10-Q
Q30000799288false--02-020.500.500000799288le:BusinessOutfittersRevenueMember2022-01-292022-10-280000799288le:TermLoanFacilityMemberus-gaap:SecuredDebtMemberle:OneMonthLondonInterbankOfferedRateLIBORMember2023-05-112023-05-110000799288us-gaap:CommonStockMember2023-04-292023-07-280000799288le:TermLoanFacilityMemberle:AlternateBaseRateMemberus-gaap:SecuredDebtMember2023-06-212023-06-2100007992882022-04-290000799288le:ABLFacilityMember2023-10-270000799288country:US2023-01-282023-10-270000799288us-gaap:PerformanceSharesMember2022-01-292022-10-280000799288us-gaap:SecuredDebtMemberle:AdjustedSecuredOvernightFinancingRateSofrOvernightIndexSwapRateMemberle:ABLFacilityMember2023-05-122023-05-120000799288le:TwoThousandTwentyTwoShareRepurchaseProgramMember2022-06-280000799288us-gaap:AdditionalPaidInCapitalMember2022-01-280000799288us-gaap:RetainedEarningsMember2023-01-270000799288country:US2022-07-302022-10-280000799288us-gaap:RetainedEarningsMember2022-01-292022-04-290000799288us-gaap:CommonStockMember2022-04-290000799288us-gaap:RetailMember2023-07-292023-10-270000799288le:InternationalMember2022-07-302022-10-280000799288us-gaap:PerformanceSharesMember2023-07-292023-10-270000799288le:TwoThousandTwentyTwoShareRepurchaseProgramMember2022-06-282022-06-280000799288le:ABLFacilityMember2022-10-280000799288us-gaap:CommonStockMember2023-07-280000799288le:FortressCreditCorpMemberle:TermLoanFacilityMember2020-09-090000799288us-gaap:SecuredDebtMemberle:ABLFacilityMemberle:OneMonthAdjustedSecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2023-05-122023-05-120000799288srt:MaximumMember2023-01-282023-10-270000799288le:FortressCreditCorpMemberle:TermLoanFacilityMembersrt:MinimumMemberus-gaap:SecuredDebtMember2020-09-092020-09-090000799288le:FortressCreditCorpMemberle:TermLoanFacilityMembersrt:MaximumMemberus-gaap:SecuredDebtMember2020-09-092020-09-090000799288le:OtherGeographicalLocationMember2023-07-292023-10-270000799288srt:EuropeMember2022-07-302022-10-280000799288le:ThirdPartyMember2023-01-282023-10-2700007992882022-10-280000799288le:TermLoanFacilityMember2020-09-092020-09-090000799288us-gaap:RetainedEarningsMember2023-10-270000799288le:OtherGeographicalLocationMember2023-01-282023-10-270000799288us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-302022-07-290000799288us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-01-2700007992882022-01-292022-04-290000799288us-gaap:CommonStockMember2023-07-292023-10-270000799288le:ShareRepurchaseProgramMember2022-01-292022-10-280000799288us-gaap:AdditionalPaidInCapitalMember2023-10-270000799288us-gaap:RetainedEarningsMember2022-01-280000799288us-gaap:RetainedEarningsMember2022-10-280000799288le:ABLFacilityMember2022-01-292023-01-270000799288le:TimeVestingStockAwardsMember2022-07-302022-10-2800007992882022-01-280000799288us-gaap:AdditionalPaidInCapitalMember2022-01-292022-04-290000799288srt:EuropeMember2022-01-292022-10-280000799288country:US2023-07-292023-10-2700007992882022-01-292022-10-280000799288us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-290000799288us-gaap:LetterOfCreditMemberle:ABLFacilityMember2023-10-270000799288le:TermLoanFacilityMemberle:FederalFundsRateMemberus-gaap:SecuredDebtMember2023-06-222023-06-220000799288le:TermLoanFacilityMemberle:FederalFundsRateMemberus-gaap:SecuredDebtMember2023-06-212023-06-210000799288us-gaap:PerformanceSharesMember2022-07-302022-10-280000799288us-gaap:OtherOperatingIncomeExpenseMember2022-01-292022-10-2800007992882023-11-300000799288le:AccruedExpensesAndOtherCurrentLiabilitiesMember2022-10-280000799288le:TermLoanFacilityMemberus-gaap:SecuredDebtMemberle:ThreeMonthAdjustedSecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2023-06-222023-06-220000799288srt:MaximumMemberle:ABLFacilityMember2023-01-282023-10-270000799288us-gaap:CommonStockMember2022-07-302022-10-280000799288us-gaap:AdditionalPaidInCapitalMember2023-04-280000799288us-gaap:RetainedEarningsMember2023-04-280000799288le:TermLoanFacilityMemberle:AlternateBaseRateMemberus-gaap:SecuredDebtMember2023-06-222023-06-2200007992882022-07-302022-10-280000799288le:ShareRepurchaseProgramMember2023-01-282023-10-270000799288le:TermLoanFacilityMemberus-gaap:SecuredDebtMemberle:OneMonthSecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2023-06-222023-06-2200007992882023-04-292023-07-280000799288srt:AsiaMember2023-01-282023-10-270000799288le:TermLoanFacilityMemberle:FederalFundsRateMemberus-gaap:SecuredDebtMember2023-05-122023-05-120000799288le:TermLoanFacilityMembersrt:MinimumMemberus-gaap:SecuredDebtMember2023-06-222023-06-220000799288us-gaap:RetainedEarningsMember2023-01-282023-04-280000799288us-gaap:RetainedEarningsMember2023-07-280000799288srt:AsiaMember2022-07-302022-10-280000799288le:USeCommerceMember2022-07-302022-10-280000799288le:BusinessOutfittersRevenueMember2023-01-282023-10-270000799288le:OtherGeographicalLocationMember2022-01-292022-10-280000799288le:ThirdPartyMember2022-07-302022-10-280000799288us-gaap:CommonStockMember2022-04-302022-07-290000799288le:BusinessOutfittersRevenueMember2023-07-292023-10-270000799288us-gaap:RetainedEarningsMember2022-07-302022-10-280000799288le:ShareRepurchaseProgramMember2022-07-302022-10-280000799288le:TermLoanFacilityMemberus-gaap:SecuredDebtMemberle:OneMonthLondonInterbankOfferedRateLIBORMember2023-06-212023-06-210000799288us-gaap:CommonStockMember2022-01-280000799288le:TermLoanFacilityMembersrt:MinimumMemberus-gaap:SecuredDebtMember2023-06-212023-06-210000799288le:OtherGeographicalLocationMember2022-07-302022-10-280000799288us-gaap:RetainedEarningsMemberle:TwoThousandTwentyTwoShareRepurchaseProgramMember2023-01-282023-10-2700007992882023-07-280000799288us-gaap:RetainedEarningsMember2022-04-302022-07-290000799288us-gaap:RetailMember2022-07-302022-10-2800007992882023-04-280000799288us-gaap:OtherOperatingIncomeExpenseMember2022-07-302022-10-280000799288us-gaap:SecuredDebtMemberle:ABLFacilityMember2023-10-270000799288us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-01-270000799288le:LondonInterbankOfferedRateLibor1Memberle:TermLoanFacilityMemberus-gaap:SecuredDebtMember2023-06-222023-06-220000799288le:ThirdPartyMember2022-01-292022-10-280000799288us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-292022-04-290000799288us-gaap:EmployeeStockOptionMember2023-07-292023-10-270000799288le:TermLoanFacilityMember2023-01-270000799288le:ShareRepurchaseProgramMember2023-07-292023-10-270000799288us-gaap:AdditionalPaidInCapitalMember2023-07-280000799288le:ABLFacilityMember2023-01-282023-10-270000799288le:TermLoanFacilityMemberus-gaap:SecuredDebtMemberle:OneMonthAdjustedSecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2023-06-222023-06-220000799288us-gaap:PerformanceSharesMember2023-10-270000799288us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-270000799288le:BusinessOutfittersRevenueMember2022-07-302022-10-280000799288us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-10-280000799288le:TermLoanFacilityMember2020-09-090000799288srt:AsiaMember2023-07-292023-10-270000799288le:InternationalMember2023-01-282023-10-270000799288us-gaap:AdditionalPaidInCapitalMember2022-04-302022-07-290000799288le:TermLoanFacilityMemberle:FederalFundsRateMemberus-gaap:SecuredDebtMember2023-05-112023-05-110000799288us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-10-270000799288us-gaap:RetainedEarningsMember2023-07-292023-10-270000799288us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-282023-04-280000799288le:LondonInterbankOfferedRateLibor1Memberle:TermLoanFacilityMemberus-gaap:SecuredDebtMember2023-06-212023-06-210000799288us-gaap:AdditionalPaidInCapitalMember2022-07-302022-10-280000799288le:TimeVestingStockAwardsMember2023-07-292023-10-270000799288us-gaap:EmployeeStockOptionMember2023-01-282023-10-270000799288us-gaap:RetailMember2023-01-282023-10-2700007992882023-01-282023-04-280000799288le:TimeVestingStockAwardsMember2023-01-270000799288us-gaap:CommonStockMember2023-10-270000799288us-gaap:FairValueMeasurementsNonrecurringMember2023-10-2700007992882023-01-270000799288le:USeCommerceMember2023-07-292023-10-270000799288srt:EuropeMember2023-07-292023-10-270000799288us-gaap:PerformanceSharesMember2023-01-282023-10-270000799288us-gaap:AdditionalPaidInCapitalMember2023-01-282023-04-280000799288le:TermLoanFacilityMemberus-gaap:SecuredDebtMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2023-06-222023-06-2200007992882022-04-302022-07-290000799288us-gaap:OtherOperatingIncomeExpenseMember2023-01-282023-10-270000799288le:InternationalMember2023-07-292023-10-270000799288us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-10-280000799288us-gaap:RetainedEarningsMember2023-04-292023-07-280000799288us-gaap:RetainedEarningsMember2022-04-290000799288us-gaap:CarryingReportedAmountFairValueDisclosureMember2023-10-270000799288us-gaap:RetainedEarningsMemberle:TwoThousandTwentyTwoShareRepurchaseProgramMember2023-07-292023-10-270000799288country:US2022-01-292022-10-280000799288le:ABLFacilityMember2022-01-292022-10-280000799288us-gaap:CommonStockMember2023-01-282023-04-2800007992882023-10-270000799288le:InternationalMember2022-01-292022-10-280000799288us-gaap:SecuredDebtMemberle:ABLFacilityMember2023-01-282023-10-270000799288us-gaap:AdditionalPaidInCapitalMember2023-04-292023-07-280000799288us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-292023-10-270000799288us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-302022-10-280000799288us-gaap:CommonStockMember2023-04-280000799288le:TimeVestingStockAwardsMember2022-01-292022-10-280000799288srt:MinimumMemberle:ABLFacilityMember2023-01-282023-10-270000799288us-gaap:TradeNamesMember2023-07-292023-10-270000799288us-gaap:RetailMember2022-01-292022-10-280000799288le:USeCommerceMember2022-01-292022-10-280000799288us-gaap:TradeNamesMember2023-10-270000799288le:TermLoanFacilityMember2022-10-280000799288us-gaap:CarryingReportedAmountFairValueDisclosureMember2022-10-280000799288us-gaap:AdditionalPaidInCapitalMember2022-07-290000799288us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-10-270000799288us-gaap:RetainedEarningsMember2022-07-290000799288us-gaap:AdditionalPaidInCapitalMember2023-01-270000799288us-gaap:CommonStockMember2023-01-270000799288us-gaap:SecuredDebtMemberle:ABLFacilityMemberus-gaap:BaseRateMember2023-05-122023-05-120000799288le:AccruedExpensesAndOtherCurrentLiabilitiesMember2023-10-270000799288le:TermLoanFacilityMemberle:SixMonthAdjustedSecuredOvernightFinancingRateSofrOvernightIndexSwapRateMemberus-gaap:SecuredDebtMember2023-06-222023-06-220000799288le:ABLFacilityMember2023-01-270000799288le:ThirdPartyMember2023-07-292023-10-270000799288us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-280000799288us-gaap:CarryingReportedAmountFairValueDisclosureMember2023-01-270000799288le:AccruedExpensesAndOtherCurrentLiabilitiesMember2023-01-270000799288us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-10-280000799288us-gaap:EmployeeStockOptionMember2023-10-270000799288us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-292023-07-280000799288us-gaap:FairValueMeasurementsNonrecurringMember2023-01-270000799288us-gaap:OtherOperatingIncomeExpenseMember2023-07-292023-10-270000799288us-gaap:CommonStockMember2022-07-290000799288srt:AsiaMember2022-01-292022-10-280000799288us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-280000799288le:TwoThousandTwentyTwoShareRepurchaseProgramMember2023-10-270000799288le:TermLoanFacilityMember2023-10-270000799288le:USeCommerceMember2023-01-282023-10-270000799288le:JapanECommerceMember2022-01-292022-10-280000799288us-gaap:FairValueMeasurementsNonrecurringMember2022-10-280000799288le:TimeVestingStockAwardsMember2023-01-282023-10-2700007992882022-07-290000799288us-gaap:PerformanceSharesMember2023-01-270000799288us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-290000799288srt:EuropeMember2023-01-282023-10-270000799288srt:MinimumMember2023-01-282023-10-270000799288le:JapanECommerceMember2022-07-302022-10-280000799288us-gaap:CommonStockMember2022-01-292022-04-290000799288le:TimeVestingStockAwardsMember2023-10-2700007992882023-07-292023-10-2700007992882023-01-282023-10-270000799288us-gaap:AdditionalPaidInCapitalMember2023-07-292023-10-270000799288us-gaap:AdditionalPaidInCapitalMember2022-04-290000799288us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-280000799288us-gaap:AdditionalPaidInCapitalMember2022-10-280000799288us-gaap:CommonStockMember2022-10-28xbrli:pureiso4217:USDxbrli:sharesxbrli:sharesle:Channelle:Segmentiso4217:USD
Table of Contents

