LANDS' END, INC. (LE)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion in conjunction with the Condensed Consolidated Financial Statements and accompanying notes included elsewhere in this Quarterly Report on Form 10-Q. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. The matters discussed in these forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those made, projected or implied in the forward-looking statements. See “Cautionary Statement Regarding Forward-Looking Information” below, “Item 1A. Risk Factors” in our Annual Report filed on Form 10-K for the year ended January 30, 2026 and “Part II, Item 1A Risk Factors” of this Quarterly Report on Form 10-Q, for a discussion of the uncertainties, risks and assumptions associated with these statements.

As used in this Quarterly Report on Form 10-Q, references to the “Company”, “Lands’ End”, “we”, “us”, “our” and similar terms refer to Lands’ End, Inc. and its subsidiaries. Our fiscal year ends on the Friday preceding the Saturday closest to January 31. Other terms that are commonly used in this Quarterly Report on Form 10-Q are defined as follows:

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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

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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 other significant items

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Adjusted net income (loss) – Net income (loss) appearing on the Condensed Consolidated Statements of Operations excluding significant non-recurring or non-operational items. Adjusted net income (loss) is also presented on a diluted per share basis

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

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

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First Quarter 2026 – The 13 weeks ended May 1, 2026

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First Quarter 2025 – The 13 weeks ended May 2, 2025

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Fiscal 2036 – The 52 weeks ending January 30, 2036

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Fiscal 2026 – The 52 weeks ending January 29, 2027

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Fiscal 2025 – The 52 weeks ended January 30, 2026

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Fiscal 2024 – The 52 weeks ended January 31, 2025

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GAAP – Accounting principles generally accepted in the United States

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JV – Joint venture with WHP Global in which the Company owns 50% of the joint venture entity, LE Topco, LLC

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SOFR – Secured Overnight Funding Rate

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Term Loan Facility – Term loan credit agreement, dated as of December 29, 2023, among the Company, Blue Torch Capital, as Administrative Agent and Collateral Agent, and the lenders party thereto

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WHP Global – WH Topco, L.P. (d/b/a WHP Global)

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WHP Transaction – The transaction which, (i) the Company contributed all of its intellectual property and related assets associated with the “Lands’ End” brand, including all of the license agreements entered into in connection with Lands’ End’s licensing business (the “Contributed Assets”) to LE Topco, LLC (the “JV”) a newly formed Delaware limited liability company and wholly owned subsidiary and (ii) immediately thereafter, the Company sold a 50% controlling ownership stake in the JV to WHP Global

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Year-to-Date 2026 – The 13 weeks ended May 1, 2026

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Year-to-Date 2025 – The 13 weeks ended May 2, 2025

Executive Overview

Description of the Company

Lands’ End is a leading digital retailer of solution-based apparel, swimwear, outerwear, accessories, footwear, home products and uniforms. We offer products online at www.landsend.com, through third-party distribution channels and our own Company Operated stores. We also offer products to businesses and schools, for their employees and students, through the Outfitters distribution channel. We are a classic American lifestyle brand that creates solutions for life’s every journey.

Lands’ End was founded in 1963 by Gary Comer and his partners to sell sailboat hardware and equipment by catalog. While our product focus has shifted significantly over the years, we have continued to adhere to our founder’s motto as one of our guiding principles: “Take care of the customer, take care of the employee and the rest will take care of itself.”

We identify our operating segments according to how our business activities are managed and evaluated. Our operating segments consist of: U.S. eCommerce, Europe eCommerce, Outfitters, Third Party, Licensing and Retail.

We have determined that the U.S. eCommerce, Outfitters and Third Party operating segments share similar economic and other qualitative characteristics, and therefore, the results of these operating segments are aggregated into the U.S. Digital segment. The Europe eCommerce, Licensing and Retail operating segments are not quantitatively significant to be separately reported. See Note 13, Segment Reporting.

Distribution Channels

We identify six separate distribution channels for revenue reporting purposes:

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U.S. eCommerce offers products through our eCommerce website.

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Europe eCommerce offers products primarily direct to consumers located in Europe through eCommerce international websites as well as third-party marketplace websites.

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Outfitters sells uniform and logo apparel to businesses and their employees, as well as to student households through school relationships, located primarily in the U.S.

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Third Party sells products direct to consumers through third-party marketplace websites.

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Licensing earned royalties on the use of our trademark and any fulfillment fees for fulfillment services provided by us through the closing of the WHP Transaction. Effective April 1, 2026, the licensing segment earns fulfillment fees for fulfillment services provided by us.

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Retail sells products through the Company Operated stores, located in the U.S.

