ownership threshold and the achievement of certain economic thresholds. The dragged party has the option to be dragged in such sale or, instead, buy out the other party’s stake at the purchase price proposed by the third party.
Pursuant to the LLCA, any excess cash above $5.0 million at IPCo (or $7.5 million, if, as of the end of any fiscal quarter, the revenue of IPCo and its subsidiaries with respect to the last 12 months ending on the most recent date for which financial statements are available is greater than $150.0 million) will be distributed to WHP and Lands’ End on a quarterly basis and based on ownership split.
License Agreement
At the Closing, Lands’ End and IPCo will enter into a License Agreement (the “License Agreement”), pursuant to which IPCo will grant us a license to design, manufacture, sell and promote certain categories of products (including the types of products that we design, manufacture and sell currently) (collectively, “Licensed Products”) in the United States, Canada, the United Kingdom, Germany, Austria and France (the “Territory”), with limitations to certain channels of sale. The license is exclusive within the Territory and specified trade channels with respect to certain core products, and non-exclusive with respect to other categories of Licensed Products. The license is royalty-bearing and subject to a guaranteed minimum royalty (“GMR”), with different royalty rates due, depending on the channel under which Licensed Products are sold. The GMR will be $50,000,000 per year (calculated pro rata based on an amount of $50,000,000 for a twelve (12) month period for the first contract year) through the end of the contract year 11, will increase one percent per year for contract years 12-21, and will be $55,231,106 for each contract year thereafter. In addition, we will be eligible to receive an adjustment to our royalties, which adjustment will be paid by IPCo on a quarterly basis, based on total royalties received by IPCo (including from other licensees) above a specified threshold.
The initial term of the License Agreement is 10 years following the conclusion of the first contract year, and the License Agreement automatically renews for up to 12 successive renewal terms of 7 years each, unless we provide notice of non-renewal at least 24 months prior to the end of the initial or applicable renewal term. The License Agreement is only terminable by IPCo if we breach our obligation to make our required guaranteed minimum payments, or to make undisputed royalty payments, in each case subject to an opportunity to cure such non-payment within a certain period of time.
In addition, pursuant to the MIPA, and subject to the terms and conditions set forth therein, WHP commenced a tender offer (the “Tender Offer”) to purchase up to 2,222,222 shares of our common stock (the “Common Stock”), par value $0.01 per share, at a price of $45.00 per share in cash, without interest and subject to any applicable withholding taxes, representing an aggregate value of up to approximately $100 million, which tender offer is intended to close substantially concurrently with the Membership Interests Purchase. The tender offer will be subject to pro-ration should it be oversubscribed. As a result of the tender offer, WHP is expected to own up to approximately 7% of our outstanding shares of common stock.
In addition, conflict‑related disruptions in global energy markets and shipping lanes in early 2026 have contributed to heightened volatility in crude oil and refined‑product prices and interruptions to certain maritime routes, which may result in higher freight and delivery costs, carrier surcharges, longer transit times, and inventory delays.
Restructuring and Other
During Fiscal 2025, we incurred ongoing costs related to exploring strategic alternatives to maximize shareholder value and have included those costs as part of restructuring and other. Additionally, we reduced approximately 6% of our corporate office positions and incurred restructuring charges, primarily severance and benefit and other costs related to cost optimization of business operations. During Fiscal 2024, we reduced approximately 10% of our corporate office positions and incurred restructuring charges, primarily severance and benefit and other related costs. The reductions in the corporate office positions were made to better align with the evolving needs of the business and to invest in key growth areas.
We incurred $13.9 million and $5.6 million of restructuring and other costs in Fiscal 2025 and Fiscal 2024, respectively.
During Fiscal 2024 and Fiscal 2023, we reduced approximately 10% of our corporate office positions and incurred restructuring charges, primarily severance and benefit and other related costs. The reductions in the corporate office positions were made to better align with the evolving needs of the business and to invest in key growth areas. For the 52 and 53 weeks ended January 31, 2025 and February 2, 2024, we incurred restructuring charges, primarily severance and benefit costs, related to cost optimization of business operations and strategic initiatives of $5.6 million and $7.3 million, respectively, recorded in Other operating expense, net in the Consolidated Statement of Operations.
Lands’ End Japan Closure
During Second Quarter 2022, the Board of Directors approved a plan to wind down and cease operations of Lands’ End Japan KK. Lands’ End Japan KK represents the Japan eCommerce operating segment. The final liquidation occurred in First Quarter 2024. We incurred no closing costs in Fiscal 2024 and approximately $0.3 million during Fiscal 2023, respectively, recorded in Other operating expense, net in the Consolidated Statements of Operations. See Note 8, Lands’ End Japan Closure.
In addition to our Net income (loss) determined in accordance with GAAP, for purposes of evaluating operating performance, we report the following non-GAAP measures: Adjusted net income (loss) and Adjusted EBITDA. Adjusted net income (loss) is also expressed on a diluted per share basis.
Our management uses Adjusted net income (loss) and Adjusted EBITDA to evaluate the operating performance of our business for comparable periods and to discuss our business with our Board of Directors, institutional investors and other market participants. Adjusted EBITDA is also used as the basis for a performance measure used in executive incentive compensation.
