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Segment Reporting
 12 Months Ended
Jan. 31, 2025
Segment Reporting [Abstract]  
Segment Reporting

NOTE 13. SEGMENT REPORTING

The Company identifies operating segments according to how business activities are managed and evaluated. Following internal organizational changes and realignment of distribution channel responsibilities in Fourth Quarter 2024, the Company’s operating segments consisted of: U.S. eCommerce, Europe eCommerce, Outfitters, Third Party, Licensing and Retail. Beginning Fourth Quarter 2024, the Wholesale business is included in Licensing and prior periods were recast to reflect the change in operating segments for comparability purposes. During Fiscal 2022, the Company’s operating segments included Japan eCommerce. See Note 8, Lands’ End Japan Closure.

•
U.S. eCommerce offers products through the Company’s eCommerce website.
•
Europe eCommerce offers products primarily to consumers located in Europe and through eCommerce international websites and third-party affiliates.
•
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.
•
Third Party sells products direct to consumers through third-party marketplace websites.
•
Licensing earns royalties on the use of Lands’ End trademark and any fulfillment fees for fulfillment services provided by the Company.
•
Retail sells products through Company Operated stores, located in the U.S.

The internal reporting of these operating segments is based, in part, on the reporting and review process used by the Company’s chief operating decision maker (“CODM”), its Chief Executive Officer. The CODM assesses segment performance based on variable profit, which is defined as net revenue minus cost of sales and variable selling expenses to evaluate segment profitability and make decisions about resource allocations. The Company’s CODM monitors actual segment variable profit results relative to operating plan and forecast to assess the performance of the business and allocate resources. The CODM does not utilize segment asset information to evaluate performance and make resource allocation decisions, and thus such disclosures are not provided.

The Company determined 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.

The accounting policies of the segments are the same as those described in Note 2. The Company has determined its significant segment expense categories based on amounts regularly provided to the Company’s CODM to evaluate segment profitability and drive strategic decision making. The following presents U.S. Digital segment sales and expenses:

 

 

Fiscal 2024

 

 

Fiscal 2023

 

 

Fiscal 2022

 

(in thousands)

Segment

 

Total

 

 

Segment

 

Total

 

 

Segment

 

Total

 

Net revenue

$

1,154,442

 

$

1,154,442

 

 

$

1,293,178

 

$

1,293,178

 

 

$

1,308,810

 

$

1,308,810

 

All other net revenue (1)

 

 

 

208,493

 

 

 

 

 

179,330

 

 

 

 

 

246,619

 

Total consolidated net revenue

 

 

$

1,362,935

 

 

 

 

$

1,472,508

 

 

 

 

$

1,555,429

 

Product cost of goods sold

 

444,092

 

 

 

 

 

553,169

 

 

 

 

 

590,108

 

 

 

Shipping cost of goods sold

 

157,557

 

 

 

 

 

190,059

 

 

 

 

 

213,800

 

 

 

Marketing costs

 

179,499

 

 

 

 

 

174,701

 

 

 

 

 

167,440

 

 

 

Variable personnel costs

 

75,465

 

 

 

 

 

69,584

 

 

 

 

 

66,266

 

 

 

Other segment expenses (2)

 

32,407

 

 

 

 

 

39,744

 

 

 

 

 

36,605

 

 

 

Segment variable profit

$

265,422

 

 

 

 

$

265,921

 

 

 

 

$

234,591

 

 

 

 

(1)
All other net revenue is from Europe eCommerce, Licensing and Retail that does not meet the quantitative thresholds and Japan for Fiscal 2022
(2)
Other segment expenses include credit card fees, customer service, webhosting, supplies and other miscellaneous expenses

The reconciliation between segment variable profit to consolidated income (loss) before income taxes is as follows:

(in thousands)

 

Fiscal 2024

 

 

Fiscal 2023

 

 

Fiscal 2022

 

Segment variable profit

 

$

265,422

 

 

$

265,921

 

 

$

234,591

 

All other variable profit (1)

 

 

45,949

 

 

 

26,405

 

 

 

23,722

 

Depreciation expense

 

 

(33,772

)

 

 

(38,465

)

 

 

(38,741

)

Goodwill impairment

 

 

-

 

 

 

(106,700

)

 

 

-

 

Unallocated corporate expenses (2)

 

 

(226,642

)

 

 

(224,676

)

 

 

(194,847

)

Interest expense

 

 

(40,439

)

 

 

(48,291

)

 

 

(39,768

)

Loss on extinguishment of debt

 

 

-

 

 

 

(6,666

)

 

 

-

 

Other (expense) income, net

 

 

(22

)

 

 

655

 

 

 

364

 

Income (loss) before income taxes

 

$

10,496

 

 

$

(131,817

)

 

$

(14,679

)

 

(1)
All other variable profit is from Europe eCommerce, Licensing and Retail that does not meet the quantitative thresholds and Japan for Fiscal 2022
(2)
Unallocated corporate expenses include fixed personnel costs, incentive compensation, office occupancy, information technology and professional fees

Net revenue is presented by distribution channel in the following table:

(in thousands)

 

Fiscal 2024

 

% of Net Revenue

 

Fiscal 2023

 

% of Net Revenue

 

Fiscal 2022

 

% of Net Revenue

U.S. eCommerce

 

$

842,751

 

61.8%

 

$

930,314

 

63.2%

 

$

955,752

 

61.4%

Outfitters

 

 

228,161

 

16.7%

 

 

269,943

 

18.3%

 

 

265,898

 

17.1%

Third Party

 

 

83,530

 

6.1%

 

 

92,921

 

6.3%

 

 

87,160

 

5.7%

Total U.S. Digital Segment revenue

 

 

1,154,442

 

 

 

 

1,293,178

 

 

 

 

1,308,810

 

 

Europe eCommerce

 

 

103,079

 

7.6%

 

 

112,855

 

7.7%

 

 

166,627

 

10.7%

Licensing and Retail

 

 

105,414

 

7.8%

 

 

66,475

 

4.5%

 

 

79,992

 

5.1%

Total Net revenue

 

$

1,362,935

 

 

 

$

1,472,508

 

 

 

$

1,555,429

 

 

 

The geographical allocation of Net revenue is based upon where the product is shipped. The following presents summarized geographical information:

(in thousands)

 

Fiscal 2024

 

% of Net Revenue

 

Fiscal 2023

 

% of Net Revenue

 

Fiscal 2022

 

% of Net Revenue

United States

 

$

1,245,240

 

91.4%

 

$

1,342,366

 

91.2%

 

$

1,368,518

 

88.0%

Europe

 

 

105,000

 

7.7%

 

 

114,778

 

7.8%

 

 

135,878

 

8.7%

Other (1)

 

 

12,695

 

0.9%

 

 

15,364

 

1.0%

 

 

51,033

 

3.3%

Total Net revenue

 

$

1,362,935

 

 

 

$

1,472,508

 

 

 

$

1,555,429

 

 

(1)
Fiscal 2022 includes Net revenue of $32.7 million from the Japan eCommerce distribution channel. See Note 8, Lands’ End Japan Closure.

Other than the United States no geographic region represented more than 10% of Net revenue.

Property and equipment, net by geographical location are as follows:

(in thousands)

 

Fiscal 2024

 

 

Fiscal 2023

 

United States

 

$

109,609

 

 

$

111,254

 

Europe

 

 

5,923

 

 

 

6,588

 

Asia

 

 

86

 

 

 

191

 

Total long-lived assets

 

$

115,618

 

 

$

118,033

 

 

Other than the United States, no geographic region is greater than 10% of total Property and equipment, net.