Lands' End, Inc.

Good afternoon, everyone. Welcome to today's Land's End second quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during our question and answer session. You may register to ask a question at any time by pressing star 1 on your telephone. Also, today's call is being recorded, and if you should need any operator assistance during the call today, please press star 0 at any time. Now, at this time, I'd like to turn things over to Mr. Tom Autos, Senior Director of Financial Planning and Analysis. Please go ahead, sir.

Good evening, and thank you for joining the Land's End Earnings Call for a discussion of our second quarter 2025 results, which we release this afternoon and can be found on our website, landsend.com. I'm Tom Alfos, Land's End Senior Director of Financial Planning and Analysis, and I'm pleased to join you today with Andrew McLean, 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 risks 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. 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 the call, we will be referring to non-GAAP measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of non-GAAP financial measures through 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 lanzen.com. With that, I'll turn the call over to Andrew.

Thanks, Tom. Good evening, and thank you for joining us. To begin today's call, I want to spend a moment talking about a key theme we've seen over the past several months, including over the course of the second quarter, and importantly, continuing into the third quarter. That theme is a noticeable increase in momentum across our business. Across our key product categories, channels, and engagement, we are seeing improvements that give us confidence that our strategy to serve our customers every journey is working. Our weather-proofed assortment that prioritizes newness and speed to market continues to resonate with customers, enables more high-quality sales, and deepens customer loyalty. Turning to the second quarter, we continue to reach new and existing customers across a broad base of channels as we have done in previous quarters. We're engaging with them where and when they want to shop and providing considered merchandise stories that resonate individually and create leverage as we reposition the brand via a sophisticated distributed commerce model. Our increasing shift towards an asset-light, low capital intensity model allows us to rapidly deploy new lists to optimize customer engagement. And with GMV holding steady year on year, we're beginning to see the benefits of that work. In the B2B channel, our team built on their successes by deepening relationships in the travel and banking sectors, extending a number of our long-term enterprise contracts. Critically, we continue to invest in our brand. Our deliberate strategy to weatherproof our assortment with solutions for life's every journey and deliver for our customers in any environment, while also enhancing speed across our supply chain, has enabled us to be nimble and react quickly, especially as we see buying patterns shifting to more wear and out items. In the second quarter, the B2C businesses were dominated by our licensing and third-party marketplaces, where we continued to see vastly expanded reach, resulting in a more balanced model that, importantly, delivered over half of our new customer growth on virtually no capital investment. With regard to sourcing, as you've heard us talk about over the past several quarters, we have been intentionally repositioning our sourcing network to better serve the business we are building, leading to a more balanced supply chain that enables us to bring new solutions to customers with more speed and frequency throughout the year. For example, our license partners are becoming part of our sourcing network, allowing us low lift access to their vendor networks, while also providing those same partners with leverage from the land and sourcing footprint. Another consequential outcome of our updated sourcing strategy has been the ability to navigate tariffs. By tapping into the full breadth of our sourcing matrix, we're able to swiftly and strategically reposition fabric and manufacturing as tariff conditions evolve. The resilience is there to see as we continue to deliver gross margin rates above last year in the quarter, even as we felt initial tariff headwinds. We feel confident that we have mitigated the near-term impact of tariffs for the remainder of fiscal 2025. especially with the majority of our fall holiday items already shipped. As Bernie will detail, this is reflected in our guidance. Turning to product, we had notable wins. We launched a focused Land's End Essentials line on Amazon consisting of approximately 40 styles, providing access points to new and existing customers. The product, key item basics across women's, men's, and swim, is priced at the good end of our merchandising pyramid, gives a taste of the solutions Land's End is famous for, and invites the customer to find the better, best assortment on our brand site. This Essentials product line is a perfect segue from our licensing product to our brand and is attracting new customers. In the brand channels, credit to the tote bag, where our ongoing efforts to collaborate and innovate, ranging in size from A to Maxi and in construction from canvas to straw, have allowed us to expand the assortment. We also added a customization package that is unique in the industry. As seasonal buying habits are changing, we are benefiting from the work we've done to weatherproof our assortment, allowing us to deliver customers