The methods we use to calculate our non-GAAP financial measures may differ significantly from methods other companies use to compute similar measures. As a result, any non-GAAP financial measures presented herein may not be comparable to similar measures provided by other companies. Adjusted net income (loss) and Adjusted EBITDA should not be used by investors or other third parties as the sole basis for formulating investment decisions as these measures may exclude a number of important cash and non-cash recurring items.
Adjusted net income (loss) is defined as net income (loss) excluding significant non-recurring or non-operational items as set forth below. Adjusted net income (loss) is also presented on aan adjusted diluted per share basis. While Adjusted net income (loss) is a non-GAAP measurement, management believes that it is an important indicator of operating performance and useful to investors.
Corporate restructuring and other – composed of costs related to the strategic alternative exploration as well as severance and benefit costs for Fiscal 2025 and primarily severance and benefit costs for Fiscal 2024.
Unmitigated tariff costs – unmitigated incremental product costs, net of the impact of vendor negotiations, incurred pursuant to International Emergency Economic Powers Act (“IEEPA”) tariffs that were subsequently ruled unlawful by the Supreme Court of the United States on February 20, 2026 for Fiscal 2025.
Restructuring – primarily severance and benefit costs for Fiscal 2024 and Fiscal 2023, respectively.
Goodwill and long-livedLong-lived asset impairment – charges associated with the non-cash write down of certain long-lived assets and goodwill for Fiscal 20242025 and Fiscal 2023,2024, respectively.
Loss on extinguishment of debt – prepayment premium associated with the repayment of the Former Term Loan Facility before the scheduled maturity date and the write off of related unamortized original issue discount and debt issuance costs of the Former Term Loan Facility for Fiscal 2023.
Loss (Gaingain) loss on disposal of property and equipment – gain on saledisposal of a buildingproperty and excess landequipment in Fiscal 2025 and Fiscal 2024.
Lands’ End Japan closure – net operating income (loss) from liquidation and closing costs recorded for Fiscal 2023.
The following table sets forth, for the periods indicated, a reconciliation of Net income (loss) to Adjusted net income (loss) and Adjusted diluted net earnings (loss) per share:
Corporate restructuring and other – composed of costs related to the strategic alternative exploration as well as severance and benefit costs for Fiscal 2025 and primarily severance and benefit costs for Fiscal 2024.
Unmitigated tariff costs – unmitigated incremental product costs, net of the impact of vendor negotiations, incurred pursuant to International Emergency Economic Powers Act (“IEEPA”) tariffs that were subsequently ruled unlawful by the Supreme Court of the United States on February 20, 2026 for Fiscal 2025.
Restructuring – primarily severance and benefit costs for Fiscal 2024 and Fiscal 2023, respectively.
Goodwill and long-livedLong-lived asset impairment – charges associated with the non-cash write down of certain long-lived assets and goodwill in Fiscal 20242025 and Fiscal 2023.2024.
Lands’ End Japan closure – net operating income (loss) from liquidation and closing costs recorded in Fiscal 2023.
NetLoss (gain or loss) on disposal of property and equipment – disposal of property and equipment in Fiscal 20242025 and Fiscal 2023.2024.
Other – amortization of transaction related costs associated with our Licensing distribution channel in Fiscal 2023.
The following table sets forth, for the periods indicated, selected income statement data, both in dollars and as a percentage of Net revenue and a reconciliation of Net income (loss) to Adjusted EBITDA:
We use Net revenue to evaluate revenue performance for the U.S. eCommerce, Europe eCommerce, Outfitters, Third PartyParty, Retail and Licensing distribution channels. We currently use GMV, which equals total order value of all Lands’ End branded merchandise sold to customers through business-to-consumer and business-to-business channels, as well as the estimated retail value of the merchandise sold through third party distribution channels, as an important indicator of the performance of the comparable growth of the total brand. For our Retail distribution channel, we use Same Store Sales as a key measure in evaluating performance. A Company Operated store is included in U.S. Same Store Sales calculations when it has been open for at least 14 months. Online sales and sales generated through our in-store web portal are considered revenue in our U.S. eCommerce and are excluded from U.S. Same Store Sales.
Gross Merchandise Value (“GMV”) increased low-single digits compared to Fiscal 2023. Excluding the 53rd week of Fiscal 2023, GMV increased mid-single digits.2024.
Total Net revenue was $1.34 billion in Fiscal 2025, a decrease of $27.8 million or 2.0% from $1.36 billion in Fiscal 2024.
U.S. Digital Segment Net revenue was $1.16 billion in Fiscal 2025, an increase of $8.3 million or 0.7% from $1.15 billion in Fiscal 2024.
U.S. eCommerce Net revenue was $829.8 million for Fiscal 2025, a decrease of $13.0 million or 1.5% from $842.8 million in Fiscal 2024. Fiscal 2025 benefited from strong performance in our key product franchises, resulting in gross margin expansion and partially offsetting the overall decrease. The decline primarily reflects the transition of certain products to a licensing model.
