Q1 2026 Lands' End Inc Earnings Call

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Speaker Change: Good day, everyone and welcome to the Lands' end first quarter 2025 earnings call.

Speaker Change: At this time all participants are in a listen only mode. Later, you will have the opportunity to ask questions. During the question and answer session. You may registered to ask a question at any time by pressing star one on your telephone keypad you may withdraw yourself from the queue by pressing star. Two. Please note. This call may be recorded I'll be standing by.

Speaker Change: You should need any assistance and it's now my pleasure to turn the program over to Tom All falls.

Speaker Change: Good morning, and thank you for joining the Lands' end earnings call for a discussion of our first quarter 2025 results, which we released this morning and can be found on our website Landsend dot com.

Speaker Change: On top of all of those lands on senior director of financial planning and analysis and I'm pleased to join you today with Andrew Mcclain, Our Chief Executive Officer, and Bernie Mccracken, Our Chief Financial Officer.

Speaker Change: After the prepared remarks, we will conduct a question and answer session.

Speaker Change: Please also note that the information we're about to discuss includes forward looking statements.

Speaker Change: Such statements involve risks and uncertainties the company's actual results could differ materially from those discussed on this call.

Speaker Change: Factors that could contribute to such differences include but are not limited to those items noted and included in the company's SEC filings, including our annual report on Form 10-K, and quarterly reports on Form 10-Q.

Speaker Change: The forward looking information that is provided by the company on this call represents the company's outlook as of today and we do not undertake any obligation to update forward looking statements made by us.

Speaker Change: Subsequent events and developments may cause the company's outlook to change.

Speaker Change: During this call we will be referring to non-GAAP measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures can be found in our earnings release issued earlier today.

Speaker Change: And which is posted in the Investor Relations section of our website Atlanta and Dot com.

Andrew: With that I will turn the call over to Andrew.

Andrew: Thank you Tom Good morning, and thank you for joining us today.

Andrew: We continued to execute our proven customer centric strategy through creative engagement.

Darryl: Darryl moment centered around the re imagining for Iconix.

Andrew: Expansion of our brand through licensing and of course <unk>.

Andrew: <unk> solutions based product.

Andrew: In addition, the period was characterized by improvement in the resiliency of our supply chain to maintain our momentum throughout fiscal 2025.

Andrew: Most pleasing with the continued performance at the top and bottom of our P&L with growth in GMB, which was low single digits when adjusted for prior year inventory sell off and a 12% improvement in our adjusted bottom line.

Andrew: As we continue to flow through higher levels of incremental profitability.

Andrew: All accomplished on a faster inventory turn.

Andrew: With improved working capital.

Andrew: As always our focus remains on building our brand maintaining discipline around promotional activity and staying the course to develop a healthier long term brand.

Andrew: This resulted in a record gross margin rate for the quarter.

Andrew: Margin rate, just shy of 51% and 210 basis points greater than last year. These.

Andrew: These are strong foundations upon which to build.

Andrew: We intentionally drove significant change in our supply chain as we accelerated production in the western hemisphere, giving us about speed and additional avenues to mitigate tariffs and provide resiliency.

Andrew: Less than 8% of our purchase order dollars last fiscal year fully utilized on buys out of China, while our supply of key franchises, including our sector, leading American ground subpoena.

Andrew: Co sourced across the globe.

Andrew: By intentionally creating a diverse sourcing network and strong relationships with excellent vendors.

Andrew: We are increasingly positioned to remain agile in our sourcing decisions, helping to address headwinds from the impact of tariffs.

Andrew: Innovation is the key to a successful brand building.

Andrew: As I touched on last quarter, we're leveraging digital and experiential marketing strategies that build a cultural relevancy drive traffic to our <unk> and.

Andrew: And translate to new customer conversion.

Andrew: We recently launched our total summer campaign, which features brand fans and Influencers on social media and a series of pop up shops across iconic summertime locations.

Andrew: The campaign introduces lovers of our iconic canvas pocket.

Andrew: So a wider assortment of lands end to <unk> products.

Andrew: Their lifestyle as perfectly as a pocket.

Andrew: We kicked off a memorial day weekend with pop up shops throughout the Hamptons Jersey shore, Charleston, and Nashville, and we will host further coastal pop ups, including the Nantucket Hotel in June July and August.

Andrew: These viral moments covered extensively on tech tuck ins to craft Sotheby's one of a kind totes changing hands after purchase.

Andrew: As a reminder, our pockets out remains our number one item and driving new customer acquisition and consistently attract customers from all age ranges.

Andrew: Typically driving brand awareness with a younger Gen Z and millennial cohort.

Andrew: We also improved our customer experience in the first quarter through our focus on offering greater personalization, including the launch of a new AI to the recommendation and outfitting engine makes it easier for customers to personalize.

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Andrew: In addition, we improved Iressa program capabilities generating nearly 400000, new subscribers in Q1.

Operator: Good day, everyone, and welcome to the Lands End First Quarter 2025 Earnings Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing star 1 on your telephone keypad. You may withdraw yourself from the queue by pressing star 2. Please note, this call may be recorded. I'll be standing by if you should need any assistance.

Andrew: Picking up on our customer our willingness to protect the brand continued to yield results with growth in new customers supplemented by increases in one to two times buyers and our highest LTV five times buyers.

Andrew: Renewing our customer file.

Andrew: Reaching a broader base of consumers and leveraging our franchise products like swim and Super remain priorities as we build long term shareholder value.

Operator: It is now my pleasure to turn the program over to Tom Altholz.

Andrew: Turning to product with a late Easter and colder weather pushing swim selling back.

Tom Altholz: Good morning and thank you for joining the Lands End earnings call for discussion of our first quarter 2025 results, which we released this morning and can be found on our website, landsend.com. I'm Tom Altholz, Lands End Senior Director of Financial Planning and Analysis, and I'm pleased to join you today with Andrew McLean, our Chief Executive Officer, and Bernie McCracken, our Chief Financial Officer.

Andrew: <unk> and squall outerwear franchises, where key witness for us in the quarter.

Andrew: As we're all aware in items like are any weather fleece and bond cuts.

Andrew: Women's bottoms, knits and sweaters and dresses also performed successfully.

Andrew: Once this wind season kicked into gear, we saw good engagement with our core franchises.

Tom Altholz: After the prepared remarks, we will conduct a question and answer session. Please also note that the information we're about to discuss includes forward-looking statements. Such statements involve risk and uncertainties. The company's actual results could differ materially from those discussed on this call. Factors that could contribute to such differences include, but are not limited to, those items noted and included in the company's SEC filings, including our annual report on Form 10-K and quarterly reports on Form 10-Q. The forward-looking information that is provided by the company on this call represents the company's outlook as of today, and we do not undertake any obligation to update forward-looking statements made by us.

Andrew: <unk>, a 40 year plus stalwart of the category has expanded exponentially building on the original one piece silhouette to offer two piece cross body presses and backlist and a range of colors and prints.

Andrew: This continued focus on winning with market leading franchises.

Andrew: Core brand platform that we are extending across channels and licenses to broaden distribution and create long term shareholder value.

Andrew: Turning to the performance of our various businesses beginning with our asset light B to C activities.

Andrew: Our asset light licensing business had a strong first quarter and continues as a significant vehicle for growth up the lands' end brand.

Tom Altholz: Subsequent events and developments may cause the company's outlook to change.

Andrew: With revenues up over 60% year on year.

Tom Altholz: During this call, we will be referring to non-GAAP measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. Reconciliation of Non-Gap Financial Measures to the Most Directly Comparable Gap Measures can be found in our earnings release issued earlier today, a copy of which is posted in the Investor Relations section of our website at landsend.com.

Andrew: Within the channels, we saw success in both the clubs and traditional department stores.

Andrew: The brands can use to reach new customers and offers incredible price and value.

Andrew: During the quarter, we completed the negotiation of additional licenses for travel accessories men's underwear and base layer as women's intimates. Our activity continues into the second quarter as we recently executed licenses for Jose and cold weather accessories.