WHP Transaction

On January 26, 2026, we entered into a Membership Interest Purchase Agreement (“MIPA”) with WH Topco, L.P., a Delaware limited partnership doing business as WHP Global. On April 1, 2026 the MIPA and related transactions were closed and funded (the “Closing”), pursuant to which, (i) we contributed all of our intellectual property and related assets associated with the “Lands’ End” brand, including all of the license agreements entered into in connection with our licensing business (the “Contributed Assets”) to LE Topco, LLC (the “JV”) a newly formed Delaware limited liability company and wholly owned subsidiary and (ii) immediately thereafter, we sold a 50% controlling ownership stake in the JV to WHP Global for an aggregate purchase price of $300 million in cash, and contributed initial cash of $1.25 million to the JV.

In addition, on April 1, 2026, WHP Global completed a tender offer for $100 million of our shares at a price of $45.00 per share. As a result of the tender offer, WHP Global owns approximately 7.2% of our outstanding shares of common stock and is now considered a related party.

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At the Closing, we entered into a License Agreement, pursuant to which the JV granted a license to us to design, manufacture, sell and promote certain categories of products (including the types of products that we designed, manufactured and sold as of the date of the License Agreement) in certain channels and in certain jurisdictions, including the United States, Canada, the United Kingdom, Germany, Austria and France. The License Agreement is royalty-bearing and subject to a guaranteed minimum royalty (“GMR”) of $50,000,000 per year (calculated pro rata based on an amount of $50,000,000 for a twelve (12) month period for the first contract year) through the end of the contract year 11, will increase one percent per year for contract years 12-21, and will be $55,231,106 for each contract year thereafter, with different royalty rates due depending on the channel under which products are sold. The initial term of the License Agreement is 10 years following the conclusion of the first contract year, and the License Agreement automatically renews for up to 12 successive renewal terms of 7 years each, unless we provide notice of non-renewal at least 24 months prior to the end of the initial or applicable renewal term. The License Agreement is only terminable by the JV if we breach our obligation to make its required guaranteed minimum payments, or to make undisputed royalty payments, in each case subject to an opportunity to cure such non-payment within a certain period of time. Additionally, in certain WHP Global monetization events, such as a qualifying public listing or majority sale, we may have the right or obligation to exchange our interest in the JV for equity in WHP Global, at the same valuation multiple as the WHP Global monetization event.

We determined that the cash invested, along with the difference between our closing price of the common stock on the day of the closing of the transaction implied a fair value of the JV of $748.6 million. The carrying amount of the intellectual property assets was $257.0 million, previously classified as Asset Held for Sale as of January 30, 2026, resulting in a gain of $491.6 million included in Gain on WHP Transaction on the Condensed Consolidated Statements of Operations.

Macroeconomic Challenges

Macroeconomic issues which impact consumer discretionary spending, such as realized inflation-based price increases and high interest rates have continued to have an impact on our business. Apparel purchases historically have been influenced by domestic and global economic conditions, which may negatively impact customer demand and may require higher levels of promotion in order to attract and retain customers. Macroeconomic challenges may lead to increased cost of raw materials, packaging materials, labor, energy, fuel, debt and other inputs necessary for the production and distribution of our products. Moreover, uncertainty with respect to trade policy and tariffs, including increased tariffs applicable to countries where our vendors manufacture Lands’ End product, may result in an increase in the cost of our products.

In addition, conflict‑related disruptions in global energy markets and shipping lanes in early 2026 have contributed to heightened volatility in crude oil and refined‑product prices and interruptions to certain maritime routes, which may result in higher freight and delivery costs, carrier surcharges, longer transit times, and inventory delays.

Restructuring and Other Costs

We have incurred restructuring and other charges related to cost optimization of business operations and exploring strategic alternatives. During First Quarter 2026 and First Quarter 2025, we incurred ongoing costs related to exploring strategic alternatives to maximize shareholder value and we included those costs as part of restructuring and other. This process culminated in the WHP Transaction. Additionally, during First Quarter 2025, we reduced approximately 6% of corporate office positions and incurred restructuring charges, primarily severance and benefit and other related costs. The reductions in the corporate office positions were made to better align with the evolving needs of the business and to invest in key growth areas.

We incurred $23.3 million and $3.3 million of restructuring and other costs during the First Quarter 2026 and First Quarter 2025, respectively.

As of May 1, 2026, approximately $2.8 million of restructuring and other costs incurred had yet to be paid and are included in Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets.

Basis of Presentation

The Condensed Consolidated Financial Statements include the accounts of Lands’ End, Inc. and its subsidiaries.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion in conjunction with the Consolidated Financial Statements and accompanying notes included elsewhere in this Annual Report on Form 10-K. Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. The matters discussed in these forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those made, projected or implied in the forward-looking statements. See “Cautionary Statement Concerning Forward-Looking Information” below and Item 1A, Risk Factors, in this Annual Report on Form 10-K for a discussion of the uncertainties, risks and assumptions associated with these statements.

