Lands' End, Inc.

Good day everyone and welcome to the Lands End first quarter 2025 earnings call. At this time all participants are in a listen only mode. Later you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing star 1 on your telephone keypad. You may withdraw yourself from the queue by pressing star 2. Please note this call may be recorded. I'll be standing by if you should need any assistance. It is now my pleasure to turn the program over to Tom Althos.

Good morning, and thank you for joining the Land's End Earnings Call for a discussion of our first quarter 2025 results, which were released this morning and can be found on our website, landsend.com. I'm Tom Althos, Land's End Senior Director of Financial Planning and Analysis, and I'm pleased to join you today with Andrew McClain, our Chief Executive Officer, and Bernie McCracken, our Chief Financial Officer. After the prepared remarks, we will conduct a question and answer session. Please also note that the information we're about to discuss includes forward-looking statements. Such statements involve risk and uncertainties. The company's actual results could differ materially from those discussed on this call. Factors that could contribute to such differences include but are not limited to those items noted and included in the company's SEC filings. including our annual report on Form 10-K and quarterly reports on Form 10-Q. The forward-looking information that is provided by the company on this call represents the company's outlook as of today, and we do not undertake any obligation to update forward-looking statements made by us. Subsequent events and developments may cause the company's outlook to change. During this call, we will be referring to non-GAAP measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. Reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures can be found in our earnings release issued earlier today, a copy of which is posted in the investor relations section of our website at landsend.com. With that, I will turn the call over to Andrew.