Andrew McLean: With that, I will turn the call over to Andrew. Thank you, Tom. Good morning, and thank you for joining us today. We continue to execute our proven customer centric strategy through creative engagement, viral moments centered around the reimagining of our iconic tote, expansion of our brand through licensing, and of course, fresh solutions based product. In addition, the period was characterized by improvement in the resiliency of our supply chain to maintain our momentum throughout fiscal 2025. Most pleasing was the continued performance at the top and bottom of our P&L with growth in GMV, which was low single digits positive when adjusted for prior year inventory sell-off, and a 12% improvement in our adjusted bottom line as we continue to flow through higher levels of incremental profitability.

Andrew: The skill sets that the company is developing around the licensing of its IP and its integration of a leading channel and category expertise to augment its core competencies in e-commerce.

Andrew: <unk> continues to set it apart from competitors and office Lands' end strategic options for significant future growth.

Andrew: Turning to our B to B Outfitters business.

Andrew: I am pleased to note that <unk> delivered our revenue and profit objectives for the quarter, we saw strong performance across our enterprise business as well as growth in our school uniform business.

Andrew: We're pleased to launch a partnership with Delta Airlines in the second quarter to surface that uniform for <unk> through the end of 2027.

Andrew: We're excited to be working with Delta again, as we finalize the details of our collaboration together.

Andrew McLean: All accomplished on a faster inventory turn and with improved working capital.

Andrew McLean: As always, our focus remains on building our brand, maintaining discipline around promotional activity, and staying the course to develop a healthier long-term brand. This resulted in a record gross margin rate for the quarter, with a margin rate just shy of 51% and 210 basis points greater than last year. These are strong foundations upon which to build. We intentionally drove significant change in our supply chain as we accelerated production in the Western Hemisphere, giving us both speed and additional avenues to mitigate tariffs and provide resiliency. Less than 8% of our purchase order dollars last fiscal year were utilized on buys out of China, while our supply of key franchises, including our sector-leading American-grown Supima, are now co-sourced across the globe.

Andrew: Our school uniform business saw strong new customer growth in the quarter with commitments and annualized new business <unk>.

Andrew: <unk> million dollars.

Andrew: Driven from our focus.

Andrew: Let me turn to drive at reach across the country and supplemented by a competitor exiting the segment.

Andrew: As previously noted we have the most domestic component capabilities of any retailer in the United States.

Andrew: We are continuing to win by leveraging the strength of our brand our steadfast focus on quality, our market, leading embroidery and personalization capabilities.

Andrew: Our great customer service.

Andrew: Looking at our <unk> business domestically, we sharpen the customer proposition between landside in Dot com and.

Andrew: Our third party marketplace, using our proprietary AI tool to maximize rankings through application of product titles and descriptions.

Andrew McLean: By intentionally creating a diverse sourcing network and strong relationships with excellent vendors, we are increasingly positioned to remain agile in our sourcing decisions, helping to address headwinds from the impact of tariffs.

Andrew: This has created significant growth across our Amazon Macy's and Nordstrom marketplaces.

Andrew: For example on Amazon, we obsess, a ranking by focusing our efforts on our top 25 items product page optimization.

Andrew McLean: Innovation is the key to our successful brand building. As I touched on last quarter, we're leveraging digital and experiential marketing strategies that build our cultural relevancy, drive traffic to our own channels, and translate to new customer conversion. We recently launched our Tote Girl Summer campaign, which features brand fans and influencers on social media and a series of pop-up shops across iconic summertime locations. The campaign introduces lovers of our iconic canvas pocket tote to a wider assortment of Land's End apparel and swim products that fit their lifestyle as perfectly as our pocket tote. We kicked off Memorial Day weekend with pop-up shops throughout the Hamptons, Jersey Shore, Charleston and Nashville, and we'll host further coastal pop-ups, including the Nantucket Hotel in June, July and August.

Andrew: Prime eligibility and in stock availability.

Andrew: By leading with these top performance, we can create algorithm maximizing product titles and descriptions that drive search rankings.

Andrew: Complemented with solutions driven imagery.

Andrew: We can achieve better margins maintain efficient inventory levels and turn faster.

Andrew: With New leadership Europe began to show Green shoots of progress to become the highly solutions oriented highly engaged elevated brand that we noted is capable of being.

Andrew: During the quarter, we re launched both the German and UK websites taking.

Andrew: Taking a different marketing and assortment approach to each.

Andrew: Posted by specific and local Influencers talent.

Andrew: That work continues into marketplaces, where we launched on next Dot com, our first true marketplace experience in Europe.

Andrew McLean: These viral moments, covered extensively on TikTok and Instagram, saw these one-of-a-kind totes changing hands after purchase. As a reminder, our pocket tote remains our number one item in driving new customer acquisition and consistently attracts customers from all age ranges, notably driving brand awareness with a younger Gen Z and millennial cohort.

Andrew: This work to develop nuanced customer focused touch continues at pace and May we relaunched our French catalog as a prelude to a full relaunch of a French language website next month.

Andrew: In June we will begin selling on <unk> dot com.

Andrew: Again, creating a path to specific customer.

Andrew: With specific experience I will now turn it over to Bonnie to discuss our first quarter performance in more detail.

Andrew McLean: We also improved our customer experience in the first quarter through our focus on offering greater personalization, including the launch of a new AI-driven recommendation and outfitting engine that makes it easier for customers to personalize Plex. In addition, we improved our SS marking program capabilities, generating nearly 400,000 new subscribers in Q1. Picking up on our customer, our willingness to protect the brand continue to yield results with growth in new customers supplemented by increases in one to two times buyers and our highest LTV five times buyers. renewing our customer file. reaching a broader base of consumers and leveraging our franchise products like Swim and Supima remain priorities as we build long-term shareholder value.

Bonnie: Thank you Andrew for the first quarter total revenue performance came in at $261 million.

Bonnie: A decrease of 9% compared to last year.

Andrew: When excluding the impact of transitioning the kids and footwear inventory to license ease in the first quarter 2024, total revenue decreased by 4% year over year.

Andrew: <unk> decreased low single digits for the first quarter of 2025%, primarily driven by timing of orders when excluding the impact of transitioning that case and footwear inventory two licensees in the first quarter of 2024, GMB increased by low single digits year over year.

Andrew: We delivered adjusted EBITDA of $10 million in the first quarter, which came was in our guidance.

Andrew McLean: Turning to product, with a late Easter and colder weather pushing swim selling back, our Wonderweight and Squall outerwear franchises were key winners for us in the quarter, as were our wear-and-out items like our Anyweather fleece and barn coats. Women's bottoms, knits, sweaters, and dresses also performed successfully. Once the swim season kicked into gear, we saw good engagement with our core franchises. Tuglas, a 40-year-plus stalwart of the category, has expanded exponentially, building on the original one-piece silhouette to offer two-piece, cross-body dresses, rompers, and backless in a range of colors and prints. This continued focus on winning with market leading franchises is a core brand platform that we are extending across channels and licenses to broaden distribution and create long term shareholder value.

Andrew: Gross profit decreased by 5% compared to last year.

Andrew: Gross margin was 51% and approximately 210 basis point increase from the first quarter of 2024.

Andrew: The margin increase was driven by the impact of transitioning kids and footwear inventory two licensees in the first quarter of fiscal 2024.

Andrew: Our U S E Commerce business saw approximately flat sales and gross profit compared to the first quarter of 2024 due to the continued strength in our outerwear product offset by a slow start to seasonal swim assortment.

Andrew: Sales from Lands' end outfitters increased 1% from the first quarter of 2024.

Andrew: Sales for the business uniform channel were slightly up year over year and sales from our school uniform channel were slightly down year over year, driven by timing of customer orders.

Andrew: And our third party marketplace business gross profit dollars decreased by 11% compared to the first quarter of 2024 as revenue decreased by 9% year over year.

