Lands’ End swings back to profit in Q2 as net revenue rises 2.7%

In the second quarter of 2026, Lands' End reported a return to profitability with net revenue increasing by 2.7% year-on-year to $302 million. Gross profit rose to $157 million, reflecting a significant 32 basis point increase in gross margin to 52.0%. This improvement was driven by tariff refunds under the International Emergency Economic Powers Act (IEEPA), while costs from a new joint venture royalty structure and temporary expenses from a warehouse management system rollout partially offset the gains.

The company's US e-commerce segment showed the strongest growth, with revenues up 9.0% to $182.4 million, outpacing earlier disruption caused by the implementation of a new warehouse management system. Lands' End Outfitters experienced a 4.4% year-over-year revenue increase to $69.3 million, primarily driven by enterprise accounts.

Europe's e-commerce revenues grew marginally by 0.5% to $19.7 million due to a shift towards a franchise-focused product mix. However, third-party sales fell 20.4% to $17.2 million as the company decided to reduce lower-margin promotional sales. Selling and administrative expenses increased to $135.3 million, or 44.8% of net revenue, due to heightened digital advertising spending and operational inefficiencies linked to the warehouse transition.

The company repurchased around 3% of its outstanding shares during the quarter, demonstrating a disciplined approach to capital allocation and confidence in the long-term value of Lands' End. Looking ahead, Lands' End expects third-quarter net revenue to fall between $300 million and $330 million, with a projected net loss of $1.0 million to net income of $3.0 million.

Adjusted net income is forecasted to range from $2.0 million to $6.0 million, with diluted earnings per share expected between $0.03 loss and $0.10 per share. For the full fiscal year 2026, Lands' End projects net revenue between $1.30 billion and $1.35 billion and net income in the range of $317.0 million to $325.0 million. Adjusted net income is anticipated in the range of $13.0 million to $21.0 million, with diluted earnings per share projected between $10.87 and $11.14.

Lands' End CEO Charlie Cole expressed optimism about the company's future, highlighting the use of brand strength and customer loyalty to strengthen customer engagement and expand digital capabilities.