Outfitters Net revenue was $241.8 million for Fiscal 2025, an increase of $13.6 million or 6.0% from $228.2 million in Fiscal 2024. The school uniform channel increased primarily due to a strong back-to-school season driven by an influx of new customers. The business uniform channel slightly increased due to strength in select enterprise accounts.
Third Party Net revenue was $91.2 million for Fiscal 2025, an increase of $7.7 million or 9.2%, from $83.5 million in Fiscal 2024. The increase was primarily due to curated product assortments across all marketplaces.
Europe eCommerce Net revenue was $90.2 million in Fiscal 2025, a decrease of $12.9 million or 12.5% from $103.1 million in Fiscal 2024. The decrease was primarily driven by new leadership using the first half to relaunch as a more premium brand and continued macroeconomic pressures.
Licensing and Retail Net revenue was $82.2 million in Fiscal 2025, a decrease of $23.2 million or 22.0% from $105.4 million in Fiscal 2024. The decrease reflects the planned transition of certain wholesale accounts to a licensing arrangement in 2024 and the performance of U.S. Company Operated stores partially offset by licensing revenue increasing by over 20%.
Total Net revenue was $1.36 billion in Fiscal 2024, a decrease of $109.6 million or 7.4% from $1.47 billion in Fiscal 2023. The decrease in Net revenue was driven by the transition of the kids and footwear product lines to licensing arrangements and optimizing promotional activity as we focused on higher quality sales resulting in higher gross margins and increased gross profit. Excluding the net impact of transitioning kids and footwear product lines to licensing arrangements of $96.6 million, the $31.2 million inventory buyout by a corporate client at the end of its contract in Fiscal 2023 and the impact of the 53rd week in Fiscal 2023 of $16.2 million, total Net revenue increased $34.5 million or 2.6% compared to Fiscal 2023.
U.S. Digital Segment Net revenue was $1.15 billion in Fiscal 2024, a decrease of $138.6 million or 10.7% from $1.29 billion in Fiscal 2023. Excluding the net impact of the licensing transition, the inventory buyout and the 53rd week, U.S. Digital Segment Net revenue increased $3.7 million or 0.3% compared to Fiscal 2023.
U.S. eCommerce Net revenue decreased 9.4%, driven by the transition of kids and footwear products from a direct to a license model, continued promotional productivity within swimwear, outerwear and newness in adjacent product categories and improved inventory management resulting in higher margins with lower clearance inventory sales. Excluding the net impact of the licensing transition and the 53rd week, U.S. eCommerce Net revenue increased 2.3% compared to Fiscal 2023.
Outfitters Net revenue decreased 15.5%, primarily driven by inventory sales to a corporate client at the conclusion of their contract in the First Quarter 2023. Excluding the inventory buyout and the 53rd week, Outfitters Net revenue decreased 2.9% compared to Fiscal 2023.
Third Party Net revenue decreased 10.1%, primarily driven by continued promotional productivity with curated assortments and improved inventory management resulting in higher gross margins. Excluding the impact of the 53rd week, Third Party Net revenue decreased 8.7% compared to Fiscal 2023.
Europe eCommerce Net revenue was $103.1 million in Fiscal 2024, a decrease of $9.8 million or 8.7% from $112.9 million in Fiscal 2023. The decrease in Europe eCommerce Net revenue was primarily driven by the continued focus on gross margin improvement through higher gross profit sales as well as a decrease in markdown and clearance sales.
What changed in the latest 10-Q
Risk Factors
There have been no material changes to the risk factors disclosed in the Company’s Annual Report on Form 10-K for the year ended January 30, 2026, filed with the SEC on March 26, 2026, and as disclosed on and modified by the Company’s Quarterly Report on Form 10-Q for the quarter ended May 1, 2026, filed with the SEC on June 9, 2026.
Removed heading “We have incurred and could continue to incur non-cash charges due to impairment of intangible assets and long-lived assets.”
Removed heading “The failure to maintain our license agreement relating to the Lands’ End brand could have a material adverse impact on our business.”
Removed heading “If we are unable to protect or preserve the image of our brands, our reputation and our intellectual property rights, our business may be adversely affected.”
Removed heading “Failure to realize the benefits of the WHP Transaction could result in adverse effects on our business.”