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended October 27, 2023

-OR-

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to .

Commission File Number: 001-09769

 

Lands’ End, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

 

 

Delaware

36-2512786

 

 

 

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

 

1 Lands’ End Lane

Dodgeville, Wisconsin

53595

 

 

 

(Address of principal executive offices)

(Zip Code)

 

(608) 935-9341

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, par value $0.01 per share

 

LE

 

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

 

 

 

 

Large accelerated filer

 

Accelerated filer

 

 

 

Non-accelerated filer

 

Smaller reporting company

 

 

 

 

 

 

 Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

As of November 30, 2023, the registrant had 31,445,713 shares of common stock, $0.01 par value, outstanding.


Table of Contents

 

LANDS’ END, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE PERIOD ENDED OCTOBER 27, 2023

 

TABLE OF CONTENTS

 

 

 

 

Page

 

 

 

 

 

PART I. FINANCIAL INFORMATION

 

 

 

 

 

 

Item 1.

Financial Statements (Unaudited)

 

1

 

 

 

 

 

Condensed Consolidated Statements of Operations

 

1

 

 

 

 

 

Condensed Consolidated Statements of Comprehensive Operations

 

2

 

 

 

 

 

Condensed Consolidated Balance Sheets

 

3

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows

 

4

 

 

 

 

 

Condensed Consolidated Statements of Changes in Stockholders' Equity

 

5

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

6

 

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

20

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

 

35

 

 

 

 

Item 4.

Controls and Procedures

 

36

 

 

 

 

 

PART II. OTHER INFORMATION

 

37

 

 

 

 

Item 1.

Legal Proceedings

 

37

 

 

 

 

Item 1A.

Risk Factors

 

37

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

 

38

 

 

 

 

Item 5.

Other Information

 

38

 

 

 

 

Item 6.