Andrew McLean: Turning to the performance of our various businesses, beginning with our asset light B2C activities. Our asset light licensing business had a strong first quarter and continues as a significant vehicle for growth of the Land's End brand, with revenues up over 60% year on year. Within the channels, we saw success in both the clubs and traditional department stores as the brand continues to reach new customers and offers incredible price and value.

Andrew: While performance was consistently positive in most marketplaces. The combined third party business was negatively impacted by challenges in one marketplace. Overall marketplaces saw marked improvement in April.

Andrew: Our European ecommerce business sales decreased 28% year over year as new leadership used the quarter to relaunch as a more premium brand, eliminating lower value inventory and positioning for marketplace expansion.

Andrew McLean: During the quarter, we completed the negotiation of additional licenses for travel accessories, men's underwear and base layer, and women's intimates. Our activity continues into the second quarter as we recently executed licenses for hosiery and cold weather accessories. The skill sets that the company is developing around the licensing of its IP and its integration of a leading channel and category experts to augment its core competencies in e-commerce continues to set it apart from competitors and offers Lands End strategic options for significant future growth.

Andrew: Revenues from our licensing business increased by over 60% compared to the prior year.

Andrew: Licensing and our presence across our third party marketplace partners continue to help the business diversify and reduce risk from any one individual partner.

Andrew: SG&A expenses decreased by $4 million year over year, driven by strong cost controls across the entire business as a percentage of sales SG&A was 47%, which was an increase of approximately 270 basis points compared to 2020 for.

Andrew McLean: tuning to our B2B Outfitters business. I am pleased to note that B2B delivered our revenue and profit objectives for the quarter. We saw strong performance across our enterprise business, as well as growth in our school uniform business.

Andrew: Primarily driven by deleverage from lower revenues.

Andrew: For the first quarter, we had a net loss of $8 $3 million or 27 per share. We had an adjusted net loss of $5 $4 million or <unk> 18 per share which were both within our guidance range.

Andrew McLean: were pleased to launch a partnership with Delta Airlines in the second quarter to serve as their uniform provider through the end of 2027. We're excited to be working with Delta again as we finalize the details of our collaboration together. Our school uniform business saw strong new customer growth in the quarter with commitments in annualized new business of $13 million, driven from a focus on leveraging our strength as a leader to drive outreach across the country and supplemented by a competitor exiting the segment. As previously noted, we have the most domestic embroidery capabilities of any retailer in the United States.

Andrew: Moving to our balance sheet.

Andrew: Inventories at the end of the first quarter were $262 million compared to $289 million a year ago. The.

Andrew: The 9% decrease in our inventory position resulted from our supply chain teams ongoing efforts to drive efficiencies and maintain resiliency and diversification with respect to our sourcing capabilities.

Andrew: In terms of our debt at the end of the first quarter. Our term loan balance was $244 million and our ABL had $40 million of borrowings outstanding which was flat to the first quarter last year.

Andrew: During the first quarter, we repurchased $3 million worth of shares under our $25 million share repurchase authorization announced in March of last year, bringing the balance of the remaining authorization to $11 million as of the end of the quarter.

Andrew McLean: We are continuing to win by leveraging the strength of our brand, our steadfast focus on quality, our market-leading embroidery and personalization capabilities, and our great customer service.

Andrew McLean: Looking at our B2C business, domestically, we sharpened the customer proposition between landsend.com and our third-party marketplaces using a proprietary AI tool to maximize rankings through application of product titles and descriptions. This has created significant growth across our Amazon, Macy's and Nordstrom's marketplaces. For example, on Amazon, we obsess on ranking by focusing our efforts on our top 25 items, product page optimization, prime eligibility and in stock availability. By leading with these top performers, we can create algorithm-maximizing product titles and descriptions that drive search rankings. complemented with solutions driven imagery. We can achieve better margins, maintain efficient inventory levels and turn faster.

Andrew: Now moving to guidance for.

Andrew: For the full year, our guidance includes the impact of tariffs at 30% for China and approximately 10% for the rest of the world.

Andrew: We are implementing mitigation measures to effectively manage the tariff headwinds at these levels and accordingly, our annual guidance remains unchanged as we continue to expect net.

Andrew: <unk> net revenue to be between 133 to 145 billion.

Andrew: While GM GMB is expected to be mid to high single digit growth.

Andrew: Adjusted net income of 15 million to $27 million and adjusted diluted earnings per share of <unk> 48 to 86.

Andrew: And our adjusted EBITDA to be in the range of $95 million to $107 million or.

Andrew: Our guidance for the full year incorporates approximately $25 million in capital expenditures with that I will turn the call back over to Andrew.

Andrew McLean: With new leadership, Europe began to show green shoots of progress to become the highly solutions oriented, highly engaged, elevated brand that we know it is capable of being. During the quarter, we relaunched both the German and UK websites. taking a different marketing and assortment approach to each, supported by specific and local influencer talent. That work continues into marketplaces where we launched on next.com, our first true marketplace experience in Europe. This work to develop nuanced, customer-focused touch continues apace. In May, we relaunched a French catalogue as a prelude to a full relaunch of a French-language website next month.

Andrew: Thank you Bernie.

Speaker Change: Always I want to thank all of the lands end employees for their dedication to building the brand and upholding our customer centric strategy.

Speaker Change: Our commitment to delivering exceptional quality service and care to our customers is what continues to set us apart and help sustain our momentum.

Speaker Change: Finally, the process our board of directors initiated last quarter to explore strategic alternatives, including a sale merger or similar transaction involving the company to maximize shareholder value remains ongoing.

Speaker Change: We will not be commenting further on that at this time and we will provide an update once appropriate with that.

Andrew McLean: In June, we will begin selling on Debenhams.com, again creating a path to specific customer https://www.benhams.com with a specific experience.

Speaker Change: We look forward to your questions.

Speaker Change: Thank you at this time, if you would like to ask a question. Please press star one now on your telephone keypad again to ask a question that is star one to enter the queue.

Bernard McCracken: I'll now turn it over to Bernie to discuss our first quarter performance in more detail. Thank you, Andrew. For the first quarter, total revenue performance came in at $261 million, a decrease of 9% compared to last year. When excluding the impact of transitioning the kids and footwear inventory to licensed skis in the first quarter 2024, total revenue decreased by 4% year over year. GMB decreased low single digits for the first quarter of 2025, primarily driven by timing of orders. When excluding the impact of transitioning the kids and footwear inventory to licensees in the first quarter of 2024, GMB increased by low single digits year over year.

Speaker Change: We will take our first question from Dana Telsey of Telsey Group. Your line is open.

Dana Telsey: Good morning, good morning, everyone and nice to see the progress.

Dana Telsey: Couple of question typically you provide second.

Dana Telsey: Coming quarter guidance.

Dana Telsey: I think in the release this time.

Speaker Change: Any color you can give us on the complexion of the year and the cadence of what you're looking for.

Speaker Change: Within that Paris, and tax Holistically, how you're thinking about it both in terms of pricing and on inventory I have one.

Speaker Change: One follow up thank you.

Dana Telsey: Good morning Dana.

Dana Telsey: As far as guidance goes.

Bernard McCracken: We delivered adjusted EBITDA of $10 million in the first quarter, which came within our guidance. gross profit decreased by 5% compared to last year. Gross margin was 51% in approximately 210 basis point increase from the first quarter of 2024. The margin increase was driven by the impact of transitioning kids and footwear inventory to licensees in the first quarter of fiscal 2024. Our US ecommerce business saw approximately flat sales and gross profit compared to the first quarter of 2024. Due to the continued strength in our outerwear product offset by a slow start to seasonal swim sort.

Dana Telsey: Based on the near term uncertainty with tariff rates.

Dana Telsey: The company has provided annual guidance based on the current tariff rates, which we've talked about which is a 10% baseline in the 30% for China, which comes to about an effect of <unk>, 12% rate for us in the back half.

Dana Telsey: And then we put a lot of work into a transformation process to build mitigation efforts against that.

Dana Telsey: Against those rates tariffs and feel strongly that we have the right mitigation to get to offset those for the year.

