Lands End 2026 Q1 Earnings Misses Targets as Net Loss Widens 28%

Lands' End (LE) reported its fiscal 2026 Q1 earnings on Jun 05th, 2025. The company missed revenue expectations due to an 8.5% decline from the previous year, driven by challenges in its European segment and licensing transitions. Despite these headwinds, Lands' End maintained its guidance for fiscal 2026, anticipating net revenue between $1.33 billion and $1.45 billion and adjusted EBITDA of $95 million to $107 million. The strategic alternatives process, including potential mergers or sales, remains ongoing, with no further updates provided at this time.

Revenue
The total revenue for Lands' End in Q1 2026 saw a decrease of 8.5% to reach $261.21 million, compared to $285.47 million in Q1 2025. U.S. eCommerce operations contributed $170.75 million, while the Outfitters segment added $42.92 million. Third-party sales accounted for $14.08 million, and Europe eCommerce brought in $17.85 million. Licensing and Retail segments generated $15.61 million, rounding out the total net revenue of $261.21 million.

Earnings/Net Income
Lands' End's losses deepened to $0.27 per share in 2026 Q1, widening from a loss of $0.20 per share in 2025 Q1, a 35% increase. The company's net loss also grew to $-8.26 million in 2026 Q1, marking a 28.3% increase compared to the $-6.44 million loss in 2025 Q1. This performance indicates a weakening in earnings per share.

Price Action
The stock price of Lands' End jumped 9.69% during the latest trading day, edged up 2.41% during the most recent trading week, and increased 8.76% month-to-date.

Post-Earnings Price Action Review
Investors adopting a strategy of buying Lands' End shares on revenue misses and holding them for 30 days experienced poor outcomes. The strategy resulted in a -20.06% return, significantly underperforming the benchmark return of 78.25%, leading to an excess return of -98.31%. The Sharpe ratio was -0.06, indicating substantial risk involved in this approach. The maximum drawdown reached -84.75%, with volatility measured at 68.42%, underscoring the considerable instability in stock performance under this strategy. Overall, the strategy failed to deliver positive results, emphasizing the importance of careful consideration of market conditions and strategic adjustments when investing in Lands' End.

CEO Commentary
Andrew J. McLean, CEO & Director, highlighted that Lands' End continues to execute its customer-centric strategy through creative engagement and brand expansion, achieving low single-digit GMV growth and a 12% improvement in adjusted bottom line. He emphasized the company’s record gross margin rate at nearly 51%, attributing this success to improved supply chain resiliency and a shift towards production in the Western Hemisphere. McLean expressed optimism about leveraging digital marketing strategies and innovative product offerings, particularly with the Tote Girl summer campaign, while maintaining a strong focus on brand building and customer experience.

Guidance
For the full year, Lands' End expects net revenue between $1.33 billion to $1.45 billion, with GMV anticipated to achieve mid- to high single-digit growth. Adjusted net income is forecasted at $15 million to $27 million, translating to adjusted diluted earnings per share of $0.48 to $0.86. The company also guides for adjusted EBITDA in the range of $95 million to $107 million, incorporating approximately $25 million in capital expenditures.

Additional News
Lands' End has initiated a strategic alternatives process, exploring options such as a sale, merger, or similar transaction to maximize shareholder value. Josephine Linden, chair of the board, emphasized the company's operational and financial improvements, despite market undervaluation. This decision follows pressure from major shareholder Edward Lampert, who advocated for a sale. The board aims to conduct a thorough process with advisory support from Perella Weinberg Partners and legal counsel Wachtell, Lipton, Rosen & Katz. No specific timeline or outcome assurances have been provided, and the company plans to update the public only when appropriate.