Lands' End Q2 2026 Earnings Call: Contradictions in Tariff Strategy, Global Expansion, and Licensing Growth

The above is the analysis of the conflicting points in this earnings call

Date of Call: None provided

Financials Results

• Revenue: $294M, down 7% YOY
• EPS: $-0.06 adjusted EPS (net loss); prior-year comparison not provided
• Gross Margin: 49%, up ~90 bps YOY

Guidance:

• Q3 net revenue expected at $320M–$350M
• Q3 GMV growth: mid to high single digits
• Q3 adjusted net income: $3M–$7M; adjusted EPS: $0.10–$0.22
• Q3 adjusted EBITDA: $24M–$28M
• FY net revenue expected at $1.33B–$1.40B
• FY GMV growth: low to mid single digits
• FY adjusted net income: $19M–$27M; adjusted EPS: $0.62–$0.88
• FY adjusted EBITDA: $98M–$107M
• Capex for FY: ~$25M
• Guidance includes current tariff impacts with mitigation measures in place

Business Commentary:

* Revenue and Traffic Trends: - Lands' End reported total revenue of $294 million for Q2 2025, a 7% decrease compared to the same quarter last year, with GMV approximately flat year over year. - The decline was primarily driven by a slow start to the swim season and supply chain challenges in Europe, partially offset by growth in licensing and marketplace sales.

• Licensing and Marketplace Growth:
• The company's licensing business grew 19% year over year, with particularly strong performance in club stores.

• This growth was fueled by increased brand visibility and the expansion of reach through licensing partnerships, contributing significantly to the total revenue.

• Commercial and School Uniform Performance:

• The B2B business, including commercial uniforms and school uniforms, saw growth in both top and bottom-line performance, with significant increases in contract duration and new customer acquisitions.

• This was attributed to building scale with enterprise customers and leveraging the strength of the Lands' End brand for school uniforms.

• U.S. E-commerce and Targeted Marketing:

• The U.S. e-commerce business saw sales decrease 11%, driven by the slow start to the swim season.

• However, the company's strategy of investing in targeted marketing and elevating the site experience led to strong momentum coming into Q3, with a significant increase in new customer sign-ups over Labor Day weekend.

• Tariff Management and Mitigation:

• Lands' End is managing the impact of tariffs through strategic repositioning of their sourcing network and vendor relations.
• They are mitigating near-term tariff impacts by sharing the burden with vendors and absorbing a small increase in costs without fully passing it on to customers.

Sentiment Analysis:

• Revenue declined 7% YOY to $294M with adjusted net loss of $1.9M ($0.06/share). Gross margin improved to 49% (+~90 bps YOY). Management cited strong momentum into Q3, including the best Labor Day sales and margin in a decade, and issued Q3 revenue guidance of $320–$350M and FY revenue of $1.33–$1.40B. GMV was approximately flat YOY.

Q&A:

• Question from Dana Telsey (Telsey Advisory Group): What is driving the top-line acceleration by category and channel, how are promotions and pricing changing amid tariffs, and how does the Lands’ End Essentials line fit?
  Response: Momentum is broad-based as the distributed commerce model scales; Essentials on Amazon drives traffic and new customers; promotions are more targeted by channel; tariffs are mostly mitigated via sourcing/vendor sharing with modest price increases to consumers.

• Question from Eric Beder (SCC Research): How should we think about licensing flow and category expansion in the back half?
  Response: Licensing is up ~36% YTD (Q2 +19%); existing licensees are ramping and new ones coming, with added categories (e.g., footwear) and a coordinated “house of Lands’ End” approach to major retailers to accelerate growth.

• Question from Eric Beder (SCC Research): Strategy for outerwear this year after last year’s shift to lighter wear-now items?
  Response: Deepen successful franchises like Squall with new innovation and enhanced PDPs; early reviews are strong; focus on better storytelling over adding new franchises.

• Question from Eric Beder (SCC Research): Response of the 35–50 demographic and catalog strategy vs. the core customer?
  Response: 35–50 new-to-file customers are growing and buying across categories; catalogs are segmented and used offensively to drive second purchases and lapses, with tailored creative by cohort to boost basket size.

• Question from Steve Silver (Argus Research): State of the Outfitters pipeline and progression of opportunities?
  Response: Pipeline is strong across school uniforms (OEKO-TEX edge), small-business upgrades, and enterprise wins (e.g., Delta); expanding into adjacent areas like healthcare; specifics not disclosed.

• Question from Steve Silver (Argus Research): Timeline and approach for improving Europe and returning it to contribution?
  Response: Applying the distributed commerce model with strong starts on Next, Debenhams, and Amazon; UK stabilizing; targeting German resolver via catalog; designer collaborations coming; expect back-half improvement and longer-term contribution.