Dana Telsey: And then just a bit of color on the on your tariff impacts question I mean, either be you know the company, we're not going to sit around and wait for a solve later in the year, we rolled up our sleeves actually towards the end of Q4 and started shifting heavily into western hemisphere. So we were taking big programs not the small.

Bernard McCracken: sales from Lands End Outfitters increased 1% from the first quarter of 2025. Sales from the business uniform channel were slightly up year over year, and sales from our school uniform channel were slightly down year over year, driven by timing of customer orders. In our third party marketplace business, gross profit dollars decreased by 11% compared to the first quarter of 2024, as revenue decreased by 9% year over year. While performance was consistently positive in most marketplaces, the combined third-party business was negatively impacted by challenges in one market. overall marketplaces saw marked improvement in April. Our European e-commerce business sales decreased 28% year over year as new leadership used a quarter to relaunch as a more premium brand, eliminating lower value inventory and positioning for marketplace.

Dana Telsey: Programs, we took suite Pima, which is one of our biggest programs and that is.

Dana Telsey: It is our biggest program and we move that to western hemisphere actually in process of co sourcing that in eastern hemisphere, as well said that we've got a lot of pacing to go after it to move with it and to be able to react to it and so we're taking we're taking the attainable.

Dana Telsey: Shifts way upfront.

Dana Telsey: Got it.

Dana Telsey: Then.

Dana Telsey: Congratulations on the new Delta agreement, that's very encouraging.

Speaker Change: How is it different than the last agreement that you have.

Speaker Change: Or is that and then on the marketplaces business what are you seeing there.

Speaker Change: Encouraging to hear about Europe, what are your thoughts on goals for you. Thank you.

Bernard McCracken: Revenues from our licensing business increased by over 60% compared to the prior year. licensing and our presence across our third party marketplace partners continue to help the business diversify and reduce risk from any one individual partner. SG&A expenses decreased by $4 million year over year, driven by strong cost controls across the entire business. As a percentage of sales, SG&A was 47%, which was an increase of approximately 270 basis points compared to 2024, primarily driven by deleverage from lower revenues. For the first quarter, we had a net loss of $8.3 million, or $0.27 per share. We had an adjusted net loss of $5.4 million, or $0.18 per share, which were both within our guidance range.

Eric: Eric do you want to take that sure the Delta arrangement.

Speaker Change: As a two and a half year completion of a contract they signed with another vendor that we will complete that and we're in discussions on what the future of that will be beyond that.

Speaker Change: In terms of marketplaces, we feel really good about marketplaces.

Speaker Change: Nordstrom is continues to be.

Speaker Change: This growth marketplace for us.

Speaker Change: Actually it's really driven off the back of a.

Speaker Change: Very high <unk> is the highest we've ever recorded.

Speaker Change: As we just see a very premium customer come to the brand. So we're excited about it that Amazon's continued to grow for us along with them.

Speaker Change: Along with that.

Bernard McCracken: Moving to our balance sheet. inventories at the end of the first quarter were $262 million compared to $289 million a year ago. The 9% decrease in our inventory position resulted from our supply chain teams ongoing efforts to drive efficiencies and maintain resiliency and diversification with respect to our sourcing capability.

Speaker Change: Macy's.

Speaker Change: And we saw progress on target as well that we were happy with.

Speaker Change: Believe your question probably has some cost embedded in I do want to address that we did have a tough quarter with kohl's, but actually appropriate optimistic about it and the trends that we're seeing out of the business, we have reset with kohl's.

Speaker Change: Feel good about the direction, we're seeing there and the selling we are getting which is driven by actually also an increase in ARV. So.

Bernard McCracken: In terms of our debt, at the end of the first quarter, our term loan balance was $244 million, and our ABL had $40 million of borrowings outstanding, which was flat to the first quarter last year. During the first quarter, we repurchased $3 million worth of shares under our $25 million share repurchase authorization announced in March of last year, bringing the balance of the remaining authorization to $11 million as of the end of the quarter.

Speaker Change: In terms of marketplaces in general we feel very positive Europe, I couldnt be more excited about actually think the opportunity for <unk> internationally is amazing we just use the opportunity.

Speaker Change: The challenges we had late last year to really leave it and say we want to create a halo for the U S brands that we should be continually evolving this brand upwards and that's like Europe is a great place to pick up on that cachet and we'd have to do a lot of work around customer segmentation as much as anything and we found that.

Bernard McCracken: Now moving to guidance. For the full year, our guidance includes the impact of tariffs at 30% for China and approximately 10% for the rest of the world. We are implementing mitigation measures to effectively manage the tariff headwinds at these levels, and accordingly, our annual guidance remains unchanged as we continue to expect net revenue to be between $1.33 to $1.45 billion, while GMV is expected to be mid to high single-digit growth.

Speaker Change: Can reach a customer from <unk> to next to the UK.

Speaker Change: Germany, but also we're looking at how we're really going to lean in to France, we see that as a very fashion forward market. We've always had sales to France, but we see that as a significant opportunity for us.

Speaker Change: We see more market expansion coming off the back of that so actually way more bullish on that than we necessarily were even three months ago.

Bernard McCracken: adjusted net income of $15 million to $27 million and adjusted diluted earnings per share of 48 cents to 86 cents. and our adjusted EBITDA to be in the range of $95 million to $107 million.

Speaker Change: Thank you.

Speaker Change: Thanks, Dave Thanks Dana.

Speaker Change: We'll take our next question from Marni Shapiro of retail tracking your line is open.

Bernard McCracken: Our guidance for the full year incorporates approximately $25 million in capital expenditures.

Marni Shapiro: Hey, guys.

Speaker Change: Gratulation on the improvements.

Speaker Change: You talk a little bit about obviously swim was a highlight in the quarter I am curious about some of your other segments in key segments like towels and things like that that you guys have focused on and could you also just talk a little bit about the changes happening here at the site.

Andrew McLean: With that, I will turn the call back over to Andrew. Thank you, Bernie. As always, I want to thank all of the Lands End employees for their dedication to building the brand and upholding our customer centric strategy. Our commitment to delivering exceptional quality service and care to our customers is what continues to set us apart and help sustain our momentum.

Speaker Change: Has been outstanding.

Speaker Change: Really much more modern storytelling it feels more useful.

Speaker Change: I guess can you talk about what's happening behind the scenes even your fashion is really on trend, but not trendy and could you kind of roll out what we could expect to see especially with some big seasons coming up ahead with back to school and then winter with your outerwear business.

Andrew McLean: Finally, the process our Board of Directors initiated last quarter to explore strategic alternatives including a sale, merger, or similar transaction involving the company to maximize shareholder value remains ongoing. We will not be commenting further on it at this time and we will provide an update once appropriate.

Speaker Change: Right and all of that money money you can just keep asking questions forever is great.

Andrew McLean: With that, we look forward to your questions. Thank you.

Speaker Change: I think that we will.

Operator: At this time, if you would like to ask a question, please press star 1 now on your telephone keypad, again, to ask a question. That is star 1 to enter the queue.

Speaker Change: Wanted to be curious with us with.

Speaker Change: Number one on <unk>.

Speaker Change: Wine brands for women over 40, and we felt we had the right actually in the <unk>.

Dana Telsey: We'll take our first question from Dana Telsey of Telsey Group. Your line is open. Good morning, everyone, and nice to see the progress. A couple questions. Typically, you provide the upcoming quarter guidance. I didn't see anything, I think, in the release this time. Any color you can give us on the complexion of the year and the cadence of what you're looking for. And within that, tariff impacts. Holistically, how are you thinking about it, both in terms of pricing and on inventory? All right, then I have one follow-up. Thank you.

Speaker Change: Opportunity to move the market and I think we built team from design to.

Speaker Change: Merchandising to design to sourcing that could really start to react to that and we gave them the opportunity to be curious with that with the franchises. So you take Douglas Douglas, Thank everybody, who knows tech less thinks about it as.

Speaker Change: It does exactly what it says on the 10, but it always comes in Black and it always comes in the same seller.