This section discusses our results of operations for the year ended January 30, 2026 as compared to the year ended January 31, 2025. For a discussion and analysis of the year ended January 31, 2025 compared to February 2, 2024, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 7 of our Annual Report on Form 10-K for the year ended January 31, 2025, filed with the SEC on March 27, 2025.

As used in this Annual Report on Form 10-K, references to the “Company”, “Lands’ End”, “we”, “us”, “our” and similar terms refer to Lands’ End, Inc. and its subsidiaries. Our fiscal year ends on the Friday preceding the Saturday closest to January 31.

Executive Overview

Description of the Company

Lands’ End, Inc. is a leading digital retailer of solution-based apparel, swimwear, outerwear, accessories, footwear, home products and uniforms. We offer products online at www.landsend.com, through third-party distribution channels, our own Company Operated stores and third-party license agreements. We also offer products to businesses and schools, for their employees and students, through the Outfitters distribution channel. We are a classic American lifestyle brand that creates solutions for life’s every journey.

Lands’ End was founded in 1963 by Gary Comer and his partners to sell sailboat hardware and equipment by catalog. While our product focus has shifted significantly over the years, we have continued to adhere to our founder’s motto as one of our guiding principles: “Take care of the customer, take care of the employee and the rest will take care of itself.”

Segment Reporting

We identify our operating segments according to how our business activities are managed and evaluated. Our operating segments consisted of: U.S. eCommerce, Europe eCommerce, Outfitters, Third Party, Licensing and Retail.

We have determined that the U.S. eCommerce, Outfitters and Third Party operating segments share similar economic and other qualitative characteristics, and therefore, the results of these operating segments are aggregated into the U.S. Digital segment. The Europe eCommerce, Licensing and Retail operating segments are not quantitatively significant to be separately reported. See Note 13, Segment Reporting.

Distribution Channels

We identify six separate distribution channels for revenue reporting purposes.

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U.S. eCommerce offers products through our eCommerce website.

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Europe eCommerce offers products primarily direct to consumers located in Europe through eCommerce international websites as well as third-party marketplace websites.

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Outfitters sells uniform and logo apparel to businesses and their employees, as well as to student households through school relationships, located primarily in the U.S.

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Third Party sells products direct to consumers through third-party marketplace websites.

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Licensing earns royalties on the use of our trademark and any fulfillment fees for fulfillment services provided by us.

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Retail sells products through Company Operated stores, located in the U.S.

Pending WHP Transaction

On January 26, 2026, we announced the Pending WHP Transaction and entered into a Membership Interest Purchase Agreement (the “MIPA”), by and among the Company, Lands’ End Direct Merchants, Inc., a wholly owned subsidiary of Lands’ End, WH Borrower, LLC, WH Topco, L.P. (d/b/a WHP Global) (“WHP Global”), and LEWHP LLC (“WHP”).

Upon the terms and subject to the conditions set forth in the MIPA, at closing (i) we will contribute all of our intellectual property and related assets associated with the “Lands’ End” brand, including all of the license agreements entered into in connection with Lands’ End’s licensing business to a newly formed Delaware limited liability company and wholly owned subsidiary of Lands’ End (“IPCo”), and (ii) immediately thereafter, we will sell a 50% controlling ownership stake in IPCo, to WHP for an aggregate purchase price of $300 million in cash. The closing of the Pending WHP Transaction (the “Closing”) is subject to certain customary closing conditions. The MIPA contains certain termination rights for both Lands’ End and WHP, including, the right to terminate the MIPA if the Closing has not occurred prior to October 26, 2026.

In connection with the Closing, we will enter into voting agreements with WHP Topco and certain stockholders of Lands’ End (consisting of our controlling stockholder, Edward S. Lampert, and related funds) pursuant to which those stockholders will vote all of their shares of Common Stock in favor of a WHP Global monetization event (described below).

Limited Liability Company Agreement

At the Closing, Lands’ End, IPCo, WHP and WHP Topco will enter into the amended and restated limited liability company agreement of IPCo (the “LLCA”), pursuant to which IPCo will have a single class of membership interests consisting of Class A units (the “IPCo Units”), with Lands’ End owning 50% of the IPCo Units and WHP owning 50% of the IPCo Units. IPCo will be governed by a board of managers consisting of four managers, with two managers appointed by each of WHP and Lands’ End. The managers appointed by WHP will collectively have an extra vote permitting WHP to control decisions of the IPCo board of managers, which may change in the future based on the relative ownership percentages of WHP and Lands’ End in IPCo.