Largest changes
“We have incurred and could continue to incur non-cash charges due to impairment of intangible assets and long-lived assets.”see in full comparison
“Efforts by the JV to pursue licensing and wholesale relationships with third parties increases the risk of brand damage. If third parties do not adhere to certain brand standards, or if there is a failure to maintain the image of the brand due to actions by other licensees, merchandise and service quality issues, adverse publicity, governmental investigations or litigation, or other reasons, the Lands' End brand and reputation could be damaged, which could adversely affect our business and the value of our investment in the JV.”see in full comparison
“the risk that WHP Global’s past performance may not be representative of future results; and the risk that litigation in connection with the transaction or other litigation, settlements or investigations may result in significant costs of defense, indemnification and liability.”see in full comparison
“If we are unable to protect or preserve the image of our brands, our reputation and our intellectual property rights, our business may be adversely affected.”see in full comparison
“The failure to maintain our license agreement relating to the Lands’ End brand could have a material adverse impact on our business.”see in full comparison
“Failure to realize the benefits of the WHP Transaction could result in adverse effects on our business.”see in full comparison
Full comparison: every changed paragraph (23)
TheThere followinghave riskbeen factorsno supplementmaterial and,changes to the extent inconsistent therewith, supersede the risk factors previously disclosed in the Company'sCompany’s Annual Report on Form 10-K for the fiscal year ended January 30, 2026, filed with the SEC on March 26, 2026.2026, Exceptand as setdisclosed forthon below,and theremodified have been no material changes toby the Company'sCompany’s riskQuarterly factorsReport ason previouslyForm disclosed.10-Q for the quarter ended May 1, 2026, filed with the SEC on June 9, 2026.
We have incurred and could continue to incur non-cash charges due to impairment of intangible assets and long-lived assets.
As of January 30, 2026, our intangible asset consisted of our trade name, which has since been contributed to a 50/50 joint venture. The trade name is subject to testing for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired, with such testing occurring at the joint venture level. Although impairment testing is conducted within the joint venture, any impairment charge would impact the carrying value of our investment in the joint venture and could result in a corresponding impairment of our equity interest. Any event that impacts our reputation could result in impairment charges for our trade name at the joint venture level, which could adversely affect the value of our investment.
Long-lived assets, primarily property and equipment, are also subject to testing for impairment if events or changes in circumstances indicate that the asset might be impaired. A significant amount of judgment is involved in our impairment assessment. If actual results fall short of our estimates and assumptions used in estimating revenue growth, future cash flows and asset fair values, we could incur further impairment charges for intangible assets or long-lived assets, which could have an adverse effect on our results of operations.
The failure to maintain our license agreement relating to the Lands’ End brand could have a material adverse impact on our business.
Upon the closing of the WHP Transaction, we entered into a license agreement (as amended from time to time, the “License Agreement”) with the JV, pursuant to which we received a license to continue to operate our existing business in the territories where we primarily operate, subject to the terms of the License Agreement. Under the License Agreement, we are obligated to pay to the JV minimum royalties of $50,000,000 per year (calculated pro rata based on an amount of $50,000,000 for a twelve (12) month period for the first contract year) through the end of the contract year 11, will increase one percent per year for contract years 12-21, and will be $55,231,106 for each contract year thereafter. The license rights are limited to specific territories, as well as exclusive within specified trade channels with respect to certain core products and non-exclusive with respect to other categories of licensed products. The initial term of the License Agreement is 10 years following the conclusion of the first contract year, and the License Agreement automatically renews for up to 12 successive renewal terms of 7 years each, unless we provide notice of non-renewal at least 24 months prior to the end of the initial or applicable renewal term.
Currently, it is anticipated that our revenues will be generated solely from sales of products pursuant to the License Agreement. We are required under the License Agreement to make royalty payments based on our sales. These payments will be no less than the minimum payments required. These minimum payment obligations may adversely affect our liquidity and results of operations, particularly during periods of reduced sales or adverse market conditions, where the minimum payments may exceed the actual amounts we would otherwise owe to the JV. If we do not satisfy our financial obligations under the License Agreement, the JV has the right to terminate the license, subject to specified cure periods. Termination of the License Agreement would result in termination of substantially all rights necessary to operate our business using the “Lands’ End” brand, would significantly impair our ability to operate our business as currently conducted and could have a material adverse effect on our results of operations.
If we are unable to protect or preserve the image of our brands, our reputation and our intellectual property rights, our business may be adversely affected.
Following the closing of the WHP Transaction, our intellectual property, including our trade name, is held by the JV, and the JV is responsible for maintaining and protecting it. While the JV bears responsibility for the management of these assets, we remain exposed to risks associated with the brand's reputation and the JV's ability to preserve and protect it.
Efforts by the JV to pursue licensing and wholesale relationships with third parties increases the risk of brand damage. If third parties do not adhere to certain brand standards, or if there is a failure to maintain the image of the brand due to actions by other licensees, merchandise and service quality issues, adverse publicity, governmental investigations or litigation, or other reasons, the Lands' End brand and reputation could be damaged, which could adversely affect our business and the value of our investment in the JV.
Third parties may sue us or the JV for alleged infringement of their proprietary rights. The party claiming infringement might have greater resources than we or the JV do to pursue its claims, and we or the JV could be forced to incur substantial costs and devote significant management resources to defend against such litigation. If the party claiming infringement were to prevail, we or the JV could be forced to discontinue the use of the related trademark or design, pay significant damages, or enter into expensive royalty or other arrangements with the prevailing party, assuming these royalty or other arrangements are economically feasible, which they may not be.
Failure to realize the benefits of the WHP Transaction could result in adverse effects on our business.