Exhibits

 

39

 

 

 

 

 

 

Signatures

 

40

 

 


Table of Contents

 

 

PART I. FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

LANDS’ END, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

 

 

 

13 Weeks Ended

 

 

39 Weeks Ended

 

(in thousands, except per share data)

 

October 27,
2023

 

 

October 28,
2022

 

 

October 27,
2023

 

 

October 28, 2022

 

Net revenue

 

$

324,735

 

 

$

370,983

 

 

$

957,656

 

 

$

1,025,826

 

Cost of sales (excluding depreciation and amortization)

 

 

172,142

 

 

 

222,573

 

 

 

527,529

 

 

 

604,204

 

Gross profit

 

 

152,593

 

 

 

148,410

 

 

 

430,127

 

 

 

421,622

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling and administrative

 

 

135,282

 

 

 

132,807

 

 

 

377,662

 

 

 

377,074

 

Depreciation and amortization

 

 

9,595

 

 

 

9,761

 

 

 

28,439

 

 

 

29,228

 

Goodwill impairment

 

 

106,700

 

 

 

 

 

 

106,700

 

 

 

 

Other operating expense, net

 

 

2,324

 

 

 

3,096

 

 

 

2,916

 

 

 

3,135

 

Operating (loss) income

 

 

(101,308

)

 

 

2,746

 

 

 

(85,590

)

 

 

12,185

 

Interest expense

 

 

11,677

 

 

 

10,825

 

 

 

35,984

 

 

 

27,807

 

Other (income) expense, net

 

 

(132

)

 

 

230

 

 

 

(488

)

 

 

(97

)

Loss before income taxes

 

 

(112,853

)

 

 

(8,309

)

 

 

(121,086

)

 

 

(15,525

)

Income tax (benefit) expense

 

 

(459

)

 

 

(3,627

)

 

 

978

 

 

 

(6,293

)

NET LOSS

 

$

(112,394

)

 

$

(4,682

)

 

$

(122,064

)

 

$

(9,232

)

NET LOSS PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

$

(3.52

)

 

$

(0.14

)

 

$

(3.80

)

 

$

(0.28

)

Diluted:

 

$

(3.52

)

 

$

(0.14

)

 

$

(3.80

)

 

$

(0.28

)

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average common shares outstanding

 

 

31,887

 

 

 

33,064

 

 

 

32,140

 

 

 

33,196

 

Diluted weighted average common shares outstanding

 

 

31,887

 

 

 

33,064

 

 

 

32,140

 

 

 

33,196

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

1


Table of Contents

 

 

LANDS’ END, INC.

Condensed Consolidated Statements of Comprehensive Operations

(Unaudited)

 

 

 

13 Weeks Ended

 

 

39 Weeks Ended

 

(in thousands)

 

October 27, 2023

 

 

October 28, 2022

 

 

October 27, 2023

 

 

October 28, 2022

 

NET LOSS

 

$

(112,394

)

 

$

(4,682

)

 

$

(122,064

)

 

$

(9,232

)

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(1,185

)

 

 

(1,947

)

 

 

(404

)

 

 

(5,884

)

COMPREHENSIVE LOSS

 

$

(113,579

)

 

$

(6,629

)

 

$

(122,468

)

 

$

(15,116

)

 

See accompanying Notes to Condensed Consolidated Financial Statements.

2


Table of Contents

 

 

LANDS’ END, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

 

 

(in thousands, except per share data)

 

October 27, 2023

 

 

October 28, 2022

 

 

January 27,
2023

 

ASSETS

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

36,821

 

 

$

28,829

 

 

$

39,557

 

Restricted cash

 

 

1,833

 

 

 

1,833

 

 

 

1,834

 

Accounts receivable, net

 

 

31,422

 

 

 

49,409

 

 

 

44,928

 

Inventories, net

 

 

422,160

 

 

 

564,856

 

 

 

425,513

 

Prepaid expenses and other current assets

 

 

47,952

 

 

 

47,205

 

 

 

44,894

 

Total current assets

 

 

540,188

 

 

 

692,132

 

 

 

556,726

 

Property and equipment, net

 

 

121,400

 

 

 

121,907

 

 

 

127,638

 

Operating lease right-of-use asset

 

 

26,216

 

 

 

31,441

 

 

 

30,325

 

Goodwill

 

 

 

 

 

106,700

 

 

 

106,700

 

Intangible asset

 

 

257,000

 

 

 

257,000

 

 

 

257,000

 

Other assets

 

 

2,758

 

 

 

3,786

 

 

 

3,759

 

TOTAL ASSETS

 

$

947,562

 

 

$

1,212,966

 

 

$

1,082,148

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

Current portion of long-term debt

 

$

13,750

 

 

$

13,750

 

 

$

13,750

 

Accounts payable

 

 

161,426

 

 

 

228,863

 

 

 

171,557

 

Lease liability – current

 

 

5,754

 

 

 

5,808

 

 

 

5,414

 

Accrued expenses and other current liabilities

 

 

109,927

 

 

 

111,872

 

 

 

106,756

 

Total current liabilities

 

 

290,857

 

 

 

360,293

 

 

 

297,477

 

Long-term borrowings under ABL Facility

 

 

110,000

 

 

 

160,000

 

 

 

100,000

 

Long-term debt, net

 

 

215,306

 

 

 

226,227

 

 

 

223,506

 

Lease liability – long-term

 

 

26,065

 

 

 

32,033

 

 

 

31,095

 

Deferred tax liabilities

 

 

51,176

 

 

 

45,087

 

 

 

45,953

 

Other liabilities

 

 

3,253

 

 

 

3,758

 

 

 

3,365

 

TOTAL LIABILITIES

 

 

696,657

 

 

 

827,398

 

 

 

701,396

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Common stock, par value $0.01 authorized: 480,000 shares;
   issued and outstanding:
31,719, 33,001 and 32,626, respectively