Lands’ End’s IPCo Units may be exchanged for equity of WHP Topco (“WHP Topco Units” as defined in the LLCA) in connection with the following WHP Topco monetization events: (i) in an initial public offering, direct listing or de-SPAC of WHP Topco, where WHP’s enterprise value-to-EBITDA multiple (the “Exchange Reference Multiple”), when calculated based on the WHP listing price, is equal to or greater than 13, then we can elect to exchange Company’s IPCo Units for WHP Topco Units or WHP can force Lands’ End IPCo Units to be exchanged for WHP Topco Units. If the Exchange Reference Multiple is less than 13, then we can elect to exchange our IPCo Units for WHP Topco Units; (ii) in a change of control of WHP Topco, where WHP’s Exchange Reference Multiple (counting only cash, public securities or other specified consideration) implied by the transaction is equal to or greater than the Minimum Multiple (as defined below), then we are required to exchange our IPCo Units for WHP Topco Units; and (iii) in a significant asset sale by WHP Topco of 50% or more of its EBITDA, where the Exchange Reference Multiple implied by such asset sale (counting only cash, public securities and other specified consideration) is greater than or equal to the Minimum Multiple, we are required to exchange our IPCo Units for WHP Topco

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Units. In the event of such an exchange, our stake in IPCo would be valued at the EBITDA multiple implied by WHP Topco’s monetization event.

The minimum multiple will initially be set at 13x, and we may reset such multiple one time per calendar year with WHP’s consent, not to be unreasonably withheld, conditioned or delayed (the “Minimum Multiple”). Our right to exchange in a WHP Topco monetization event terminates on the occurrence of any of the aforementioned monetization events, whether or not our interests in IPCo were exchanged.

Pursuant to the LLCA, WHP and Lands’ End generally may not transfer their IPCo Units prior to the third anniversary of Closing (other than to permitted transferees or a third party purchaser of WHP). After the third anniversary of the Closing, each party may transfer its respective IPCo Units but subject to tag along rights and a right of first offer in favor of the other parties. In addition, following the third anniversary of Closing, if either Lands’ End or WHP receives a third party acquisition offer for 100% of IPCo reflecting an IPCo’s enterprise value / LTM EBITDA multiple at or above 10, the party receiving the offer has a right to “drag” the other party into such sale, subject to an ownership threshold and the achievement of certain economic thresholds. The dragged party has the option to be dragged in such sale or, instead, buy out the other party’s stake at the purchase price proposed by the third party.

Pursuant to the LLCA, any excess cash above $5.0 million at IPCo (or $7.5 million, if, as of the end of any fiscal quarter, the revenue of IPCo and its subsidiaries with respect to the last 12 months ending on the most recent date for which financial statements are available is greater than $150.0 million) will be distributed to WHP and Lands’ End on a quarterly basis and based on ownership split.

License Agreement

At the Closing, Lands’ End and IPCo will enter into a License Agreement (the “License Agreement”), pursuant to which IPCo will grant us a license to design, manufacture, sell and promote certain categories of products (including the types of products that we design, manufacture and sell currently) (collectively, “Licensed Products”) in the United States, Canada, the United Kingdom, Germany, Austria and France (the “Territory”), with limitations to certain channels of sale. The license is exclusive within the Territory and specified trade channels with respect to certain core products, and non-exclusive with respect to other categories of Licensed Products. The license is royalty-bearing and subject to a guaranteed minimum royalty (“GMR”), with different royalty rates due, depending on the channel under which Licensed Products are sold. The GMR will be $50,000,000 per year (calculated pro rata based on an amount of $50,000,000 for a twelve (12) month period for the first contract year) through the end of the contract year 11, will increase one percent per year for contract years 12-21, and will be $55,231,106 for each contract year thereafter. In addition, we will be eligible to receive an adjustment to our royalties, which adjustment will be paid by IPCo on a quarterly basis, based on total royalties received by IPCo (including from other licensees) above a specified threshold.

The initial term of the License Agreement is 10 years following the conclusion of the first contract year, and the License Agreement automatically renews for up to 12 successive renewal terms of 7 years each, unless we provide notice of non-renewal at least 24 months prior to the end of the initial or applicable renewal term. The License Agreement is only terminable by IPCo if we breach our obligation to make our required guaranteed minimum payments, or to make undisputed royalty payments, in each case subject to an opportunity to cure such non-payment within a certain period of time.

In addition, pursuant to the MIPA, and subject to the terms and conditions set forth therein, WHP commenced a tender offer (the “Tender Offer”) to purchase up to 2,222,222 shares of our common stock (the “Common Stock”), par value $0.01 per share, at a price of $45.00 per share in cash, without interest and subject to any applicable withholding taxes, representing an aggregate value of up to approximately $100 million, which tender offer is intended to close

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