Speaker Change: We just felt that there was such an opportunity to reach a wider consumer.

Speaker Change: <unk>.

Speaker Change: We just started to get curious about what we were seeing around the world leveraging the comments that I was just making to Dana about Europe, we see so much trend coming out of places like France, and it's like there's no reason why we shouldn't be servicing that.

Andrew McLean: As far as guidance goes, you know, based on the near-term uncertainty with tariff rates. The company has provided annual guidance based on the current tariff rates, which, you know, we've talked about, which is the 10% baseline and the 30% for China, which comes to about an effective 12% rate for us in the back half. And that we, you know, we put a lot of work into a transformation process to build mitigation efforts against that, against those raised tariffs and feel strongly that we have the right mitigations to get to offset those for the year. Dana, just a bit of color on the on your tariff impacts question.

Speaker Change: There is another which is that we should be starting to channel that and so as we looked at.

Speaker Change: I think <unk> into swim dresses.

Speaker Change: The back half of tug, let's take making it into a two piece and actually hitting some of the real trends about having a romp southwest mhm and it's been really it's been really powerful in what we see as.

Speaker Change: You heard the numbers about.

Speaker Change: How are customers responding it's really our existing customer response to the existing product, but we have a whole new customer responding to the new product and we are really excited about the dynamics of the customer we are seeing coming into the brand there.

Andrew McLean: I mean, you know me, you know, the company, it's like, we're not going to sit around and wait for a solve later in the year, we rolled up our sleeves, actually, towards the end of Q4, and started shifting heavily into Western Hemisphere. So we were taking big programs, not the small programs, we took Supima, which is one of our biggest programs. In fact, it is our biggest program. And we we moved that to Western Hemisphere, actually in process of co sourcing that in Eastern Hemisphere as well, so that we've got a lot of pacing to go after it to move with it and to be able to react to it.

Speaker Change: Sure.

Speaker Change: Yes, H oriented.

Speaker Change: More oriented towards the fit and style and aesthetic up lands and handwriting that we're trying to develop across the business.

Kevin Matt: Kevin Matt and team.

Speaker Change: That's on the creative side of the business really leaning in and challenging US every day to think about.

Andrew McLean: And so we're taking, we're taking the pain of all those shifts way up front. Got it.

Speaker Change: Different customer a different consumer and how we're going to consistently reach them and so we're not going to compromise on that we see an opportunity to remake the brand.

Dana Telsey: And then congratulations on the new Delta agreement. That's very encouraging. How is it different than the last agreement that you have, or had, or is it? And then on the marketplaces business, what are you seeing there? And it was encouraging to hear about Europe. What are your thoughts on the goals for Europe? Thank you. Fair enough.

Speaker Change: Taos I'm going to talk about <unk>.

Speaker Change: Linda you can put a tell in the coach and I think that.

Speaker Change: I think what we've done is we've taken that and we've opened up to I mean, we have we.

Speaker Change: We have gen <unk>, let alone Gen Z coming in.

Speaker Change: Grabbing.

Speaker Change: Number one acquisition vehicle for new customers you saw the work that we did.

Andrew McLean: Do you want to take Delta? Sure. The Delta arrangement is a two and a half year completion of a contract they signed with a another vendor that we will complete that. And we're in discussions on what the future of that will be beyond that. In terms of marketplaces, we feel really good about marketplaces. Nordstrom's continues to be the fastest growth marketplace for us. And actually, it's really driven off the back of a very high AOV. It's the highest AOVs we've ever recorded, as we just see a very premium customer come to the brand. So we're excited about that.

Speaker Change: With the collapse.

Speaker Change: Memorial Day.

Speaker Change: We're selling back to that because the tenant opens you up to sell to swim to sell to tell to sell the swim dress.

Speaker Change: I think that's been incredibly powerful for us the site. Thank you for the site we've done a lot with the site. We think we can do more with the site and what we're trying to do it.

Speaker Change: Open up the various channels to find different shoppers. So I talked about being on next stock comp or I talked about being on Nordstrom com and I think we find different customers there.

Speaker Change: Didn't you to some of the work we're doing in Europe, you should take a look at lands' end.

Speaker Change: The UK and the dot the site as well to get some perspective on how we're.

Andrew McLean: Amazon's continued to grow for us, along with Macy's. And we saw progress on Target as well that we were happy with.

Speaker Change: Not even so much regionalized, but personalizing to those markets is becoming key to us because I've always believed it's about the individual customer and the experience of having and the more we can personalize that.

Andrew McLean: I believe your question probably has some Kohl's embedded in it, and I do want to address that. We did have a tough quarter with Kohl's, but I actually feel very optimistic about it and the trends that we're seeing out of the business. We had a reset with Kohl's. I feel good about the direction we're seeing there and the selling we're getting, which is driven by actually also an increase in AOVs. So in terms of marketplaces in general, we feel very positive.

Speaker Change: Sir.

Speaker Change: Fashion and trend that's coming up we dropped our student catalog next week I'm really curious to see what you think about it.

Speaker Change: Leave it at that.

Speaker Change: By the way just thoughts onto the U K site.

Speaker Change: So it feels like a European site, not an American site, which.

Speaker Change: Is it good. Thanks can I just ask you one quick follow up you are getting a lot of new people in on Totes are you able to transition them into other products and I guess, where do they move from total.

Andrew McLean: Europe, I couldn't be more excited about. I actually think the opportunity for Lands End internationally is amazing. We just use the opportunity of the challenges we had late last year to really lean in and say, we want to create a halo for the US brand. So it's like we should be continually evolving this brand upwards. And it's like Europe is a great place to pick up on that cachet. And we started to do a lot of work around customer segmentation as much as anything. And we found that we can reach a customer from Debenhams to Nets.

Speaker Change: Where is the next place did they go to towers or is it swim or is it dresses I'm curious like what the transition what the path looks like for that customer.

Speaker Change: Yes, it's a great question, we talked about this a lot the big pivot point.

Speaker Change: Cover swim and dresses so they go to swim dresses. So if you look at our swim dresses mhm.

Speaker Change: Women pick up possibly in dresses and they were the most regular dresses that whole trend.

Andrew McLean: to the UK to Germany but also we're looking at how we're really going to lean into France. Now, we see that as a very fast-forward market. We've always had sales to France but we see that as a significant opportunity for us and we see more market expansion coming off the back of that. So, we're actually way more bullish on it than we necessarily were even three months ago.

Speaker Change: Out there right now.

Speaker Change: Beach to bar.

Speaker Change: Pool is really calling for <unk>.

Speaker Change: Having the ability to not have to your Reuben change.

Speaker Change: What we are seeing.

Speaker Change: Real growth in that women dress trend and actually swim dresses outperformed regular dresses.

Speaker Change: I don't want to do regular dresses at the service date.

Dana Telsey: Thank you. Thanks, Dana.

Speaker Change: To be strong and we've seen some really strong trends in there, but where the customer goes where we're seeing a lot of action is on that has done that swim dress and.

Marni Shapiro: We'll take our next question from Marni Shapiro of Retail Tracking. Your line is open. Hey guys, congratulations on the improvements. Could you talk a little bit about obviously SWIM was a highlight in the quarter. I'm curious about some of your other segments, you know, key segments like towels and things like that that you guys have focused on. And could you also just talk a little bit about the changes happening here? The site has been outstanding, really much more modern, your storytelling, it feels more youthful. I guess, could you talk about what's happening behind the scenes?

Speaker Change: It's so of a moment and I think it's a franchise we can further build on going into the going into it.

Speaker Change: Typically next year Fannie.

Speaker Change: Fantastic. Thank you so much best of luck for summer.

Speaker Change: Hey, Thank you.

Speaker Change: We will take our next question from Eric.

Speaker Change: Okay.

Speaker Change: Search your line is open.

Speaker Change: Good morning.

Speaker Change: Let's talk a little bit about licensing here.

Speaker Change: Part of the kind of doing the apples to apples pieces.

Marni Shapiro: Even your fashion is really on trend, but not trendy.