 

 

317

 

 

 

330

 

 

 

326

 

Additional paid-in capital

 

 

358,811

 

 

 

369,198

 

 

 

366,181

 

(Accumulated deficit) Retained earnings

 

 

(90,797

)

 

 

34,566

 

 

 

31,267

 

Accumulated other comprehensive loss

 

 

(17,426

)

 

 

(18,526

)

 

 

(17,022

)

TOTAL STOCKHOLDERS’ EQUITY

 

 

250,905

 

 

 

385,568

 

 

 

380,752

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

947,562

 

 

$

1,212,966

 

 

$

1,082,148

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

3


Table of Contents

 

 

LANDS’ END, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

 

 

39 Weeks Ended

 

(in thousands)

 

October 27, 2023

 

 

October 28, 2022

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net loss

 

$

(122,064

)

 

$

(9,232

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

28,439

 

 

 

29,228

 

Amortization of debt issuance costs

 

 

2,456

 

 

 

2,361

 

Loss on disposal of property and equipment

 

 

100

 

 

 

39

 

Stock-based compensation

 

 

3,619

 

 

 

3,537

 

Deferred income taxes

 

 

5,330

 

 

 

460

 

Goodwill and long-lived asset impairment

 

 

106,700

 

 

 

120

 

Other

 

 

(583

)

 

 

(744

)

Change in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

 

13,258

 

 

 

(1,246

)

Inventories, net

 

 

2,796

 

 

 

(188,899

)

Accounts payable

 

 

(4,334

)

 

 

82,057

 

Other operating assets

 

 

(2,504

)

 

 

(10,604

)

Other operating liabilities

 

 

3,454

 

 

 

(33,072

)

Net cash provided by (used in) operating activities

 

 

36,667

 

 

 

(125,995

)

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

Sales of property and equipment

 

 

 

 

 

88

 

Purchases of property and equipment

 

 

(28,535

)

 

 

(20,544

)

Net cash used in investing activities

 

 

(28,535

)

 

 

(20,456

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

Proceeds from borrowings under ABL Facility

 

 

169,000

 

 

 

222,000

 

Payments of borrowings under ABL Facility

 

 

(159,000

)

 

 

(62,000

)

Payments on term loan

 

 

(10,313

)

 

 

(10,313

)

Payments of debt issuance costs

 

 

(67

)

 

 

 

Payments for taxes related to net share settlement of equity awards

 

 

(1,210

)

 

 

(4,315

)

Purchases and retirement of common stock

 

 

(9,788

)

 

 

(5,234

)

Net cash (used in) provided by financing activities

 

 

(11,378

)

 

 

140,138

 

Effects of exchange rate changes on cash, cash equivalents and restricted cash

 

 

509

 

 

 

840

 

NET DECREASE IN CASH, CASH EQUIVALENTS AND
      RESTRICTED CASH

 

 

(2,737

)

 

 

(5,473

)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH,
      BEGINNING OF PERIOD

 

 

41,391

 

 

 

36,135

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD

 

$

38,654

 

 

$

30,662

 

SUPPLEMENTAL CASH FLOW DATA

 

 

 

 

 

 

Unpaid liability to acquire property and equipment

 

$

3,893

 

 

$

4,922

 

Income taxes paid (refunded)

 

$

(200

)

 

$

4,146

 

Interest paid

 

$

33,171

 

 

$

26,170

 

Operating lease right-of-use-assets (reversal) obtained in exchange for lease liabilities

 

$

(755

)

 

$

4,223

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

4


Table of Contents

 

 

LANDS’ END, INC.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

 

 

Common Stock Issued

 

 

Additional
Paid-in

 

 

(Accumulated Deficit) Retained

 

 

Accumulated
Other
Comprehensive

 

 

Total
Stockholders’

 

(in thousands)

 

Shares

 

 

Amount

 

 

Capital

 

 

Earnings

 

 

(Loss)

 

 

Equity

 

Balance at January 27, 2023

 

 

32,626

 

 

$

326

 

 

$

366,181

 

 

$

31,267

 

 

$

(17,022

)

 

$

380,752

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(1,652

)

 

 

 

 

 

(1,652

)

Cumulative translation adjustment, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

81

 

 

 

81

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

1,083

 

 

 

 

 

 

 

 

 

1,083

 

Vesting of restricted shares

 

 

408

 

 

 

3

 

 

 

(3

)

 

 

 

 

 

 

 

 

 

Common stock withheld related to net share
      settlement of equity awards

 

 

(144

)

 

 

 

 

 

(1,199

)

 

 

 

 

 

 

 

 

(1,199

)

Purchases and retirement of common stock

 

 

(430

)

 

 

(4

)

 

 

(3,777

)

 

 

 

 

 

 

 

 

(3,781

)

Balance at April 28, 2023

 

 

32,460

 

 

$

325

 

 

$

362,285

 

 

$

29,615

 

 

$

(16,941

)

 

$

375,284

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(8,018

)

 

 

 

 

 

(8,018

)

Cumulative translation adjustment, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

700

 

 

 

700

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

810

 

 

 

 

 

 

 

 

 

810

 

Vesting of restricted shares

 

 

2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases and retirement of common stock

 

 

(375

)

 

 

(4

)

 

 

(3,004

)

 

 

 

 

 

 

 

 

(3,008

)

Balance at July 28, 2023

 

 

32,087

 

 

$

321

 

 

$

360,091

 

 

$

21,597

 

 

$

(16,241

)

 