Thank you, Tom. Good morning, and thank you for joining us today. We continue to execute our proven customer-centric strategy through creative engagement, viral moments centered around reimagining of our iconic totes, expansion of our brand through licensing, and, of course, fresh solutions-based product. In addition, the period was characterized by improvement in the resiliency of our supply chain to maintain our momentum throughout fiscal 2025. Most pleasing was the continued performance at the top and bottom of our P&L, with growth in GMB, which was low single digits positive when adjusted for prior year inventory sell-off, and a 12% improvement in our adjusted bottom line as we continued to flow through higher levels of incremental profitability, all accomplished on a faster inventory turn and with improved working capital. As always, our focus remains on building our brand, maintaining discipline around promotional activity, and staying the course to develop a healthier long-term brand. This resulted in a record gross margin rate for the quarter, with our margin rate just shy of 51% and 210 basis points greater than last year. These are strong foundations upon which to build. We intentionally drove significant change in our supply chain as we accelerated production in the Western Hemisphere, giving us both speed and additional avenues to mitigate tariffs and provide resiliency. Less than 8% of our purchase order dollars last fiscal year were utilized on buys out of China, while our supply of key franchises, including our sector-leading American-grown Supima, are now co-sourced across the globe. By intentionally creating a diverse sourcing network and strong relationships with excellent vendors, we are increasingly positioned to remain agile in our sourcing decisions, helping to address headwinds from the impact of tariffs. Innovation is the key to our successful brand building. As I touched on last quarter, we're leveraging digital and experiential marketing strategies that build our cultural relevancy, drive traffic to our own channels, and translate to new customer conversion. We recently launched our Tote Girl Summer campaign, which features brand fans and influencers on social media and a series of pop-up shops across iconic summertime locations. The campaign introduces lovers of our iconic canvas pocket tote to a wider assortment of Land's End apparel and swim products that fit their lifestyle as perfectly as our pocket tote. We kicked off Memorial Day weekend with pop-up shops throughout the Hamptons, Jersey Shore, Charleston, and Nashville, and will host further coastal pop-ups, including the Nantucket Hotel, in June, July, and August. These viral moments, covered extensively on TikTok and Instagram, saw these one-of-a-kind totes changing hands after purchase. As a reminder, our pocket tote remains our number one item in driving new customer acquisition and consistently attracts customers from all age ranges, notably driving brand awareness with a younger Gen Z and millennial cohort. We also improved our customer experience in the first quarter through our focus on offering greater personalization, including the launch of a new AI-driven recommendation and outfitting engine that makes it easier for customers to personalize products. In addition, we improved our SMS marketing program capabilities, generating nearly 400,000 new subscribers in Q1. Picking up on our customer, our willingness to protect the brand continued to yield results with growth in new customers supplemented by increases in one to two times buyers and our highest LTV, five times buyers. Renewing our customer file, reaching a broader base of consumers, and leveraging our franchise products like Swim and Supima remain priorities as we build long-term shareholder value. Turning to product, with the late Easter and colder weather pushing Swim selling back, our Wonderweight and Squall outerwear franchises were key winners for us in the quarter, as were our Wear Now items, like our Any Weather fleece and barn coats. Women's bottoms, knits, sweaters, and dresses also performed successfully. Once the swim season kicked into gear, we saw good engagement with our core franchises. Tugless, a 40-year-plus stalwart of the category, has expanded exponentially, building on the original one-piece silhouette to offer two-piece, cross-body dresses, rompers, and backless in a range of colors and prints. This continued focus on winning with market-leading franchises is a core brand platform that we are extending across channels and licenses to broaden distribution and create long-term shareholder value. Turning to the performance of our various businesses, beginning with our asset-light B2C activities. Our asset licensing business had a strong first quarter and continues as a significant vehicle for growth of the Land's End brand, with revenues up over 60% year-on-year. Within the channels, we saw success in both the clubs and traditional department stores as the brand continues to reach new customers and offers incredible price and value. During the quarter, we completed the negotiation of additional licenses for travel accessories, men's underwear and base layer, and women's intimates. Our activity continues into the second quarter as we recently executed licenses for hosiery and cold weather accessories. The skill sets that the company is developing around the licensing of its IP and its integration of a leading channel and category experts to augment its core competencies in e-commerce continues to set it apart from competitors and offers Land's End strategic options for significant future growth. Turning to our B2B Outfitters business, I am pleased to note that B2B delivered our revenue and profit objectives for the quarter. We saw strong performance across our enterprise business, as well as growth in our school uniform business. We're pleased to launch a partnership with Delta Airlines in the second quarter, to serve as their uniform provider through the end of 2027. We're excited to be working with Delta again as we finalize the details of our collaboration together. Our school uniform business saw strong new customer growth in the quarter with commitments in annualized new business of $13 million, driven from a focus on leveraging our strength as a sector leader to drive outreach across the country and supplemented by a competitor exiting the segment. As previously noted, we have the most domestic embroidery capabilities of any retailer in the United States. We are continuing to win by leveraging the strength of our brand, our steadfast focus on quality, our market-leading embroidery and personalization capabilities, and our great customer service. Looking at our B2C business, domestically we sharpened the customer proposition between LandZen.com, and our third-party marketplaces using a proprietary AI tool to maximize rankings through application of product titles and descriptions. This has created significant growth across our Amazon, Macy's, and Nordstrom's marketplaces. For example, on Amazon, we obsess on ranking by focusing our efforts on our top 25 items, product page optimization, prime eligibility, and in-stock availability. By leading with these top performers, we can create algorithm-maximizing product titles and descriptions that drive search rankings complemented with solutions-driven imagery. We can achieve better margins, maintain efficient inventory levels, and turn faster. With new leadership, Europe began to show green shoots of progress to become the highly solutions-oriented, highly engaged, elevated brand that we know it is capable of being. During the quarter, we relaunched both the German and UK websites, taking a different marketing and assortment approach to each, supported by specific and local influencer talent. That work continued into marketplaces where we launched on next.com, our first true marketplace experience in Europe. This work to develop nuanced, customer-focused touch continues apace. In May, we relaunched a French catalog as a prelude to a full relaunch of a French language website next month. In June, we will begin selling on Debenhams.com, again creating a path to a specific customer with a specific experience. I'll now turn it over to Bernie to discuss our first quarter performance in more detail.