Speaker Change: <unk> licensing.

Andrew McLean: And could you kind of roll out what we could expect to see, especially with some big seasons coming up ahead with back to school and then winter with your outerwear business? writing it all down Marni, Marni, you can just keep asking questions forever. It's great. You know, I think that we, we, we wanted to be curious with us when we're the number one online brand for women over 40. And, you know, we felt we had the right, actually, and the opportunity to move the market. And I think we built a team from design to merchandising to tech design to sourcing that could really start to react to that.

Speaker Change: Okay.

Speaker Change: This year are somewhat of a replacement for categories you already have.

Speaker Change: Now entering the part where licensing.

Speaker Change: Being incremental categories.

Speaker Change: I will start to answer the total revenue because theyre not really replacing something that's already out there.

Speaker Change: I guess I'd love to get an update on how you are happy.

Speaker Change: How you feel about the footwear and the kids licenses in terms of helping drive business.

Speaker Change: Both online and with your partners.

Speaker Change: Hey, Eric good to have you on I'll start with just.

Speaker Change: The strategy side of it I'll, let Andrew.

Speaker Change: Our feelings about the current categories.

Speaker Change: Are correct in that as you noticed that we added a few new licenses and our announcement today.

Andrew McLean: And we gave them the opportunity to be curious with, with the franchises. So you take Tuglas, and, you know, Tuglas, I think everybody who knows Tuglas thinks about it as it. It does exactly what it says on the tin, but it always comes in black and it always comes in the same silo. And we just felt that there was such an opportunity to reach a wider consumer. And, you know, we just started to get curious about what we were seeing around the world and, you know, leveraging the comments that I was just making to Dana about Europe.

Speaker Change: Are repeats from Q4 that we have signed.

Speaker Change: And those are white space, so those will be purely incremental and start to build the brand and get us to additional channels that we're very excited about.

Speaker Change: And as you'll realize that licensing just started in Q1 last year. So each quarter, we will be building the historical license that we signed and they'll continue to grow quarter to quarter.

Andrew McLean: We see so much trend coming out of places like France. And it's like, there's no reason that, one, we shouldn't be servicing that. But there's another, there's another, which is that we should be starting to channel that. And so, you know, we looked at turning Tuglass into swim dresses. It's like taking the back out of Tuglass, making it into a two-piece, and actually hitting some of the real trends about having a romper Tuglass. It's been really, it's been really powerful. And what we see is, you know, you heard the numbers about, you know, how our customers responding.

Andrew: Andrew you want to talk about footwear.

Speaker Change: Yes.

Speaker Change: The other color Eric.

Speaker Change: Yes.

Speaker Change: Is the reach that we get by being in other.

Speaker Change: Other channels being in the clubs and being in wholesale is absolutely huge for us and I don't want to diminish.

Speaker Change: The opportunity there how far we can go.

Speaker Change: I think the adjunct to that.

Speaker Change: Coming out of the conversation, we just had about Europe is this opens us up globally as well, it's a significant opportunity.

Andrew McLean: It's really our existing customer response to the existing product. But we have a whole new customer responding to the new product. And we are really excited about the dynamics of the customer we're seeing coming into the brand. It's like they're less age-oriented, and they're more oriented towards the fit and style and aesthetic of Land's End. And that's a handwriting that we're trying to develop across the business. And, you know, I've got Kim and Matt and team that's that's on the creative side of the business, really leaning in and challenging us every day to think about, you know, a different customer, a different consumer, and how we're going to consistently reach them.

Speaker Change: Push the brand into new markets. So.

Speaker Change: On top of everything <unk> said I just want to make sure that that's not getting lost.

Speaker Change: This event specific to specific to kids and shoes.

Speaker Change: Can you just came out of the gate strong we've been really happy with the transition we made in kids was an emotional one for lands' end because.

Speaker Change: It's always been in the kids business inside of vertical retailer that's something that.

Speaker Change: Almost every one of my employees want to hang on to and.

Speaker Change: I felt that we needed to concentrate on our best that because we're not a $10 billion company not yet give us a couple of years.

Andrew McLean: And so we're not going to compromise on that we see an opportunity to remake the brand.

Andrew McLean: Towels, I'm going to talk about towels and totes. If you put a towel in the top, you can put a towel in the tote. And I think this, I think what we've done is we've taken the tote and we've opened it up to, I mean, we have, we have Gen, we have Gen A, let alone Gen Z coming in and grabbing at the totes.

Speaker Change:

Speaker Change: So it was who do you lean in and work with and so we found the best what we believe for the best partner out there.

Speaker Change: They've done a great job, we see tremendous sales on our own website from kits and it's not just discounted sales are it's not just add on sales it's customers coming on buying.

Andrew McLean: It's our number one acquisition vehicle for new customers. You saw the work that we did with the colabs over Memorial Day, you know, we're selling back to that because the tote opens you up to sell the swim, to sell the towel, to sell the swim dress. I think that's been incredibly powerful for us.

Speaker Change: Or near full price and they are specifically buying for kids and what a great adjunct that as for our school uniform business, which we're seeing a lot of growth from as well when we put the two side by side.

Speaker Change: Got like good symbiosis I wanted to put a plug in for backpack day, which is coming up that that's going to be huge for us and again, it's something we work with our partner on.

Andrew McLean: The site, thank you for the site. We've done a lot with the site. We think we can do more with the site.

Andrew McLean: And what we're trying to do is. open up the various channels to find different shoppers. So I talked about being on Next.com, or I talked about being on Nordstrom.com. And I think that, you know, we find different customers there.

Speaker Change: And their ability to actually increase the penetration of lands end kids into the other channels and to a wider population.

Speaker Change: And that just kept diminish that that is extremely powerful for us shoes, because it would be slower.

Andrew McLean: I would point you to some of the work we're doing in Europe, you should take a look at landsend.co.uk and the .de site as well to get some perspective of how we're not even so much regionalizing, but personalizing to those markets is becoming key to us, because I've always believed it's about the individual customer and the experience they're having. And the more we can personalize that, the better.

Speaker Change: And then use this works really well for US I think we were slow because we try to reinvent sorry, we tried to go with what the <unk>.

Speaker Change: Original shoe.

Speaker Change: Choose where I was going to say silhouettes, but that doesn't work for shoes.

Speaker Change: Really.

Speaker Change: The original assortment and we kept that we've turned that on its head now we've started to go to much more newness and we'd be more aggressive about that and so we're seeing we're seeing that work and it works back to swim pick up on Bonnie's question, which is again, we will see her wireless slides she's going to where the hull uniform from the beach.

Andrew McLean: Fashion and trend that's coming up.

Andrew McLean: We drop our June catalog next week. I'm really curious to see what you think about it. And I'd love to talk to you about it.

Marni Shapiro: I'm going to leave it at that. By the way, I just popped on to the UK site. And it's so different. It feels like a European site, not an American site, which is a good thing.

Speaker Change: The whole uniform from the pool to go to dinner and I think that gives us a lot of hope and we're seeing actually the club's thoughts could interests and choosing that as well and I like that because that puts us in front of hundreds of millions of people.

Marni Shapiro: Can I just ask you one quick follow-up? You're getting a lot of new people in on totes. Are you able to transition them into other products? And I guess, where do they move from totes? Like, where's the next place? Do they go to towels? Or is it swim? Or is it dresses? I'm curious, like what the transition, what the path looks like for that customer?

Speaker Change: We haven't seen that in the catalogs that the shoes, becoming much more wider in terms of styles and trends here going forward.

Speaker Change: In terms of.

Andrew McLean: The big, that's a great question. We talked about this a lot. The big pivot point. It covers swim and dresses, so they go to swim dresses. So if you look at our swim dresses, a lot of women pick up our swim dresses and they wear them as regular dresses. You know, that whole trend that's out there right now of, you know, beach to bar, you know, pool to dinner is really calling for having the ability to not have to go to your room and change. And I, you know, what we're seeing is a real growth in that swim dress trend.

Speaker Change: In terms of <unk>.