$

365,768

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(112,394

)

 

 

 

 

 

(112,394

)

Cumulative translation adjustment, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,185

)

 

 

(1,185

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

1,726

 

 

 

 

 

 

 

 

 

1,726

 

Vesting of restricted shares

 

 

7

 

 

 

 

 

 

(11

)

 

 

 

 

 

 

 

 

(11

)

Common stock withheld related to net share
      settlement of equity awards

 

 

(2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases and retirement of common stock

 

 

(373

)

 

 

(4

)

 

 

(2,995

)

 

 

 

 

 

 

 

 

(2,999

)

Balance at October 27, 2023

 

 

31,719

 

 

$

317

 

 

$

358,811

 

 

$

(90,797

)

 

$

(17,426

)

 

$

250,905

 

 

 

 

Common Stock Issued

 

 

Additional
Paid-in

 

 

Retained

 

 

Accumulated
Other
Comprehensive

 

 

Total
Stockholders’

 

(in thousands)

 

Shares

 

 

Amount

 

 

Capital

 

 

Earnings

 

 

(Loss)

 

 

Equity

 

Balance at January 28, 2022

 

 

32,985

 

 

$

330

 

 

$

374,413

 

 

$

44,595

 

 

$

(12,642

)

 

$

406,696

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(2,371

)

 

 

 

 

 

(2,371

)

Cumulative translation adjustment, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,094

)

 

 

(3,094

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

1,484

 

 

 

 

 

 

 

 

 

1,484

 

Vesting of restricted shares

 

 

660

 

 

 

4

 

 

 

(4

)

 

 

 

 

 

 

 

 

 

Common stock withheld related to net share
      settlement of equity awards

 

 

(232

)

 

 

 

 

 

(4,310

)

 

 

 

 

 

 

 

 

(4,310

)

Balance at April 29, 2022

 

 

33,413

 

 

$

334

 

 

$

371,583

 

 

$

42,224

 

 

$

(15,736

)

 

$

398,405

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(2,179

)

 

 

 

 

 

(2,179

)

Cumulative translation adjustment, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(843

)

 

 

(843

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

1,919

 

 

 

 

 

 

 

 

 

1,919

 

Vesting of restricted shares

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases and retirement of common stock

 

 

(212

)

 

 

(2

)

 

 

(2,257

)

 

 

(98

)

 

 

 

 

 

(2,357

)

Balance at July 29, 2022

 

 

33,202

 

 

$

332

 

 

$

371,245

 

 

$

39,947

 

 

$

(16,579

)

 

$

394,945

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(4,682

)

 

 

 

 

 

(4,682

)

Cumulative translation adjustment, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,947

)

 

 

(1,947

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

134

 

 

 

 

 

 

 

 

 

134

 

Vesting of restricted shares

 

 

4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock withheld related to net share
      settlement of equity awards

 

 

(1

)

 

 

 

 

 

(5

)

 

 

 

 

 

 

 

 

(5

)

Purchases and retirement of common stock

 

 

(204

)

 

 

(2

)

 

 

(2,176

)

 

 

(699

)

 

 

 

 

 

(2,877

)

Balance at October 28, 2022

 

 

33,001

 

 

$

330

 

 

$

369,198

 

 

$

34,566

 

 

$

(18,526

)

 

$

385,568

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

5


Table of Contents

 

 

LANDS’ END, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1. BACKGROUND AND BASIS OF PRESENTATION

 

Description of Business

 

Lands’ End, Inc. (“Lands’ End” or the “Company”) is a leading digital retailer of casual clothing, swimwear, outerwear, accessories, footwear, home products and uniform solutions. Lands’ End offers products online at www.landsend.com, through Company Operated stores and through third-party distribution channels. Lands’ End is a classic American lifestyle brand with a passion for quality, legendary service and real value and seeks to deliver timeless style for women, men, kids and the home. Lands’ End also offers products to businesses and schools, for their employees and students, through the Outfitters distribution channel. References to www.landsend.com do not constitute incorporation by reference of the information at www.landsend.com, and such information is not part of this Quarterly Report on Form 10-Q or any other filings with the SEC, unless otherwise explicitly stated.

 

Terms that are commonly used in the Company’s Notes to Condensed Consolidated Financial Statements are defined as follows:

 

ABL Facility – Asset-based senior secured credit agreement, providing for a revolving facility, dated as of November 16, 2017, with Wells Fargo Bank, N.A. and certain other lenders, as amended to date

 

Adjusted EBITDA – Net income (loss) appearing on the Condensed Consolidated Statements of Operations net of Income tax expense/(benefit), Interest expense, Depreciation and amortization and certain significant items

 

ASC – Financial Accounting Standards Board Accounting Standards Codification, which serves as the source for authoritative GAAP, as supplemented by rules and interpretive releases by the SEC which are also sources of authoritative GAAP for SEC registrants

 

Company Operated stores – Lands’ End retail stores in the Retail distribution channel

 

Debt Facilities – Collectively, the Term Loan Facility and ABL Facility

 

Deferred Awards – Time vesting stock awards

 

EPS – Earnings per share

 

FASB – Financial Accounting Standards Board

 

Fiscal 2023 – The 53 weeks ending February 2, 2024

 

Fiscal 2022 – The 52 weeks ended January 27, 2023

 

GAAP – Accounting principles generally accepted in the United States

 

LIBOR – London inter-bank offered rate

 

Option Awards – Stock option awards

 

Performance Awards – Performance-based stock awards

 

SEC – United States Securities and Exchange Commission

 