Thank you, Andrew. For the first quarter, total revenue performance came in at $261 million, a decrease of 9% compared to last year. When excluding the impact of transitioning the kids and footwear inventory to licensees in the first quarter of 2024, total revenue decreased by 4% year over year. GMB decreased low single digits for the first quarter of 2025, primarily driven by timing of orders. When excluding the impact of transitioning the kids and footwear inventory to licensees in the first quarter of 2024, GMB increased by low single digits year over year. We delivered adjusted EBITDA of $10 million in the first quarter, which came within our guidance. Gross profit decreased by 5% compared to last year. Gross margin was 51% in approximately 210 basis point increase from the first quarter of 2024. The margin increase was driven by the impact of transitioning kids and footwear inventory to licensees in the first quarter of fiscal 2024. Our U.S. e-commerce business saw approximately flat sales and gross profit compared to the first quarter of 2024. due to the continued strength in our outerwear product offset by a slow start to seasonal swim assortment. Sales from lands and outfitters increased 1% from the first quarter of 2024. Sales from the business uniform channel were slightly up year-over-year, and sales from our school uniform channel were slightly down year-over-year, driven by timing of customer orders. In our third-party marketplace business, gross profit dollars decreased by 11% compared to the first quarter of 2024, as revenue decreased by 9% year over year. While performance was consistently positive in most marketplaces, the combined third-party business was negatively impacted by challenges in one marketplace. Overall, marketplaces saw marked improvement in April. Our European e-commerce business sales year over year as new leadership used the quarter to relaunch as a more premium brand, eliminating lower value inventory and positioning for marketplace expansion. Revenues from our licensing business increased by over 60% compared to the prior year. Licensing and our presence across our third party marketplace partners continue to help the business diversify and reduce risk from any one individual partner. SG&A expenses decreased by $4 million year-over-year, driven by strong cost controls across the entire business. As a percentage of sales, SG&A was 47%, which was an increase of approximately 270 basis points compared to 2024, primarily driven by deleverage from lower revenues. For the first quarter, we had a net loss of $8.3 million, or 27 cents per share. We had an adjusted net loss of $5.4 million, or 18 cents per share, which were both within our guidance range. Moving to our balance sheet, inventories at the end of the first quarter were $262 million compared to $289 million a year ago. The 9% decrease in our inventory position resulted from our supply chain team's ongoing efforts to drive efficiencies and maintain resiliency and diversification with respect to our sourcing capabilities. In terms of our debt, at the end of the first quarter, our term loan balance was $244 million, and our ABL had $40 million of borrowings outstanding, which was flat to the first quarter last year. During the first quarter, we repurchased $3 million worth of shares under our $25 million share repurchase authorization announced in March of last year, bringing the balance of the remaining authorization to $11 million as of the end of the quarter. Now moving to guidance. For the full year, our guidance includes the impact of tariffs at 30% for China and approximately 10% for the rest of the world. We are implementing mitigation measures to effectively manage the tariff headwinds at these levels, and accordingly, our annual guidance remains unchanged as we continue to expect debt revenue to be between $1.33 to $1.45 billion, while GMV is expected to be mid- to high-single-digit growth. adjusted net income of $15 million to $27 million, and adjusted diluted earnings per share of 48 cents to 86 cents. And our adjusted EBITDA to be in the range of $95 million to $107 million. Our guidance for the full year incorporates approximately $25 million in capital expenditures. With that, I will turn the call back over to Andrew.

Thank you, Bernie. As always, I want to thank all of the Land's End employees for their dedication to building the brand and upholding our customer-centric strategy. Our commitment to delivering exceptional quality service and care to our customers is what continues to set us apart and help sustain our momentum. Finally, the process our Board of Directors initiated last quarter to explore strategic alternatives, including a sale, merger, or similar transaction involving the company to maximize shareholder value remains ongoing. We will not be commenting further on it at this time, and we will provide an update once appropriate. With that, we look forward to your questions.

Thank you. At this time, if you would like to ask a question, please press star 1 now on your telephone keypad. Again, to ask a question, that is star 1 to enter the queue. We'll take our first question from Dana Telsey of Telsey Group. Your line is open.

