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Background and Basis of Presentation | 9 Months Ended
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Oct. 29, 2021
Organization Consolidation And Presentation Of Financial Statements [Abstract] |
Background and Basis of Presentation | NOTE 1. BACKGROUND AND BASIS OF PRESENTATION Description of Business Lands’ End, Inc. (“Lands’ End” or the “Company”) is a leading uni-channel retailer of casual clothing, accessories, footwear and home products. Lands’ End offers products online at www.landsend.com, on third-party online marketplaces and through its own Company Operated stores, as well as third-party retail locations. 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 home. 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 agreements, 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
| • | ASU – Financial Accounting Standards Board Accounting Standards Update
| • | CARES Act – The Coronavirus Aid, Relief and Economic Security Act signed into law on March 27, 2020
| • | 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
| • | First Quarter 2021 – The 13 weeks ended April 30, 2021
| • | First Quarter 2020 – The 13 weeks ended May 1, 2020
| • | Fiscal 2022 – The 52 weeks ending January 27, 2023
| • | Fiscal 2021 – The 52 weeks ending January 28, 2022
| • | Fiscal 2020 – The 52 weeks ended January 29, 2021
| • | 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 2020 – The 13 weeks ended July 31, 2020
| • | 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
| • | Third Quarter 2021 – The 13 weeks ended October 29, 2021
| • | Third Quarter 2020 – The 13 weeks ended October 30, 2020
| • | Year-to-Date 2021 – The 39 weeks ended October 29, 2021
| • | Year-to-Date 2020 – The 39 weeks ended October 30, 2020
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 March 25, 2021. Impact of the COVID-19 Pandemic COVID-19 surfaced in late 2019 and in March 2020, the World Health Organization declared COVID-19 a pandemic. The onset of the COVID-19 pandemic had a disruptive impact on the Company’s business operations and an unfavorable impact on the Company’s results of operations during the first half of Fiscal 2020. During the Second Quarter 2020, the Company began a significant recovery that continued to build on the momentum experienced before the COVID-19 pandemic. The Company’s strong foundation and ongoing enhancements across the four strategic pillars of product, digital, uni-channel distribution and infrastructure and business processes supported the Company during this COVID-19 pandemic and continues to support the Company’s financial performance and encouraging customer metrics. The ultimate timing and impact of customer demand levels across all distribution channels will depend on the duration and scope of the COVID-19 pandemic, overall economic conditions and consumer preferences. The ongoing COVID-19 pandemic continued to adversely impact the Company in the Third Quarter 2021 by disrupting its supply chain, leading to shipping and inventory receipt delays, and remains a threat to the health and welfare of the Company’s workforce. Health and Safety of Employees and Consumers From the beginning of the COVID-19 pandemic, the Company’s priority has been the safety of employees and customers. On March 16, 2020, the Company temporarily closed its Company Operated stores. These stores reopened during Second Quarter 2020. Since the onset of the COVID-19 pandemic, the Company has taken extra precautions in its offices, distribution centers and Company Operated stores which have varied from time to time based on the then current guidance from global, federal and state health authorities. These measures have included COVID-19 retail guidelines, work-from-home policies, social distancing, masking, thermal scanning and partitions in facilities. With the emergence of COVID-19 variants and periodic increases in number of reported cases affecting different regions, the Company has been required to keep these measures in place longer than anticipated. Supply Chain The COVID-19 pandemic continues to cause supply chain disruptions across all industries, and the Company continually monitors its supply chain for manufacturing and transportation delays caused or exacerbated by the COVID-19 pandemic. During Fiscal 2021, the COVID-19 pandemic impacted the Company’s distribution centers, third-party manufacturing partners and logistics partners, including shipping delays and port congestion, and closure of certain third-party manufacturing facilities and production lines. These disruptions have resulted in later timing of Fiscal 2021 inventory receipts that have led, at times, to lower inventory positions and higher than normal back orders, as manufacturing, transport and receipt of inbound product is delayed. In addition, the Company has experienced higher freight and distribution costs. The Company expects some of these supply chain disruptions and increases in costs to continue through the balance of Fiscal 2021 and into the first half of Fiscal 2022. As a result of these impacts, the Company has experienced later than expected inventory receipts and inventory availability for the Company’s distribution channels. These shipping delays and additional costs may impact the Company’s future net sales, gross margin and net earnings depending upon the ultimate timing of delivery and availability of product to sell. Labor Shortages Due to the seasonal nature of the business, the Company relies heavily on flexible part-time employees to staff the distribution centers in support of its peak seasons, including the back-to-school shopping season and fourth fiscal quarter holiday shopping season. The Company has experienced a labor shortage and has been unable to fill the flexible part-time peak staffing requirements at the distribution centers for both peak seasons. During the back-to-school season the labor shortage in monogramming and embroidery services caused delays in fulfilling customer orders. The Company has also been unable to attract as many seasonal part-time workers as was targeted to hire for the holiday shopping season. The Company provided financial incentives to attract and retain the part-time staffing and has utilized the Company’s corporate employee workforce to provide additional assistance in the distribution centers. The labor shortage may adversely impact the Company’s future net sales and earnings if orders are not fulfilled on a timely basis, which could discourage orders or lead to cancelled orders.

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- Definition The entire disclosure for the general note to the financial statements for the reporting entity which may include, descriptions of the basis of presentation, business description, significant accounting policies, consolidations, reclassifications, new pronouncements not yet adopted and changes in accounting principles. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -URI http://asc.fasb.org/topic&trid=2197479 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -URI http://asc.fasb.org/topic&trid=2134479 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -URI http://asc.fasb.org/topic&trid=2122394 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 + Details
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