Background and Basis of Presentation |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
May 01, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Background and Basis of Presentation | NOTE 1. BACKGROUND AND BASIS OF PRESENTATION
Description of Business
Lands’ End, Inc. (“Lands’ End” or the “Company”) is a leading digital retailer of solution-based apparel, swimwear, outerwear, accessories, footwear, home products and uniforms. Lands’ End offers products online at www.landsend.com, through third-party distribution channels, and its own Company Operated stores. Lands’ End also offers products to businesses and schools, for their employees and students, through the Outfitters distribution channel. Lands’ End is a classic American lifestyle brand that creates solutions for life’s every journey. References to www.landsend.com do not constitute incorporation by reference of the information at www.landsend.com, and such information is not part of this Quarterly Report on Form 10-Q or any other filings with the SEC, unless otherwise explicitly stated.
Terms that are commonly used in the Company’s Notes to Condensed Consolidated Financial Statements are defined as follows:
• ABL Facility – Asset-based senior secured credit agreement, providing for a revolving facility, dated as of November 16, 2017, with Wells Fargo Bank, N.A. and certain other lenders, as amended to date
• 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
• Company Operated stores – Lands’ End retail stores in the Retail distribution channel
• Debt Facilities – Collectively, the Term Loan Facility and ABL Facility
• Deferred Awards – Time vesting stock awards
• FASB – Financial Accounting Standards Board • First Quarter 2026 – The 13 weeks ended May 1, 2026 • First Quarter 2025 – The 13 weeks ended May 2, 2025
• Fiscal 2026 – The 52 weeks ending January 29, 2027
• Fiscal 2025 – The 52 weeks ended January 30, 2026
• Fiscal 2024 – The 52 weeks ended January 31, 2025
• GAAP – Accounting principles generally accepted in the United States
• JV – Joint venture with WHP Global in which the Company owns 50% of the joint venture entity, LE Topco, LLC
• Option Awards – Stock option awards
• Performance Awards – Performance-based stock awards
• SEC – United States Securities and Exchange Commission
• SOFR – Secured Overnight Funding Rate
• Target Shares – Number of restricted stock units awarded to a recipient which reflects the number of shares to be delivered based on achievement of target performance goals
• Term Loan Facility – Term loan credit agreement, dated as of December 29, 2023, among the Company, Blue Torch Capital, as Administrative Agent and Collateral Agent, and the lenders party thereto • WHP Global – WH Topco, L.P. (d/b/a WHP Global) • WHP Transaction – The transaction 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
Basis of Presentation
The Condensed Consolidated Financial Statements include the accounts of Lands’ End, Inc. and its subsidiaries. The Company holds a 50% interest in the JV, which it accounts for under the equity method. All intercompany transactions and balances have been eliminated.
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all material adjustments which are of a normal and recurring nature necessary for a fair presentation of the results for the periods presented have been reflected. Dollar amounts are reported in thousands, except per share data, unless otherwise noted. Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in the Lands’ End Annual Report on Form 10-K filed with the SEC on March 26, 2026.
Macroeconomic Challenges Macroeconomic issues which impact consumer discretionary spending, such as realized inflation-based price increases and high interest rates have continued to have an impact on the Company’s business. Apparel purchases historically have been influenced by domestic and global economic conditions, which may negatively impact customer demand and may require higher levels of promotion in order to attract and retain customers. Macroeconomic challenges may lead to increased cost of raw materials, packaging materials, labor, energy, fuel, debt and other inputs necessary for the production and distribution of the Company’s products. Moreover, uncertainty with respect to trade policy and tariffs, including increased tariffs applicable to countries where the Company’s vendors manufacture Lands’ End product, may result in an increase in the cost of the Company’s products. 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 Costs
The Company has incurred restructuring and other charges related to cost optimization of business operations and exploring strategic alternatives. During First Quarter 2026 and First Quarter 2025, the Company incurred ongoing costs related to exploring strategic alternatives for the Company to maximize shareholder value and has included those costs as part of restructuring and other. This process culminated in the WHP Transaction. Additionally, during First Quarter 2025, the Company reduced approximately 6% of its 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.
The following table summarizes the restructuring and other costs recognized in Other operating expense, net in the Condensed Consolidated Statement of Operations for the 13 weeks ended May 1, 2026 and May 2, 2025:
Included in Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets are approximately $2.1 million of Strategic alternatives and other costs and $0.7 million of Employee severance and benefit costs as of May 1, 2026 and approximately $1.8 million of Employee severance and benefit costs and $0.7 million of Strategic alternatives and other costs as of May 2, 2025. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||