what they want, when they want it, be it swim for summer recreation or outerwear to battle the elements. Following a colder spring and slower start for swim, we saw momentum build throughout the summer as weather improved and experienced a strong August. Both swim and outerwear were top five items over Labor Day weekend, reflecting changing consumer tastes around weatherproofing. As a nod to Q3, our customers are responding positively to our on-trend assortments, Embroidered jeans are our best seller without the need to discount, and we have expanded our popular barrel leg fit. We're pleased to report that these trends with our Wear Now Fall product are resonating strongly with customers, laying the foundation for a strong third quarter in these important franchise categories. Turning to the performance of our various businesses, beginning with our B2B business. Our B2B business continues to set us apart from competitors and had a terrific quarter, with growth in both top and bottom line performance. On the commercial uniforms side, our focus on building scale and contract duration with our enterprise customers yielded significant results. This year, we have won and are extending contracts with several large clients. marking our highest growth in contract duration that we have recorded during the second quarter, this side of the company's spin in 2014. As we dial up this strategy, we expect to add other household names in our key industry sectors over the coming year. Our school uniform business had another strong quarter, with revenue up high single digits, fueled by new customer wins. We're 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. Turning to our B2C business, our asset licensing business remains a significant growth vehicle for the Land's End brand. We saw particularly strong performance in the club stores with continued wins across men's, women's, and kids' categories, and the expected introduction of footwear in that channel later in the year. Land's End remains a highly desirable brand, with licensed partners reporting new interest from a number of distributors in both the department store and club channels. Our third-party marketplace business delivered strong top-line results, driven by performance in Macy's and a record-setting prime week on Amazon, where we launched the Land's End Essential line I mentioned earlier. This targeted approach continues to enhance discoverability, conversion, and drive brand equity across platforms. Marketplaces are relatively low-lift, capital light, and fit neatly into our distributed commerce go-to-market model. Along with licensing, we see marketplaces as a compelling driver of continued growth in the reach and brand value of Land's End. And importantly, it's where our consumer is shopping and where we are meeting those new to our iconic brand. Our U.S. e-commerce business continues its evolutionary journey as the central hub of our commerce strategy, representing the most fashion-forward, collection-oriented manifestation of the brand. we continue to elevate the site, creating a more immersive and experiential look and feel that best presents our collection to customers, existing and new. Our recent momentum, with a strong start to the third quarter, is positioning Land's End as a trusted, high-quality brand with broad consumer appeal, especially among the all-important 35- to 50-year-old demographic. The website in both mobile and desktop showcases ever greater levels of personalization. Our deployment of our new AI-driven recommendation and outfitting engine makes it easier for customers to mix and match products. Additionally, we're driving more segmented and personalized campaigns, leveraging our SMS and email platforms while expanding communications with AI agents, a rapidly evolving search sector. Social commerce. is the final part of our distributed commerce platform. While we don't break out this segment and include it within our U.S. e-commerce results, it had a wonderful quarter with our Instagram followers growing by over 100% since last year. Our total social traffic increased nearly 19% versus last year and nearly 60% in June and July versus last year. Reaching a new and younger customer, we created bespoke campaigns. For example, our Tote Girl summer campaign. Offering our iconic pocket tote with personalization options at a series of pop-up shops and popular summer destinations. We continue to attract new customers at a rapid clip, and the tote remains our number one new-to-brand acquisition product. Europe showed improvement during the second quarter, with revenue declines beginning to moderate as we became more effective sellers and positioned the brand to build on the distributed commerce success that we are seeing in the U.S. Specifically, we launched a French-language website with limited discounting and a more evolved look and feel. In addition, we began to elevate the look and feel of the German and UK sites, collaborating with more premium partners like Sheer Lux and Secret Escapes. For fall holiday, we plan to launch several designer collaborations as part of that reposition. As with the U.S., We look to asset-like low-lift launches to broaden our reach, including opening on Amazon, Debenhams, and Next, with results significantly ahead of expectations. Europe will continue to be a testbed for us, and while each market has its own dynamics, we're committed to building a global brand and view the halo that these markets can provide Land's End as invaluable. I'll now turn it over to Bernie to discuss our second quarter performance in more detail. Thank you, Andrew.