Lands’ End Reports Improved Gross Margin but Declining Adjusted EBITDA Amid E-Commerce Growth
Lands' End (NASDAQ:LE) reported fiscal second-quarter net revenue of $302.0 million, a 2.7% increase from the prior year period. The company's gross margin expanded by 320 basis points to 52.0%, primarily due to tariff refunds. However, adjusted EBITDA fell 25% to $11.3 million as certain benefits were excluded in this metric. U.S. e-commerce revenue grew significantly at 9.0% year-over-year to $182.4 million, with the U.S. Digital Segment reaching $268.9 million (+5.3%). Despite these gains, concerns remain about the sustainability of growth and margin improvements due to one-time benefits like tariff refunds. The company used proceeds from a WHP Global transaction to repay its term loan, reducing interest expenses significantly. However, inventory levels rose 13% year-over-year, absorbing significant cash flow during the first half of the fiscal year.
Tickers: $LE
Topics: adjusted EBITDA decline e-commerce growth gross margin expansion retail