Good morning, everyone, and nice to see the progress. A couple questions. Typically, you provide the upcoming quarter guidance. I didn't see anything, I think, in the release this time. Any color you can give us on the complexion of the year and the cadence of what you're looking for? And within that, tariff impacts. Holistically, how are you thinking about it, both in terms of pricing and on inventory? And I have one follow-up. Thank you.

Morning, Dana. As far as guidance goes, you know, based on the near-term uncertainty with tariff rates, the company has provided annual guidance based on the current tariff rates, which, you know, we've talked about, which is the 10% baseline and the 30% for China, which comes to about an effective 12% rate for us in the back half. and that we put a lot of work into a transformation process to build mitigation efforts against those raised tariffs and feel strongly that we have the right mitigations to offset those for the year.

Dana, just a bit of color on your tariff impacts question. I mean, you know me, you know the company. It's like we're not going to sit around and wait for a solve later in the year. We rolled up our sleeves actually towards the end of Q4 and started shifting heavily into Western Hemisphere. So we were taking big programs, not the small programs. We took SUPIMA, which is one of our biggest programs. In fact, it is our biggest program, and we moved that to Western Hemisphere, actually in process of co-sourcing that in Eastern Hemisphere as well so that we've got a lot of pacing to go after it, to move with it, and to be able to react to it. And so we're taking... We're taking the pain of all those shifts way up front.

Got it. And then congratulations on the new Delta agreement. That's very encouraging. How is it different than the last agreement that you had or is it? And then on the marketplaces business, what are you seeing there? And it was encouraging to hear about Europe. What are your thoughts on the goals for Europe? Thank you.

Fair enough. Do you want to take Delta?

Sure. The Delta arrangement is a two-and-a-half-year completion of a contract they signed with another vendor that we will complete that, and we're in discussions on what the future of that will be beyond that.

In terms of marketplaces, we feel really good about marketplaces. Nordstrom continues to be the fastest growth marketplace for us. and actually it's really driven off the back of a very high AOV. It's the highest AOVs we've ever recorded, you know, as we just see a very premium customer come to the brand. So we're excited about that. Amazon's continued to grow for us along with Macy's. And, you know, we saw progress on Target as well that we were happy with. I believe your question probably has some calls embedded in it, and I do want to address that. We did have a tough quarter with calls, but I actually feel very optimistic about it and the trends that we're seeing out of the business. We had a reset with calls. I feel good about the direction we're seeing there and the selling we're getting, which is driven by actually also an increase in AOV. In terms of marketplaces in general, we feel very positive. Europe, I couldn't be more excited about. I actually think the opportunity for Land's End internationally is amazing. We just used the opportunity of the challenges we had late last year to really lean in and say, we want to create a halo for the U.S. brand. It's like we should be continually evolving this brand upwards, and it's like Europe is a great place to pick up on that cachet. And we started to do a lot of work around customer segmentation as much as anything. And we found that we can reach a customer from Debenhams to Next. to the UK, to Germany, but also, you know, we're looking at how we're really going to lean in to France now. We see that as a very fashion-forward market. We've always had sales to France, but we see that as a significant opportunity for us. And we see more market expansion coming off the back of that. So we're actually way more bullish on it than we necessarily were even three months ago.

Thank you.

Thanks, Dana.

Thanks, Dana.

We'll take our next question from Marnie Shapiro of Retail Tracking. Your line is open.

Hey, guys. Congratulations on the improvements. Could you talk a little bit about obviously SWMM was a highlight in the quarter. I'm curious about some of your other segments, you know, key segments like towels and things like that that you guys have focused on. And could you also just talk a little bit about the changes happening here? The site has been outstanding. really much more modern your storytelling it feels more youthful I guess can you talk about what's happening behind the scenes even your fashion is really on trend but not trendy and could you kind of roll out what we could expect to see especially with some big seasons coming up ahead with back to school and then winter with your outerwear business right now then money money you can just keep asking questions forever it's great