Second Quarter 2023 – The 13 weeks ended July 28, 2023

 

Second Quarter 2022 – The 13 weeks ended July 29, 2022

 

SOFR – Secured Overnight Funding Rate

6


Table of Contents

 

 

 

Target Shares – Number of restricted stock units awarded to a recipient which reflects the number of shares to be delivered based on achievement of target performance goals

 

Term Loan Facility – Term loan credit agreement, dated as of September 9, 2020, among the Company, Fortress Credit Corp., as Administrative Agent and Collateral Agent, and the lenders party thereto, as amended to date

 

Third Quarter 2023 – The 13 weeks ended October 27, 2023

 

Third Quarter 2022 – The 13 weeks ended October 28, 2022

 

 

Basis of Presentation

 

The Condensed Consolidated Financial Statements include the accounts of Lands’ End, Inc. and its subsidiaries. All intercompany transactions and balances have been eliminated.

 

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all material adjustments which are of a normal and recurring nature necessary for a fair presentation of the results for the periods presented have been reflected. Dollar amounts are reported in thousands, except per share data, unless otherwise noted. Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in the Lands’ End Annual Report on Form 10-K filed with the SEC on April 10, 2023.

 

Macroeconomic Challenges

 

Macroeconomic issues, such as recent inflationary pressures and rising interest rates, have continued to have an impact on the Company’s business. Since apparel purchases are discretionary expenditures that historically have been influenced by domestic and global economic conditions, higher prices of consumer goods due to inflation may result in less discretionary spending for consumers which may negatively impact customer demand and require higher levels of promotion in order to attract and retain customers. Additionally, interest expense could be negatively affected by any continued rate increases due to the variable interest rates associated with the Company’s Debt Facilities. These macroeconomic challenges have led to increased cost of raw materials, packaging materials, labor, energy, fuel, debt and other inputs necessary for the production and distribution of the Company’s products.

 

Corporate Restructuring

 

The Company reduced corporate positions, primarily in the Company’s Hong Kong sourcing office, during Third Quarter 2023. The Company incurred total severance costs of approximately $2.3 million related to the reduction in corporate positions which was recorded in Other operating expense, net in the Consolidated Statements of Operations. As of October 27, 2023, approximately $0.4 million of the severance costs had yet to be paid and is included in Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets.

 

Lands’ End Japan Closure

 

During Second Quarter 2022, the Board of Directors approved a plan to wind down and cease operations of Lands’ End Japan KK. Lands’ End Japan KK represents the Japan eCommerce operating segment. For a discussion on this operating segment, see Note 13, Segment Reporting. The Company incurred closing costs of approximately $0.1 million and $3.0 million during the 13 weeks ended October 27, 2023 and October 28, 2022, respectively. For the 39 weeks ended October 27, 2023 and October 28, 2022 the Company incurred closing costs of approximately $0.2 million and $3.0 million, respectively, recorded in Other operating expense, net in the Consolidated Statements of Operations. See Note 9, Lands’ End Japan Closure.

 

 

7


Table of Contents

 

 

Goodwill and Indefinite-Lived Intangible Asset Impairment Analysis

Goodwill and the indefinite-lived trade name intangible asset are tested separately for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment assessments contain multiple uncertainties because the calculation requires management to make assumptions and to apply judgment to estimate future cash flows and asset fair values, including forecasting cash flows under different scenarios.

 

Goodwill impairment assessments

 

In connection with the preparation of the financial statements included in this Form 10-Q, the Company considered the decline in the Company’s stock price and market capitalization, as well as current market and macroeconomic conditions, to be a triggering event for the U.S. eCommerce and Outfitters reporting units and therefore completed an interim test for impairment of goodwill for these reporting units as of October 27, 2023. The Company tested goodwill for impairment using a one-step quantitative test. The quantitative test compares the reporting unit’s fair value to its carrying value. An impairment is recorded for any excess carrying value above the reporting unit’s fair value, not to exceed the amount of goodwill. The Company estimates fair value of its reporting units using a discounted cash flow model, commonly referred to as the income approach. The income approach uses a reporting unit’s projection of estimated operating results and cash flows that is discounted using a weighted-average cost of capital that reflects current market conditions appropriate to the Company’s reporting unit. The discounted cash flow model uses management’s best estimates of economic and market conditions over the projected period using the best information available, including growth rates in revenues, costs and estimates of future expected changes in operating margins and cash expenditures. Other significant estimates and assumptions include terminal value growth rates, weighted average cost of capital and changes in future working capital requirements.

 

The testing resulted in full impairment of $70.4 million and $36.3 million of goodwill allocated to the Company’s U.S. eCommerce and Outfitters reporting units, respectively.

 

Indefinite-lived intangible asset impairment assessments

 

The Company’s indefinite-lived intangible asset is the Lands’ End trade name. The Company reviews the trade name for impairment on an annual basis during the fourth fiscal quarter, or whenever events or changes in circumstances indicate the carrying value may not be recoverable. The fair value of the trade name indefinite-lived intangible asset is estimated using the relief from royalty method. The relief from royalty method is based on the assumption that, in lieu of ownership, a firm would be willing to pay a royalty in order to exploit the related benefits of this asset class. The relief from royalty method involves two steps: (1) estimation of reasonable royalty rates for the assets and (2) the application of these royalty rates to a forecasted net revenue stream and discounting the resulting cash flows to determine a present value. The Company multiplies the selected royalty rate by the forecasted net revenue stream to calculate the cost savings (relief from royalty payment) associated with the asset. The cash flows are then discounted to present value using the selected discount rate and compared to the carrying value of the asset.