On January 26, 2026, we announced the WHP Transaction, pursuant to which, among other things, we agreed to contribute all of our intellectual property and related assets associated with the "Lands' End" brand, including all of the license agreements entered into in connection with our licensing business, to a wholly owned entity and to sell a 50% interest in that entity to WHP Global for $300 million in cash. The WHP Transaction closed in the first quarter of 2026. The success of this transaction is dependent upon, among other things, our ability to realize the full extent of the expected benefits of the transaction, including if we exchange our JV interest for an interest in WHP Global, which may occur under certain circumstances. Risks associated with the transaction include:
unexpected costs, charges or expenses resulting from the transaction;
risks related to the disruption of management time from ongoing business operations due to the transaction;
uncertainty of the expected financial performance of the JV following completion of the transaction;
risks related to our ability to realize the anticipated benefits of the transaction;
the ability of the JV to implement its business strategy;
risks relating to the occurrence of an exchange event, which is out of our control, to realize value from our 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 any exchange event could be structured in a manner and on terms and conditions that are disadvantageous to us and our stockholders;
the possibility that one or more of the agreements governing the WHP Transaction may contain provisions that are difficult to enforce and the possibility of legal disputes with WHP Global and its affiliates that could delay realization of the full benefits of the transaction;
the possibility that the contribution of our intellectual property into the JV may not achieve the anticipated results, particularly if such intellectual property is not monetized effectively;
the risk that WHP Global’s past performance may not be representative of future results; and the risk that litigation in connection with the transaction or other litigation, settlements or investigations may result in significant costs of defense, indemnification and liability.
Management's Discussion & Analysis (MD&A)
New heading “ASC – Financial Accounting Standards Board Accounting Standards Codification, which serves as the source for authoritative GAAP, as supplemented by rules and interpretive releases by the SEC which are also sources of authoritative GAAP for SEC registrants”
New heading “Fourth Quarter 2025 – The 13 weeks ended January 30, 2026”
New heading “Second Quarter 2026 – The 13 weeks ended July 31, 2026”
New heading “Second Quarter 2025 – The 13 weeks ended August 1, 2025”
New heading “Equity Method Investment Income”
New heading “Year-to-Date 2026 compared with Year-to-Date 2025”
New heading “Selling and Administrative Expenses”
New heading “Depreciation and Amortization”
New heading “Equity Method Investment Income”
New heading “Other Operating Expense”
New heading “Operating (Loss) Income”
New heading “Interest Expense”
New heading “Income Tax (Benefit) Expense”
New heading “Net Income (Loss)”
New heading “Adjusted Net Income (Loss)”
New heading “U.S. Digital Segment Results of Operations”
New heading “Variable Profit”
Removed heading “Debt Facilities – Collectively, the Term Loan Facility and ABL Facility”
Removed heading “First Quarter 2026 – The 13 weeks ended May 1, 2026”
Removed heading “Adjusted EBITDA”
Removed heading “Debt Facilities”
Largest changes
“Prior to its repayment on April 1, 2026, our Term Loan Facility contained financial covenants, including a quarterly maximum total leverage ratio and a monthly minimum liquidity requirement. Upon repayment in full of the Term Loan Facility on April 1, 2026, these covenants ceased to apply.”see in full comparison
“ASC – Financial Accounting Standards Board Accounting Standards Codification, which serves as the source for authoritative GAAP, as supplemented by rules and interpretive releases by the SEC which are also sources of authoritative GAAP for SEC registrants”see in full comparison
“Debt Facilities – Collectively, the Term Loan Facility and ABL Facility”see in full comparison
Full comparison: every changed paragraph (121)
ASC – Financial Accounting Standards Board Accounting Standards Codification, which serves as the source for authoritative GAAP, as supplemented by rules and interpretive releases by the SEC which are also sources of authoritative GAAP for SEC registrants
Debt Facilities – Collectively, the Term Loan Facility and ABL Facility
First Quarter 2026 – The 13 weeks ended May 1, 2026
Fourth Quarter 2025 – The 13 weeks ended January 30, 2026
Second Quarter 2026 – The 13 weeks ended July 31, 2026
Second Quarter 2025 – The 13 weeks ended August 1, 2025
WHP Transaction – The transaction in which, (i) the Company contributed all of its intellectual property and related assets associated with the “Lands’ End” brand, including all of the license agreements entered into in connection with Lands’ End’s licensing business (the “Contributed Assets”) to LE Topco, LLC (the “JV”), a newly formed Delaware limited liability company and wholly owned subsidiary and (ii) immediately thereafter, the Company sold a 50% controlling ownership stake in the JV to WHP Global
Year-to-Date 2026 – The 1326 weeks ended MayJuly 1,31, 2026
Year-to-Date 2025 – The 1326 weeks ended MayAugust 2,1, 2025
Licensing earned royalties on the use of our trademark and any fulfillment fees for fulfillment services provided by us through the closing of the WHP Transaction. Effective April 1, 2026, the licensing segment earns fulfillment fees for fulfillment services provided by us.