Speaker Change: 222, new view of the Delta contract coming up could you remind us historically, how these kind of contracts launch I remember correctly. This is a big bump initially and then they have a nice flow afterwards.

Speaker Change: And what should we be thinking about.

Speaker Change: In terms of back to school I know that the competitor disappeared. When did you think thats going to be.

Speaker Change: Fully manifest in and we're going to see that in terms of the flow here. This year also.

Speaker Change: Yeah, Eric as far as it goes.

Speaker Change: It isn't necessarily at the beginning or end of a contract that there's there's large flows it's when they decide to launch a new product line.

Andrew McLean: And actually, swim dresses outperform regular dresses. Now, I don't want to do regular dresses at this service. They continue to be strong, and we've seen some really strong trends in there. But where the customer goes, where we're seeing a lot of action is on that swim dress. It's so of a moment, and I think it's a franchise we can further build on going into particularly next year.

Speaker Change: Our current.

Speaker Change: Our current agreement with Delta.

Speaker Change: It does not have a near term new launch a product they are working on that themselves.

Speaker Change: So this will be just the normal run rate that we experienced with them historically.

Speaker Change: Okay in terms of back to school uniforms.

Marni Shapiro: Fantastic. Thank you so much. Best of luck for summer. Hey, thank you.

Eric Beder: We'll take our next question from Eric Beder of SCC Research. Your line is open. Good morning. I want to talk a little bit about licensing here. You know, part of the kind of doing the apples to apples piece is that you licensing of the last year and this year are somewhat of a replacement for categories you already have.

Speaker Change: Where we're excited about the volume that we added Andrew noted in his comments that there is $13 million of new customer schools that we have added over the last six months as one of our competitors exited the industry.

Speaker Change: So we are.

Speaker Change: Back to school tends to start in June for Us.

Speaker Change: And then play out through September so we're excited for the effects on Q2.

Eric Beder: Are we now entering the part where licensing, where we're seeing incremental categories that will start to add to the total revenue because they're not really replacing something that's already out there?

Speaker Change: That new added business one of the things that we like about this year.

Speaker Change: Just worth noting because I know, there's a lot of implications for all back to school is as we're seeing back to school lineup very closely with 2024 as back to school. So it should be relatively calm.

Eric Beder: And I guess I'd love to get an update on how you are happy on how you feel about the footwear and the kids licenses in terms of helping drive business both online and with your partner.

Speaker Change: The way we're viewing it.

Speaker Change: And last question you mentioned in your release about swim.

Andrew McLean: Hey, Eric, good to have you on. I'll start with just the strategy side of it.

Speaker Change: If you look at.

Speaker Change: The product has materially improved do you believe that just because in some ways the timing of the weather and some of the pieces I know, it's been closer to year over year in certain areas.

Bernard McCracken: I'll let Andrew move to the feelings about the current categories. You are correct in that, as you noticed, that we added a few new licenses in our announcement today that were repeats from Q4 that we have signed. And those are white space, so those will be purely incremental and start to build the brand and get us to additional channels that we're very excited about. And as you'll realize that, you know, licensing just started in Q1 last year, so each quarter, we'll be building the historical license that we signed. They'll continue to grow quarter to quarter.

Speaker Change: How should we be thinking about that thank you.

Speaker Change: Eric we improved that ourselves I keep telling you this.

Speaker Change: We make great product.

Speaker Change: It's connecting with the customer so that.

Speaker Change: That continues to be big for us not being pumping slightly facetious it definitely was.

Speaker Change: Definitely lots of chilled stock it was cold and wet and it was interesting that for the first months of the quarter we were actually.

Speaker Change: We're actually selling swim with outerwear.

Speaker Change: Which has never happened to us before so we saw that business pick up and get on this trend I think will continue to see it go on this trend.

Andrew McLean: Andrew, you want to talk about footwear and shoes? Yeah, I mean, the other color in there, Eric, is the... It's the reach that we get by being in other channels. You know, being in the clubs and being in the wholesale is absolutely huge for us. And I don't want to diminish. the opportunity there of how far we can go. I think the adjunct to that coming out of the conversation we just had about Europe is that this opens us up globally as well to significant opportunities.

Speaker Change: Our view is is that with the product that we've got and which that is getting that there is opportunity for us.

Speaker Change: I do want to put in a plug for that.

Lance: Lance and team.

Speaker Change: Really worked hard to put this collection together I think is a splendid collection.

Speaker Change: Great. Good luck for the rest of the year.

Eric: Thanks, Eric.

Speaker Change: And we'll move next to Steve Silver of Argus Research. Your line is open.

Steve Silver: Thanks, operator, and thanks for taking my questions.

Steve Silver: My first question is really about the outfitters business in general, particularly on the enterprise side, just curious as to whether there's been any.

Steve Silver: Implied hesitancy across the pipeline for all theaters given all the macroeconomic noise that we're dealing with every day.

Andrew McLean: Kids came out of the gate strong. We've been really happy with the transition we made. And Kids was an emotional one for Lands End because it's always been in the kids' business and inside a vertical retailer. That's something that almost every one of my employees wanted to hang on to. And I felt that we needed to concentrate on our best set because we're not a $10 billion company. Not yet, give us a couple of years. You know, so it was, who do you lead in and work with? And so we found the best, what we believe to be the best partner out there.

Steve Silver: Just curious as to whether it's really business as usual in terms of enterprise prospects moving forward.

Steve Silver: With these kind of discussions or if any any companies that you're talking to or getting a little bit more like a wait and see mode, given everything thats going on in the macro environment.

Steve Silver: So the answer.

Steve Silver: It's a little surprisingly so.

Steve Silver: Went through the cycles with everyone else yourself included which was Oh, there's going to be a bump because everyone's going to pull forward to get ahead of tariffs.

Andrew McLean: And they've done a great job. We see tremendous sales on our own website from Kids. And it's not just discounted sales or it's not just add-on sales. It's customers coming and buying at or near full price. And they're specifically buying for Kids. And what a great adjunct that is for our school uniform business, which we're seeing a lot of growth from as well, where we like put the two side by side and it's like, you've got like good symbiosis.

Steve Silver: And then there's going to be a debt because everyone's got ahead of tariffs and then theres going to be a slowdown and.

Steve Silver: And we saw none of that we saw very we saw very consistent business and I think that that I think is a testament to our teams engaged with the market.

Steve Silver: I think it's also a testament to strengthen the enterprise businesses out there.

Steve Silver: That we're continuing to see that consistency from them. So.

Andrew McLean: I wanna put a plug in for Backpack Day, which is coming up. That's gonna be huge for us. And again, it's something we work with our partner on. And their ability to actually increase the penetration of Lands End Kids out into the other channels and to a wider population. Again, I just can't diminish that. That is extremely powerful for us.

Steve Silver: Right now today, I feel pretty good about that business and.

Steve Silver: It's showing its showing consistent strength.

Steve Silver: <unk>.

Speaker Change: Again, like you I, probably wasn't necessarily expecting was going to come through.

Speaker Change: Great and one more if I may you mentioned in your prepared remarks about.

Andrew McLean: Shoes is gonna be slower. You know, it's the newness works really well for us. I think we were slow because we tried to reinvent, sorry, we tried to go with what the original shoes were. I was gonna say silhouettes, but that doesn't work for shoes. We really took the original assortment and we kept that. We've turned that on its head now. We've started to go to much more newness and we've been more aggressive about that. And so we're seeing a lot, we're seeing that work a lot and it works back to SWIM.

Speaker Change: Increasing the customer file through SMS subscriptions and the like I'm curious as to how that.

Speaker Change: <unk> made a compares just in context to previous campaigns, where the customer file was expanded and just in terms of maybe how many of those new subscribers showed stickiness and not unsubscribing once they've taken advantage of.

Speaker Change: The product that brought them into the system in the first I was just trying to get some context there in terms of the stickiness of some of these new customer adds.

