Lands' End, Inc. announced its financial results for the second quarter ended July 31, 2026. The company reported net revenue of $302.0 million for the quarter, representing a 2.7% increase compared to the same period in the prior year, which was $294.1 million.
Revenue growth was driven by the U.S. Digital Segment, which saw net revenue rise to $268.9 million, a 5.3% increase from $255.3 million in the prior year. Specifically, U.S. eCommerce revenue increased to $182.4 million, up 9.0% from $167.3 million, attributed to carryover shipments following a temporary disruption from a new warehouse management system rollout. The Outfitters channel also saw growth, reaching $69.3 million, a 4.4% increase from $66.4 million.
Conversely, the Third Party channel reported a decrease, with net revenue falling to $17.2 million, a 20.4% drop from $21.6 million in the prior year. The company stated this was due to a strategic shift to prioritize profitable sales over lower-value promotional volume.
Gross profit for the quarter was $157.0 million, an increase of $13.6 million from the prior year. The company reported a gross margin of 52.0%, an increase of approximately 320 basis points from 48.8% in the prior year. This improvement was driven by IEEPA tariff refunds, partially offset by a new royalty structure and temporary costs associated with the warehouse management system.
Despite the revenue gains, the company reported a net income of $3.5 million for the quarter, compared to a net loss of $3.7 million in the prior year. Adjusted EBITDA was $11.3 million, a decrease of 25% from $15.1 million in the prior year.
On the balance sheet, cash and cash equivalents stood at $16.1 million as of July 31, 2026, down from $21.3 million the previous year. Inventories increased to $342.0 million, a 13% year-over-year increase, reflecting a seasonal build to support the holiday season. The company used $86.5 million in net cash for operating activities during the 26 weeks ended July 31, 2026, primarily due to the closing of the WHP Global transaction and inventory buildup.
Regarding capital allocation, the company repurchased $10.5 million of its common stock during the second quarter. As of July 31, 2026, the company had $60.0 million in borrowings outstanding and $89.3 million of availability under its ABL Facility.
The company provided guidance for the third quarter of fiscal 2026, expecting net revenue between $300.0 million and $330.0 million. For the full fiscal year, the company expects net revenue between $1.30 billion and $1.35 billion, with net income projected between $317.0 million and $325.0 million.