At the Closing, we entered into a License Agreement, pursuant to which the JV granted a license to us to design, manufacture, sell and promote certain categories of products (including the types of products that we designed, manufactured and sold as of the date of the License Agreement) in certain channels and in certain jurisdictions, including the United States, Canada, the United Kingdom, Germany, Austria and France. The License Agreement is royalty-bearing and subject to a guaranteed minimum royalty (“GMR”) of $50,000,000 per year (calculated pro rata based on an amount of $50,000,000 for a twelve (12) month period for the first contract year) through the end of the contract year 11, will increase one percent per year for contract years 12-21, and will be $55,231,106 for each contract year thereafter, with different royalty rates due depending on the channel under which products are sold. The initial term of the License Agreement is 10 years following the conclusion of the first contract year, and the License Agreement automatically renews for up to 12 successive renewal terms of 7 years each, unless we provide notice of non-renewal at least 24 months prior to the end of the initial or applicable renewal term. The License Agreement is only terminable by the JV if we breach our obligation to make itsour required guaranteed minimum payments, or to make undisputed royalty payments, in each case subject to an opportunity to cure such non-payment within a certain period of time. Additionally, in certain WHP Global monetization events, such as a qualifying public listing or majority sale, we may have the right or obligation to exchange our interest in the JV for equity in WHP Global, at the same valuation multiple as the WHP Global monetization event.
In addition, conflict‑related disruptions in global energy markets and shipping lanes in early 2026 have contributed to heightened volatility in crude oil and refined‑product prices and interruptions to certain maritime routes, which may result in higher freight and delivery costs, carrier surcharges, longer transit times, and inventory delays.
Tariff Refunds
We apply a loss recovery model in accordance with ASC Topic 410 to account for potential refunds of previously paid International Emergency Economic Powers Act (“IEEPA”) tariffs. Any refunds, when recognized, are reflected as a reduction of Inventories on the Condensed Consolidated Balance Sheet to the extent the related goods remain on hand, or as a reduction of Cost of sales in the Condensed Consolidated Statements of Operations for amounts related to goods already sold.
We have incurred restructuring and other charges related to cost optimization of business operations and exploring strategic alternatives. During Firstthe Quarter13 and 26 weeks ended July 31, 2026 and FirstAugust Quarter1, 2025, we incurred ongoing costs related to exploring and completing strategic alternatives to maximize shareholder value and wehave included those costs as part of restructuring and other. This process culminated in the WHP Transaction. Additionally, during Firstthe Quarter13 and 26 weeks ended July 31, 2026, we incurred charges associated with the transition of executive leadership, including severance and related costs, as our strategic priorities evolved. Additionally, during Year-to-Date 2025, we reduced approximately 6% of our corporate office positions and incurred restructuring charges, primarily severance and benefit and other related costs. The reductions in the corporate office positions were made to better align with the evolving needs of the business and to invest in key growth areas.
We incurred $23.3$11.7 million and $3.3$2.4 million of restructuring and other costs during the FirstSecond Quarter 2026 and FirstSecond Quarter 2025, respectively. Restructuring and other costs of $35.0 million and $5.8 million were incurred Year-to-Date 2026 and Year-to-Date 2025, respectively.
As of MayJuly 1,31, 2026, approximately $2.8$2.5 million and $3.4 million of restructuring and other costs incurred had yet to be paid and are included in Other liabilities and Accrued expenses and other current liabilitiesliabilities, respectively, in the Condensed Consolidated Balance Sheets.
Corporate restructuring and other – composed of costs related to the strategic alternative explorationprocess asand wellcompletion asand severance and benefit costs for the 13 and 26 weeks ended MayJuly 1,31, 2026 and MayAugust 2,1, 2025.2025 as well as costs related to the transition of executive leadership for the 13 and 26 weeks ended July 31, 2026.
Loss on extinguishment of debt – prepayment premium associated with the repayment of the Term Loan Facility before the scheduled maturity date and the write off of related unamortized debt issuance costs of the Term Loan Facility for the 13 weeks ended May 1, 2026.
Unmitigated tariff costs – unmitigated incremental product costs, net of the impact of vendor negotiations, incurred pursuant to International Emergency Economic Powers Act (“IEEPA”) tariffs that were subsequently ruled unlawful by the Supreme Court of the United States on February 20, 2026 for the 13 and 26 weeks ended MayJuly 31, 2026 and August 1, 2026.2025.
JV intangible asset amortization – Lands’ End’s proportionate share of intangible asset amortization expense recorded within the JV’s financial results for the 13 and 26 weeks ended MayJuly 1,31, 2026.
Unmitigated tariff recovery – unmitigated incremental product costs, net of the impact of vendor negotiations, incurred pursuant to International Emergency Economic Powers Act (“IEEPA”) tariffs that were subsequently ruled unlawful by the Supreme Court of the United States on February 20, 2026 recovered for the 13 and 26 weeks ended July 31, 2026.
Loss on extinguishment of debt – prepayment premium associated with the repayment of the Term Loan Facility before the scheduled maturity date and the write off of related unamortized debt issuance costs of the Term Loan Facility for the 26 weeks ended July 31, 2026.
Exit costs – charges associated to exit kids and footwear lines of business including inventory excess and obsolescence reserves, inventory discounts and operational charges recorded in the 1326 weeks ended MayAugust 2,1, 2025 in conjunction with our licensing arrangements commencing in Fiscal 2024.
