[Management View]
Lands' End management emphasized the company's strategic pivot towards a distributed commerce model, leveraging asset-light initiatives such as licensing and third-party marketplaces. Over half of new customer growth now stems from these channels, requiring minimal capital investment. The company also highlighted its modular supply chain redesign, enabling tariff mitigation and sourcing flexibility. Key product launches, including the Lands' End Essentials line on Amazon, have driven customer acquisition and migration to the brand's primary website.

[Outlook]
For Q3 FY2025, Lands' End projects net revenue of $320M-$350M, GMV growth in the mid-to-high single digits, adjusted net income of $3M-$7M, and adjusted EBITDA of $24M-$28M. Full-year guidance includes net revenue of $1.33B-$1.4B, GMV growth in the low-to-mid single digits, adjusted net income of $19M-$27M, and adjusted EBITDA of $98M-$107M. Management remains optimistic about licensing and distributed commerce as primary growth drivers and continues to explore strategic alternatives.

[Financial Performance]
- Total Revenue: $294M, down 7% YoY.
- GMV: Flat YoY, indicating volume resilience despite revenue decline.
- Gross Margin: 49%, up 90 basis points YoY due to full-price selling and licensing growth.
- Adjusted EBITDA: $14M, down 18% YoY, impacted by tariffs, Europe performance, and swim season softness.
- U.S. eCommerce Sales: Down 11% YoY, attributed to a slow swim season start.
- Licensing Revenue: Up 19% YoY, driven by expanded channels.
- Europe Revenue: Down 15% YoY, affected by supply chain challenges and macroeconomic pressures.

[Q&A Highlights]

**Question 1:** What is driving the acceleration in momentum into Q3, and how are tariffs and pricing being managed?
**Answer:** Management attributed the momentum to the distributed commerce model, which aligns products with customer preferences across channels like Amazon and Nordstrom. The Lands' End Essentials line on Amazon has shown strong early results, with customers migrating to the brand's main site. Tariff costs are being shared among vendors, internal efficiencies, and customers, with minimal price increases passed on to consumers. Swim and outerwear were top-performing categories over Labor Day, reflecting the success of the weatherproofing strategy.

**Question 2:** Can you elaborate on licensing growth and its future potential?
**Answer:** Licensing revenue grew 36% YoY in the first half, with significant upside expected in the back half due to new licenses and holiday season contributions. Management sees "the sky as the limit" for licensing opportunities and is leveraging licensee collaborations to amplify brand presence in department stores and club channels.

**Question 3:** How is the outerwear category evolving, and what should we expect this year?
**Answer:** Outerwear continues to focus on wear-now, lighter products, with new innovations and customer-centric designs. Early reviews for new products, such as the Squall rain jacket, have been overwhelmingly positive, indicating strong demand.

**Question 4:** How is the catalog strategy evolving to target the 35-50-year-old demographic?
**Answer:** Catalogs are now highly segmented, targeting specific customer cohorts with tailored messaging. For example, traditional customers see pricing promotions, while new customers receive lifestyle-focused catalogs. This strategy has driven higher basket sizes and cross-category purchases among the target demographic.

**Question 5:** What is the outlook for the Outfitters business, and are there new opportunities?
**Answer:** The Outfitters segment is expanding in school uniforms and commercial uniforms, with a focus on healthcare as a new adjacent category. Recent wins, such as Delta Airlines, are expected to attract similar enterprise accounts.

**Question 6:** What progress is being made in Europe, and when will it contribute positively?
**Answer:** Europe is adopting the distributed commerce model, with strong starts on platforms like Amazon and NeXT. The UK market has turned a corner, while Germany is focusing on engaging traditional customers through catalogs. Designer collaborations are expected to enhance brand visibility and drive growth.

[Sentiment Analysis]
Management displayed confidence in the distributed commerce strategy and licensing growth, while acknowledging challenges in Europe and tariffs. Analysts were optimistic about the company's strategic initiatives but sought clarity on execution timelines and category-specific performance.

[Quarterly Comparison]
| Metric | Q2 2025 | Q2 2024 | YoY Change |
|-------------------------|-----------------|-----------------|------------------|
| Total Revenue | $294M | $316M | -7% |
| GMV | Flat | Flat | 0% |
| Gross Margin | 49% | 48.1% | +90 bps |
| Adjusted EBITDA | $14M | $17M | -18% |
| U.S. eCommerce Sales | -11% | N/A | N/A |
| Licensing Revenue | +19% | N/A | N/A |

[Risks and Concerns]
1. Europe revenue declined 15% YoY due to supply chain bottlenecks and macroeconomic pressures.
2. Tariff impacts remain a headwind, though partially mitigated.
3. U.S. eCommerce softness, particularly in swimwear, highlights seasonal vulnerabilities.
4. Execution risks in scaling licensing and distributed commerce initiatives.

[Final Takeaway]
Lands' End is navigating a challenging macroeconomic environment with a strategic pivot towards distributed commerce and licensing, which are driving resilience and new customer acquisition. While Europe and tariffs remain headwinds, the company's asset-light model and focus on weatherproofing assortments position it well for future growth. Investors should monitor the execution of licensing expansions and the turnaround in Europe for sustained performance improvements.