 

In connection with the preparation of the financial statements included in this Form 10-Q, the Company considered the decline in the Company’s stock price and market capitalization, as well as current market and macroeconomic conditions, to be a triggering event for the Lands’ End trade name. The fair value of the trade name indefinite-lived intangible asset was estimated using the relief from royalty method and the testing resulted in no impairment to the Lands’ End trade name. The Company’s impairment testing indicates the fair value of the trade name exceeds the carrying value by 6.1%.

 

Long-lived Asset Impairment Analysis

 

Property and equipment are subject to a review for impairment if events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. In accordance with ASC 360, Property, Plant and Equipment (“ASC 360”) the Company reviewed the long-lived asset groups for impairment as of October 27, 2023.

 

The Company Operated store long-lived asset group, including Operating right-of-use assets, are regularly reviewed for impairment indicators. Impairment is assessed at the individual store level which is the lowest level of identifiable cash flows and considers the estimated undiscounted cash flows over the asset’s remaining life. If estimated undiscounted cash flows are insufficient to recover the investment, an impairment loss is recognized equal to the difference between the estimated fair value of the asset and its carrying value, net of salvage, and any costs of disposition. The fair value estimate is generally the discounted amount of estimated store-specific cash flows. The Company recognized long-lived asset impairment for Operating lease right-of-use assets and property and equipment, net for individual identified Company Operated stores in the amount of no impairment and $0.1 million as of October

8


Table of Contents

 

 

27, 2023 and October 28, 2022, respectively, recorded in Other operating expense, net in the Condensed Consolidated Statement of Operations.

 

The Company reviewed the remaining long-lived asset groups for impairment as of October 27, 2023. The Company assessed the recoverability of our long-lived asset groups by comparing their projected undiscounted cash flows associated over remaining estimated useful lives of the primary asset in the long-lived asset group against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. As a result of the testing the undiscounted cash flows of the remaining asset groups exceeded their respective carrying amount resulting in no impairment.

NOTE 2. RECENT ACCOUNTING PRONOUNCEMENTS

 

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”) which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The guidance provides optional expedients and exceptions for applying generally accepted accounting principles to transactions affected by reference rate reform if certain criteria are met. These transactions include contract modifications, hedge relationships and sale or transfer of debt securities classified as held-to-maturity. This ASU, which was effective upon issuance and modified by ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of Sunset Date of Topic 848, may be applied through December 31, 2024, is applicable to all contracts and hedging relationships that reference the LIBOR or any other reference rate expected to be discontinued. The guidance in ASU 2020-04 may be implemented over time as reference rate reform activities occur.

 

As part of the response to the reference rate reform, during Second Quarter 2023, the Company amended the Debt Facilities to replace the interest rate based upon the LIBOR benchmark to the SOFR benchmark. See Note 5, Debt for additional details regarding these changes. Concurrent with the amendments, the Company adopted ASU 2020-04. The Company utilized optional practical expedients for contract modifications under ASC 848-20-358 Contracts within the Scope of Topic 470 and the adoption of ASU 2020-04 did not have a material impact on the Company’s Condensed Consolidated Financial Statements.

NOTE 3. LOSS PER SHARE

 

The numerator for both basic and diluted EPS is net loss. The denominator for basic EPS is based upon the number of weighted average shares of Lands’ End common stock outstanding during the reporting periods. The denominator for diluted EPS is based upon the number of weighted average shares of Lands’ End common stock and common stock equivalents outstanding during the reporting periods using the treasury stock method in accordance with GAAP. Potentially dilutive securities for the diluted EPS calculations consist of non-vested equity shares of common stock and in-the-money outstanding options where the current stock price exceeds the option strike price.

 

The following table summarizes the components of basic and diluted EPS:

 

 

 

13 Weeks Ended

 

 

39 Weeks Ended

 

(in thousands, except per share amounts)

 

October 27, 2023

 

 

October 28, 2022

 

 

October 27, 2023

 

 

October 28, 2022

 

Net loss

 

$

(112,394

)

 

$

(4,682

)

 

$

(122,064

)

 

$

(9,232

)

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average common shares outstanding

 

 

31,887

 

 

 

33,064

 

 

 

32,140

 

 

 

33,196

 

Dilutive effect of stock awards

 

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average common shares outstanding

 

 

31,887

 

 

 

33,064

 

 

 

32,140

 

 

 

33,196

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic loss per share

 

$

(3.52

)

 

$

(0.14

)

 

$

(3.80

)

 

$

(0.28

)

Diluted loss per share

 

$

(3.52

)

 

$

(0.14

)

 

$

(3.80

)

 

$

(0.28

)

 

Stock awards are considered anti-dilutive based on the application of the treasury stock method or in the event of a net loss. Anti-dilutive shares excluded from the diluted weighted average shares outstanding were 832,717 anti-dilutive shares in the 13 weeks ended October 27, 2023, 1,098,662 anti-dilutive shares in the 13 weeks ended October 28, 2022, 1,028,885 anti-dilutive shares in the 39 weeks ended October 27, 2023 and 1,170,934 anti-dilutive shares in the 39 weeks ended October 28, 2022.

9


Table of Contents

 

 

NOTE 4. OTHER COMPREHENSIVE LOSS

 

Other comprehensive loss encompasses all changes in equity other than those arising from transactions with stockholders and is comprised solely of foreign currency translation adjustments.