Gain on WHP Transaction – Gain recognized in conjunction with the transfer of the Lands’ End intellectual property to the JV, and immediately thereafter, sale of a 50% controlling ownership stake in the JV to WHP Global for the 1326 weeks ended MayJuly 1,31, 2026.
The following tabletables setsset forth, for the periods indicated, a reconciliation of Net income (loss) to Adjusted net income (loss) and Adjusted diluted earnings (loss) per share:
Beginning in Fourth Quarter 2025, the Company adjusts for unmitigated tariff costs. Prior-period amounts have been recast on a comparable basis to reflect this adjustment.
The tax impact of adjustments is calculated at the applicable U.S. and non-U.S. Federal and State statutory rates.
Beginning in Fourth Quarter 2025, the Company adjusts for unmitigated tariff costs. Prior-period amounts have been recast on a comparable basis to reflect this adjustment.
Corporate restructuring and other – composed of costs related to the strategic alternative explorationprocess asand wellcompletion asand severance and benefit costs for the 13 and 26 weeks ended MayJuly 1,31, 2026 and MayAugust 2,1, 2025.2025 as well as costs related to the transition of executive leadership for the 13 and 26 weeks ended July 31, 2026.
Unmitigated tariff costs – unmitigated incremental product costs, net of the impact of vendor negotiations, incurred pursuant to International Emergency Economic Powers Act (“IEEPA”) tariffs that were subsequently ruled unlawful by the Supreme Court of the United States on February 20, 2026 for the 13 and 26 weeks ended MayJuly 31, 2026 and August 1, 2026.2025.
JV intangible asset amortization – Lands’ End’s proportionate share of intangible asset amortization expense recorded within the JV’s financial results for the 13 and 26 weeks ended MayJuly 1,31, 2026.
Unmitigated tariff recovery – unmitigated incremental product costs, net of the impact of vendor negotiations, incurred pursuant to International Emergency Economic Powers Act (“IEEPA”) tariffs that were subsequently ruled unlawful by the Supreme Court of the United States on February 20, 2026 recovered for the 13 and 26 weeks ended July 31, 2026.
Net gain or loss on disposal of property and equipment – disposal of property and equipment for the 13 and 26 weeks ended MayJuly 1,31, 2026 and MayAugust 2,1, 2025.
Exit costs - charges associated to exit kids and footwear lines of business including inventory excess and obsolescence reserves, inventory discounts and operational charges recorded in the 1326 weeks ended MayAugust 2,1, 2025 in conjunction with our licensing arrangements commencing in Fiscal 2024.
The following tabletables setsset forth, for the periods indicated, selected income statement data, both in dollars and as a percentage of Net revenue and a reconciliation of Net income (loss) to Adjusted EBITDA:
Beginning in Fourth Quarter 2025, the Company adjusts for unmitigated tariff costs. Prior-period amounts have been recast on a comparable basis to reflect this adjustment.
Beginning in Fourth Quarter 2025, the Company adjusts for unmitigated tariff costs. Prior-period amounts have been recast on a comparable basis to reflect this adjustment.
FirstSecond Quarter 2026 compared with FirstSecond Quarter 2025
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 the new warehouse management system and the deliberate pacing of shipments as we ramped our distribution centers back to normal capacity. Excluding the impact of the temporary disruption, we estimate we would have delivered low single-digit revenue growth in the quarter.
U.S. Digital Segment Net revenue was $205.1$302.0 million for the FirstSecond Quarter of 2026, aan decreaseincrease of $22.6$7.9 million or 9.9%2.7%, from $227.7$294.1 million induring the FirstSecond Quarter of 2025.
U.S. eCommerce Net revenue was $153.3 million for the First Quarter of 2026, a decrease of $17.4 million or 10.2%, from $170.7 million during 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 we ramped our 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 during 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.
ThirdU.S. PartyDigital Segment Net revenue was $13.3$268.9 million for the FirstSecond Quarter of 2026, aan decreaseincrease of $0.8$13.6 million or 5.7%,5.3% from $14.1$255.3 million duringin the FirstSecond Quarter of 2025. The decrease was primarily due to prioritizing profitable high-quality sales and brand quality over lower-value promotional volume.
EuropeU.S. eCommerce Net revenue was $20.5$182.4 million for the FirstSecond Quarter of 2026, an increase of $2.6$15.1 million or 14.5%,9.0%, from $17.9$167.3 million during the FirstSecond Quarter of 2025. The increase was primarily duedriven toby strategiccarryover shiftshipments to a franchise-first assortment simplifyingfrom the businesstemporary anddisruption improvingassociated inventorywith efficiency.the rollout of the new warehouse management system in the First Quarter of 2026.
Outfitters Net revenue was $69.3 million for the Second Quarter of 2026, an increase of $2.9 million or 4.4%, from $66.4 million during the Second Quarter of 2025. The increase was driven by enterprise accounts which more than offset the impact of warehouse management system challenges affecting the processing of value-added service products in our school uniform business.