You know, I think that we wanted to be curious with us. We're the number one online brand for women over 40. And, you know, we felt we had the right, actually, and the opportunity to move the market. And I think we built a team from design to design. merchandising to tech design to sourcing that could really start to react to that. And we gave them the opportunity to be curious with the franchises. So you take Tugless, and you know, Tugless, I think everybody who knows Tugless thinks about it as it does exactly what it says on the tin, but it always comes in black and it always comes in the same silo. And we just felt that there was such an opportunity to reach a wider consumer. And, you know, we just started to get curious about what we were seeing around the world. And, you know, leveraging the comments that I was just making to Dana about Europe, we see so much trend coming out of places like France. And it's like there's no reason that, one, we shouldn't be servicing that. But there's another, which is that we should be starting to channel that. And so, as you know, we looked at... turning tugless into swim dresses, taking the back out of a tugless, making it into a two-piece, and actually hitting some of the real trends about having a romper tugless. It's been really powerful. And what we see is, you heard the numbers about how our customer is responding, it's really our existing customer responds to the existing product, but we have a whole new customer responding to the new product. And we are really excited about the dynamics of the customer we're seeing coming into the brand. It's like they're less age-oriented and they're more oriented towards the fit and style and aesthetic of Land's End. And that's a handwriting that we're trying to develop across the business. And, you know, I've got Kim and Matt and team. That's on the creative side of the business, really leaning in and challenging us every day to think about, you know, a different customer, a different consumer, and how we're going to consistently reach them. And so we're not going to compromise on that. We see an opportunity to remake the brand. Towels. I'm going to talk about towels and totes. You can put a towel in the tote, and I think this – I think what we've done is we've taken the tote and we've opened it up to, I mean, we have Gen A, let alone Gen Z coming in and grabbing at the totes. It's our number one acquisition vehicle for new customers. You saw the work that we did with the CoLabs over Memorial Day. We're selling back to that because the tote opens you up to sell the swim, to sell the towel, to sell the swim dress. And I think that's been incredibly powerful for us. The site, thank you for the site. We've done a lot with the site. We think we can do more with the site. And what we're trying to do is open up the various channels to find different shoppers. So I talked about being on next.com or I talked about being on nordstroms.com. And I think that, you know, we find different customers there. I would point you to some of the work we're doing in Europe. You should take a look at landsend.co.uk and the .de site as well to get some perspective of how we're not even so much regionalizing, but personalizing to those markets is becoming key to us because I've always believed that It's about the individual customer and the experience they're having, and the more we can personalize that, the better. Fashion and trends that's coming up. We drop our June catalog next week. I'm really curious to see what you think about it, and I'd love to talk to you about it. I'm going to leave it at that.

By the way, I just popped onto the UK site, and it's so different. It feels like a European site, not an American site. which is a good thing. Can I just ask you one quick follow-up? You're getting a lot of new people in on totes. Are you able to transition them into other products? And I guess, where do they move from totes? Where's the next place? Do they go to towels, or is it swim, or is it dresses? I'm curious what the path looks like for that customer.

That's a great question. We talk about this a lot. The big pivot point it covers swim and dresses. So they go to swim dresses. So if you look at our swim dresses, a lot of women pick up our swim dresses and they wear them as regular dresses. You know, that whole trend that's out there right now of, you know, beach to bar, you know, pool to dinner is really calling for having the ability to not have to go to your room and change. And I, you know, what we're seeing is is a real growth in that swim dress trend. And actually, swim dresses outperform regular dresses. Now, I don't want to do regular dresses as a service. They continue to be strong, and we've seen some really strong trends in there. But where the customer goes, where we're seeing a lot of action is on that swim dress. And it's so of a moment, and I think it's a franchise we can further build on going into particularly next year.

Fantastic. Thank you so much. Best of luck for summer. Thank you.

We'll take our next question from Eric Better of SCC Research. Your line is open.

Good morning. I want to talk a little bit about licensing here. You know, part of the kind of doing the apples to apples piece is that you licensing this year are somewhat of a replacement for categories you already have. Are we now entering the part where licensing where we're seeing incremental categories that will start to add to the total revenue because they're not really replacing something that's already out there? And I guess I'd love to get an update on how you are happy on how you feel about the footwear and the kids' licenses in terms of helping drive business both online and with your partners.

