US apparel retailer Lands' End Inc. returned to profitability in fiscal year 2024/25, thanks in no small part to a solid final quarter.

CEO Andrew McLean praised the company's "strong finish," noting that the past year had been characterised by "positive momentum" across all areas. Overall, the apparel provider met its own expectations with the results released on Thursday. However, revenue fell short of market expectations.

Lands' End annual revenue declines by roughly 7 percent

In the past fiscal year, which ended on January 31, Lands' End generated revenue of 1.36 billion dollars, a decline of 7.4 percent compared to the previous year. According to the company, the decline was attributed to factors including the transition of the children's wear and footwear categories to licensing models, as well as the fact that fiscal year 2023/24 included an additional sales week. Adjusted for these special factors, annual revenue increased by 2.6 percent.

However, due to a targeted reduction in markdowns, the gross margin increased from 42.5 to 47.9 percent, enabling the company to make clear progress in terms of earnings. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortisation) increased by 9.8 percent year-over-year to 92.6 million dollars.

Net income of just over six million dollars

The bottom line showed a net income of 6.2 million dollars, compared to a loss of 130.7 million dollars in the previous year. However, impairments totaling 106.7 million dollars had negatively impacted the prior year's results.

Adjusted for special items, net income in the most recent fiscal year amounted to 12.6 million dollars, while the adjusted net loss for 2023/24 was 4.8 million dollars.

Management currently reviewing "strategic options"

For the current fiscal year 2025/26, management anticipates further earnings improvements. Adjusted EBITDA is expected to increase to between 95.0 and 107.0 million dollars, and the target range for reported net income is between 8.0 and 20.0 million dollars. Furthermore, the company forecasts annual revenue between 1.33 and 1.45 billion dollars.

The future of Lands' End remains open. In early March, the Board of Directors announced that it was exploring "strategic alternatives" with the goal of increasing shareholder value, as the company and its growth potential are currently undervalued in the stock market. A sale of the company or a merger with a competitor are explicitly among the possible options.

This article was translated to English using an AI tool.