Andrew McLean: So pick up on Marni's question, which is, again, we'll see her wear the slides. She's gonna wear the whole uniform from the beach, the whole uniform from the pool to go to dinner. And I think that gives us a lot of hope. And we're seeing actually the clubs start to get interested in choosing that as well. And I like that, because that puts us in front of hundreds of millions of people. Yeah, we've been seeing that in the catalogs with the shoes becoming much more wider in terms of styles and trends here going forward.

Speaker Change: Yes.

Speaker Change: The number we call. It that is a great question and actually the number we call it out.

Speaker Change: I think you would key on in the script is that one to two X customer because thats exactly I think where you're going in that answer that question.

Speaker Change: You can pay paid search to very strong traditional method, we'll get you that one times customer but.

Speaker Change: Where you really get them in as is.

Eric Beder: In terms of B2B, the Delta contract coming up, could you remind us historically how these kind of contracts launch? If I remember correctly, there's a big bump initially, and then they have a nice flow afterwards. And what should we be thinking about? In terms of back to school, I know that the competitor disappeared. When did you think that's going to be fully manifested? And we're going to see that in terms of the flow here this year also. Yeah, Eric, as far as Delta goes, It isn't necessarily at the beginning or end of a contract that there's that there's large flows.

Speaker Change: Making them at two times customer and we saw significant growth in that and I think that's a testament to how we've chosen to market and the brands that we're choosing to market which is.

Speaker Change: We're not trying to sell so much on discounting we're trying to stand behind the quality of our products the fashion of our product and the experience that you have coming to lands end and we were really excited to see.

Speaker Change: One times customer become a two times customer at the rate they did and how it builds our LTV relative to cost does that sort of sub part to this question, which is worth covering which is we're doing less paid search than we were doing more in channels, where I think kind of a fuller express.

Bernard McCracken: It's when they decide to launch a new product line. Our current, our current agreement with Delta, you know, does not have a near term, new launch of product there, they're working on that themselves. So this will be just the normal run rate that we experienced with them historically.

Speaker Change: <unk> of the brand. So for example in social we do a lot on that.

Speaker Change: The question that we will.

Speaker Change: We'll ourselves beyond ticked up we are certainly on tech talk through our Influencers and I think it's about reaching customers more individually are three cohorts that they follow I mean, I think the whole park co lap that we do and we continue to co lap with has been really powerful for us in reaching a whole new customer.

Bernard McCracken: Okay, in terms of back to school uniforms. You know, we're, we're excited about the volume that we added. Andrew noted in his comments that there's $13 million of new customer schools that we have added over the last six months, as one of our competitors exited the industry. So we are, you know, Back to Schools tends to start in June for us, and then play out through September. So we're excited for the effects on Q2 of that new added business. One of the things that we like about this year, that's just worth noting, because I know it's a lot of implications for all Back to Schools is we're seeing Back to School line up very closely with 2024 Back to School.

Speaker Change: So.

Speaker Change: Hope that answers your question I think the other thing I'd throw in there actually is.

Speaker Change: We're starting to look more and more about using.

Speaker Change: AI agents to market to customers.

Speaker Change: We see a lot of search now whether you're on safari or whether you are in Google Youre getting an answer offered to you from an AI agent. So more of our marketing is starting to go against that and while it's a very small base.

Speaker Change: It has tremendous growth associated with that and we see that as the sky's the limit as we use.

Bernard McCracken: So it should be relatively calm is the way we're viewing it.

Speaker Change: Use and deploy more AI based tools in the business.

Eric Beder: And last question. You mentioned in your release about SWIM. Do you look, and I agree that the product has materially improved. Do you believe that's just because of some ways and timing of the weather in some of the pieces? I know it's been colder year over year in certain areas. How should we be thinking about that?

Speaker Change: Great I appreciate all the color.

Steve Silver: Thanks, Steve.

Speaker Change: And this does conclude our question and answer session as well as the Lands' end first quarter 2025 earnings call. You may now disconnect your lines and everyone have a great day.

Andrew McLean: Thank you. No, Eric, we improved it ourselves. I keep telling you this. It's just like we make great product and it's connecting with the customer. So that continues to be big for us. No, I'm being slightly facetious. It definitely was a chilled start. It was cold and wet and it was interesting that for the first month of the quarter we were actually outselling SWIM with outerwear, which has never happened to us before. So we saw that business pick up and get on this trend. I think we'll continue to see it get on this trend. And our view is that with the product that we've got and the reach that it's getting, that there is opportunity for us.

Speaker Change: [music].

Speaker Change: Okay.

Andrew McLean: But I do want to put in a plug for the Lands End teams who've really worked hard to put this collection together. I think it's a splendid collection.

Eric Beder: Great. Good luck the rest of the year.

Steve Silver: And we'll move next to Steve Silver of Argus Research. Your line is open. Thanks, operator, and thanks for taking my questions. My first question is really about the outfitter's business in general, particularly on the enterprise side. Just curious as to whether there's been any implied hesitancy across the pipeline for outfitters given all the macroeconomic noise that we're dealing with every day. Just curious as to whether it's really business as usual in terms of enterprise prospects moving forward with these kinds of discussions, or if any companies that you're talking to are getting a little bit more like a wait-and-see mode given everything that's going on in the macro environment.

Steve Silver: It's a little surprisingly, no. So we went through the cycles with everyone else, yourself included, which was, oh, there's going to be a bump, because everyone's going to pull forward to get ahead of tariffs. And then there's going to be a dip because everyone's got ahead of tariffs, and then there's going to be a slowdown. And we saw none of that we saw very, we saw very consistent business. And I think that's a, I think it's a testament to how our teams engage with the market. I think it's also a testament to, you know, strengthen the enterprise businesses out there, that we're continuing to see that consistency from them.

Andrew McLean: So Right now today, I feel pretty good about that business. And it's it's showing it's showing consistent strength. Again, like you, I probably wasn't necessarily expecting was going to come through. Great.

Steve Silver: And one more if I may. You mentioned in your prepared remarks about increasing the customer file through like SMS subscriptions and the like. I'm curious as to how that maybe compares just in context to previous campaigns where the customer file was expanded and just in terms of maybe how many of those new subscribers showed stickiness and not unsubscribing once they've taken advantage of the product that brought them into the system in the first place.

Andrew McLean: Just trying to get some context in terms of the stickiness of some of these new customer ads. Yeah, that the number we called that as a great question, actually, the number we called out that I think you would key on in the script is that one to two x customer. Because that's exactly I think, where you're going. And that answers that question. Yeah, it You can page search the very sort of traditional method will get you that one times customer. but where you really get them in is. making them a two times customer. And we saw significant growth in that.

Andrew McLean: And I think that's a testament to how we've chosen to market and the brand that we're choosing to market, which is, we're not trying to sell so much on discounting, we're trying to stand behind the quality of our product, the fashion of our product, and the experience that you have coming to Lands End. And we were really excited to see the one times customer become a two times customer at the rate they did, and help build our LTV relative to the cost.

Andrew McLean: There's a sort of sub part to this question, which is worth covering, which is, we're doing less paid search than we were, and we're doing more in channels where I think we can have a fuller expression of the brand. So for example, in social, we do a lot on Insta now, it's not out of the question that we'll can, we will ourselves be on TikTok, we are certainly on TikTok through our influencers. And I think it's about reaching customers more individually or through cohorts that they follow. I mean, I think the whole Park collab that we do, and we continue to collab with Park has been really powerful for us in reaching a whole So I hope that answers your question.

Andrew McLean: I think the other thing I'd throw in there actually is. We're starting to look more and more about using AI agents to market to customers. So we see a lot of search now, whether you're on Safari or whether you're in Google, you're getting an answer offered to you from an AI agent. So more of our marketing is starting to go against that. And while it's a very small base, it has tremendous growth associated with that. And we see that as the sky's the limit as we use and deploy more AI-based tools in the business. Great, I appreciate all the color.

Steve Silver: Thanks, Steve. See ya.

Operator: And this does conclude our question and answer session, as well as the Lands End First Quarter 2025 Earnings Call. You may now disconnect your lines, and everyone have a great day.