Hey, Eric, good to see you. Good to have you on. I'll start with just the strategy side of it. I'll let Andrew move to the feelings about the current categories. You are correct in that, as you noticed, that we added a few new licenses in our announcement today that were repeats from Q4 that we have signed. and those are white space, so those will be purely incremental and start to build the brand and get us to additional channels that we're very excited about. And as you'll realize that, you know, licensing just started in Q1 last year, so each quarter we'll be building the historical license that we signed. They'll continue to grow quarter to quarter. Andrew, you want to talk about footwear and... Yeah.

I mean, the other color in there, Eric, is the reach that we get by being in other channels. You know, being in the clubs and being in wholesale is absolutely huge for us. And I don't want to diminish the opportunity there of how far we can go. And I think the adjunct to that coming out of the conversation we just had about Europe is this opens us up globally as well to significant opportunity to push the brand into new markets. So on top of everything Bernie said, I just want to make sure that that's not getting lost in the midst of it. Specific to kids in shoes, Kids came out of the gate strong. We've been really happy with the transition we made. And, you know, kids was an emotional one for Land's End because it's always been in the kids' business. And, you know, inside a vertical retailer, that's something that almost every one of my employees wanted to hang on to. And, you know, I felt that we needed to concentrate on our best set because we're not a $10 billion company. Not yet. Give us a couple of years. Um, you know, so it was, who do you lead in and work with? And so we found the best, what we believe for the best partner out there. And they've done a great job. We see tremendous sales on our own website from kids. And it's not just. discounted sales, or it's not just add-on sales. It's customers coming and buying at or near full price, and they're specifically buying for kids. And what a great adjunct that is for our school uniform business, which we're seeing a lot of growth from as well, where we put the two side by side, and it's like you've got good symbiosis. I want to put a plug in for Backpack Day, which is coming up. That's going to be huge for us. And again, it's something we work with our partner on. And their ability to actually increase the penetration of Land's End kids out into the other channels and to a wider population, again, I just can't diminish that. That is extremely powerful for us. Shoes is going to be slower. You know, the newness works really well for us. I think we were slow because we tried to reinvent, sorry, we tried to go with what the original shoes were. I was going to say silhouettes, but that doesn't work for shoes. and we kept that. We've turned that on its head now. We've started to go to much more newness, and we've been more aggressive about that. And so we're seeing a lot. We're seeing that work a lot. And it works back to swim. So I'll pick up on Marnie's question, which is, again, we'll see her wear a slide. She's going to wear the whole uniform from the beach, the whole uniform from the pool to go to dinner. And I think that gives us a lot of hope. And we're seeing actually the club start to get interested in shoes now as well. And I like that because that puts us in front of hundreds of millions of people.

Yeah, we've been seeing that in the catalogs with the shoes becoming much more wider in terms of styles and trends here going forward. In terms of B2B, you have the Delta contract coming up. Could you remind us historically how these kind of contracts launch? If I remember correctly, there's a big bump initially, and then they have a nice flow afterwards. And what should we be thinking about In terms of back to school, I know that the competitor disappeared. When did you think that's going to be fully manifested, and we're going to see that in terms of the flow here this year also?

Yeah, Eric, as far as Delta goes, it isn't necessarily the beginning or end of a contract that there's large flows. It's when they decide to launch a new product line. Our current agreement with Delta you know does not have a near term uh new launch of product they're they're working on that themselves um so this will be just the normal run rate that we experienced with them uh historically okay in terms of back to school uniforms um you know We're excited about the volume that we added. Andrew noted in his comments that there's $13 million of new customer schools that we have added over the last six months as one of our competitors exited the industry. So Back to Schools tends to start in June for us. and then play out through September. So we're excited for the effects on Q2 of that new added business.

One of the things that we like about this year, and it's just worth noting because I know it's a lot of implications for all back-to-schools, is we're seeing back-to-school line up very closely with 2024's back-to-school. So it should be relatively calm is the way we're viewing it.