Third Party Net revenue was $17.2 million for the Second Quarter of 2026, a decrease of $4.4 million or 20.4%, from $21.6 million during the Second Quarter of 2025. The decrease was primarily due to prioritizing profitable high-quality sales and brand quality over lower-value promotional volume.
Europe eCommerce Net revenue was $19.7 million for the Second Quarter of 2026, an increase of $0.1 million or 0.5%, from $19.6 million during the Second Quarter of 2025. The increase was primarily due to a strategic shift to a franchise-first assortment simplifying the business and improving product margins.
Gross profit was $111.5$157.0 million for the FirstSecond Quarter of 2026, aan decreaseincrease of $21.2$13.6 million or 16.0%9.5% from $132.7$143.4 million during the FirstSecond Quarter of 2025. Gross margin decreasedincreased approximately 410320 basis points to 46.7%52.0% in the FirstSecond Quarter of 2026, compared with 50.8%48.8% in the FirstSecond Quarter of 2025. The gross margin decreaseincrease was primarily driven by the deleverageIEEPA createdtariff refund, partially offset by the temporary distribution center disruption, the new royalty structure associated with the JV and continuedtemporary tariffcosts headwinds.associated with our new warehouse management system.
Selling and administrative expenses increased $3.0$5.9 million to $126.5$135.3 million or 53.0%44.8% of Net revenue in the FirstSecond Quarter of 2026 compared with $123.5$129.4 million or 47.3%44.0% of Net revenue in the FirstSecond Quarter of 2025. The approximately 57080 basis point increase was driven by deleverage from lower net revenue and investment in digital marketing focused on new customer acquisition.acquisition and operational inefficiencies from the temporary disruption of the new warehouse management system partially offset by leverage from higher net revenue.
Depreciation and amortization expense decreased $2.2$1.6 million to $6.1 million in the FirstSecond Quarter of 2026 compared with $8.3$7.7 million in the FirstSecond Quarter of 2025. The decrease in depreciation and amortization is primarily driven by lower software depreciation as a result of major software projects becoming fully depreciated.
Equity Method Investment Income
Equity method investment income was $4.2 million in the Second Quarter of 2026 compared to none in the Second Quarter of 2025 as a result of the WHP Transaction.
Other operating expense, net was $23.1$11.7 million in the FirstSecond Quarter of 2026 compared to $3.3$2.4 million in the FirstSecond Quarter of 2025. The increase was primarily driven by restructuring and other costs incurred. See Note 1, Background and Basis of Presentation.
Operating LossIncome
As a result of the above factors, Operating lossincome was $44.1$8.2 million in the FirstSecond Quarter of 2026 compared to $2.4$4.0 million in the FirstSecond Quarter of 2025.
Interest expense was $5.5$1.0 million in the FirstSecond Quarter of 2026 compared to $9.3 million in the FirstSecond Quarter of 2025. The $3.8$8.3 million decrease was primarily driven byby, lower ABL Facility interest related to lower average outstanding balances and lower applicable interest rates under the Term Loan Facility. Asas previously announced, we usedusing a portion of the cash proceeds from the WHP Transaction to fully repay the term loan.loan in the First Quarter of 2026.
Gain on transaction with WHP was $491.6 million in First Quarter of 2026 compared to none in First Quarter of 2025.
Loss on extinguishment of debt was $9.2 million in First Quarter of 2026 compared to none in First Quarter of 2025.
Other Expense (Income)
LE insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-07-31 | Galvin Robert |
Grant/award | 1,273 | $12.02 | $15.3K |
| 2026-07-31 | Parker Alicia Uhlman |
Grant/award | 693 | $12.02 | $8.3K |
| 2026-06-14 | Maas Kym |
Shares withheld for tax | 3,903 | $12.41 | $48.4K |
| 2026-06-14 | Maas Kym |
Option exercise | 11,124 | — | — |
| 2026-06-14 | Mclean Andrew J. |
Option exercise | 73,770 | — | — |
| 2026-06-14 | Mclean Andrew J. |
Shares withheld for tax | 34,672 | $12.41 | $430.3K |
| 2026-06-14 | Mccracken Bernard Louis Iii |
Shares withheld for tax | 2,183 | $12.41 | $27.1K |
| 2026-06-14 | Mccracken Bernard Louis Iii |
Option exercise | 4,643 | — | — |
| 2026-06-14 | Gray Peter L |
Option exercise | 21,736 | — | — |
| 2026-06-14 | Gray Peter L |
Shares withheld for tax | 10,704 | $12.41 | $132.8K |
| 2026-05-01 | Galvin Robert |
Grant/award | 1,343 | $11.40 | $15.3K |
| 2026-05-01 | Parker Alicia Uhlman |
Grant/award | 707 | $11.40 | $8.1K |
Well-known investors holding LE (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| D. E. Shaw & Co. | 2026-06-30 | 248,700 | $2.6M | 0.0% | Added 285% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 183,702 | $1.9M | 0.0% | Added 33% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 57,089 | $598.3K | 0.0% | Added 78% |
| Millennium Management (Israel Englander) | 2026-06-30 | 52,694 | $552.2K | 0.0% | Reduced 63% |