v3.26.1
Segment Reporting
 3 Months Ended
May 01, 2026
Segment Reporting [Abstract]  
Segment Reporting

NOTE 13. SEGMENT REPORTING

The Company identifies operating segments according to how business activities are managed and evaluated. The Company’s operating segments consisted of: U.S. eCommerce, Europe eCommerce, Outfitters, Third Party, Licensing and Retail.

 

•
U.S. eCommerce offers products through the Company’s eCommerce website.

 

•
Europe eCommerce offers products primarily direct to consumers located in Europe through eCommerce international websites as well as third-party marketplace websites.

 

•
Outfitters sells uniform and logo apparel to businesses and their employees, as well as to student households through school relationships, located primarily in the U.S.

 

•
Third Party sells products direct to consumers through third-party marketplace websites.

 

•
Licensing earned royalties on the use of the Lands’ End trademark and any fulfillment fees for fulfillment services provided by the Company through the closing of the WHP Transaction. Effective April 1, 2026, the licensing segment earns fulfillment fees for fulfillment services provided by the Company.

•
Retail sells products through the Company Operated stores, located in the U.S.

The internal reporting of these operating segments is based, in part, on the reporting and review process used by the Company’s chief operating decision maker (“CODM”), its Chief Executive Officer. The CODM assesses segment performance based on variable profit, which is defined as net revenue minus cost of sales and variable selling expenses. The Company’s CODM monitors actual segment variable profit results relative to operating plan and forecast to assess the performance of the business and allocate resources. The CODM does not utilize segment asset information to evaluate performance and make resource allocation decisions, and thus such disclosures are not provided. Variable profit is a non-GAAP financial measure, which management believes provides useful information to investors and to the CODM in order to assess segment performance. A reconciliation of variable profit to consolidated income (loss) before income taxes is set forth below.

The Company determined the U.S. eCommerce, Outfitters and Third Party operating segments share similar economic and other qualitative characteristics, and therefore the results of these operating segments are aggregated into the U.S. Digital segment. The Europe eCommerce, Licensing and Retail operating segments are not quantitatively significant to be separately reported.

The Company has determined its significant segment expense categories based on amounts regularly provided to the Company’s CODM to evaluate segment profitability and drive strategic decision making. The following presents U.S. Digital segment sales and expenses:

 

 

13 Weeks Ended

 

 

13 Weeks Ended

 

 

 

May 1, 2026

 

 

May 2, 2025

 

(in thousands)

 

Segment

 

Total

 

 

Segment

 

Total

 

Net revenue

 

$

205,123

 

$

205,123

 

 

$

227,752

 

$

227,752

 

All other net revenue (1)

 

 

 

 

33,793

 

 

 

 

 

33,456

 

Total consolidated net revenue

 

 

 

$

238,916

 

 

 

 

$

261,208

 

Product cost of goods sold

 

 

76,527

 

 

 

 

 

83,601

 

 

 

Shipping cost of goods sold

 

 

30,514

 

 

 

 

 

26,916

 

 

 

Other cost of goods sold (2)

 

 

4,207

 

 

 

 

 

2,273

 

 

 

Marketing costs

 

 

39,502

 

 

 

 

 

39,933

 

 

 

Variable personnel costs

 

 

14,093

 

 

 

 

 

15,570

 

 

 

Other segment expenses (3)

 

 

6,207

 

 

 

 

 

6,565

 

 

 

Segment variable profit

 

$

34,073

 

 

 

 

$

52,894

 

 

 

 

(1)
All other net revenue is from Europe eCommerce, Licensing and Retail that does not meet the quantitative thresholds
(2)
Other cost of goods sold includes royalty expense, donations and other miscellaneous cost of goods sold
(3)
Other segment expenses include credit card fees, customer service, webhosting, supplies and other miscellaneous expenses

 

 

The reconciliation between segment variable profit to consolidated income (loss) before income taxes is as follows:

 

 

 

13 Weeks Ended

 

 

13 Weeks Ended

 

(in thousands)

 

May 1, 2026

 

 

May 2, 2025

 

Segment variable profit

 

$

34,073

 

 

$

52,894

 

All other variable profit (1)

 

 

4,978

 

 

 

5,844

 

Depreciation expense

 

 

(6,100

)

 

 

(8,291

)

Unallocated corporate expenses (2)

 

 

(77,059

)

 

 

(52,817

)

Gain on WHP Transaction

 

 

491,622

 

 

 

—

 

Loss on extinguishment of debt

 

 

(9,172

)

 

 

—

 

Interest expense

 

 

(5,514

)

 

 

(9,265

)

Other income (loss), net

 

 

(136

)

 

 

11

 

Income (loss) before income taxes

 

$

432,692

 

 

$

(11,624

)

 

(1)
All other variable profit is from Europe eCommerce, Licensing and Retail that does not meet the quantitative thresholds
(2)
Unallocated corporate expenses include fixed personnel costs, strategic alternative costs, incentive compensation, office occupancy, information technology and professional fees

 

 

 

Net revenue is presented by distribution channel in the following tables:

 

 

 

13 Weeks Ended

 

% of Net

 

 

13 Weeks Ended

 

% of Net

 

(in thousands)

 

May 1, 2026

 

Revenue

 

 

May 2, 2025

 

Revenue

 

Net revenue:

 

 

 

 

 

 

 

 

 

 

U.S. eCommerce

 

$

153,338

 

 

64.2

%

 

$

170,747

 

 

65.4

%

Outfitters

 

 

38,494

 

 

16.1

%

 

 

42,923

 

 

16.4

%

Third Party

 

 

13,291

 

 

5.6

%

 

 

14,082

 

 

5.4

%

Total U.S. Digital Segment Revenue

 

 

205,123

 

 

 

 

 

227,752

 

 

 

Europe eCommerce

 

 

20,527

 

 

8.5

%

 

 

17,851

 

 

6.8

%

Licensing and Retail

 

 

13,266

 

 

5.6

%

 

 

15,605

 

 

6.0

%

Total Net revenue

 

$

238,916

 

 

 

 

$

261,208