And last question. You mentioned in your release about SWIM. I agree that the product has materially improved. Do you believe that's just because of some ways and timing of the weather and some of the pieces? I know it's been colder year over year in certain areas. How should we be thinking about that? Thank you.

No, Eric, we improved it ourselves. I keep telling you this. It's just like we make great product, and it's connecting with the customer. So that continues to be big for us. No, I'm being slightly facetious. It definitely was a chilled start. It was cold and wet, and it was interesting that for the first month of the quarter, we were actually outselling Swim with outerwear. which has never happened to us before. So we saw that business pick up and get on this trend. I think we'll continue to see it get on this trend. And our view is that with the product that we've got and the reach that it's getting, that there is opportunity for us. But I do want to put in a plug for the Land's End teams who've really worked hard to put this collection together. I think it's a splendid collection.

Great. Good luck for the rest of the year. Thanks, Eric.

And we'll move next to Steve Silver of Argus Research. Your line is open.

Thanks, Operator, and thanks for taking my questions. My first question is really about the Outfitters business in general, particularly on the enterprise side. Just curious as to whether there's been any implied hesitancy across the pipeline for outfeeders given all the macroeconomic noise that we're dealing with every day. I'm just curious as to whether it's really business as usual in terms of enterprise prospects moving forward with these kind of discussions or if any companies that you're talking to are getting a little bit more in like a wait-and-see mode given everything that's going on in the macro environment.

The answer... A little surprisingly, no. So we went through the cycles with everyone else, yourself included, which was, oh, there's going to be a bump because everyone's going to pull forward to get ahead of tariffs. And then there's going to be a dip because everyone's got ahead of tariffs. And then there's going to be a slowdown. And we saw none of that. We saw very consistent business. And I think that's a testament to how our teams engage with the market. I think it's also a testament to strengthen the enterprise businesses out there that we're continuing to see that consistency from them. So right now, today, I feel pretty good about that business. And it's showing consistent strength that again, like you, I probably wasn't necessarily expecting was going to come through.

Great. And one more, if I may. You mentioned in your prepared remarks about increasing the customer file through SMS subscriptions and the like. I'm curious as to how that maybe compares just in context to previous campaigns where the customer file was expanded And just in terms of maybe how many of those new subscribers showed stickiness and not unsubscribing once they've taken advantage of the product that brought them into the system in the first place? Just trying to get some context in terms of the stickiness of some of these new customer ads.

Yeah, the number we called out is a great question, actually. The number we called out. I think you would key on in the script is that one to two X customer because that's exactly I think where you're going and that answers that question, you know, it's You can pay paid search the very short traditional method will get you that one times customer but where you really get them in is is making them a two times customer and we saw significant growth in that and I think that's a a testament to how we've chosen to market and the brand that we're choosing to market, which is we're not trying to sell so much on discounting. We're trying to stand behind the quality of our product, the fashion of our product, and the experience that you have coming to Land's End. We were really excited to see the one-times customer become a two-times customer at the rate they did and help build our LTV relative to the cost of acquisition. I think there's a sort of sub-part to this question which is worth covering, which is we're doing less paid search than we were, and we're doing more in channels where I think we can have a fuller expression of the brand. So, for example, in social, we do a lot on Insta now. It's not out of the question that we will ourselves be on TikTok. We are certainly on TikTok through our influencers. And I think it's about reaching customers more individually or through cohorts that they follow. I mean, I think the whole Park collab that we do and we continue to collab with Park has been really powerful for us in reaching a whole new customer. So... I hope that answers your question. I think the other thing I'd throw in there actually is we're starting to look more and more about using AI agents to market to customers. So we see a lot of search now, whether you're on Safari or whether you're in Google, you're getting an answer offered to you from an AI agent. So more of our marketing is starting to go against that. And while it's a very small base, it has tremendous growth associated with that, and we see that as the sky's the limit as we use and deploy more AI-based tools in the business. Great. I appreciate all the color.

Thanks, Steve.

See you.

And this does conclude our question and answer session, as well as the Land's End first quarter 2025 earnings call. You may now disconnect your lines, and everyone, have a great day.