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Lands' End Inc

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Lands' End Inc AI Insights

Informational only. Not investment advice.
As of 2025-12-31

Snapshot

  • Tangible book value is NEGATIVE (-26M) with goodwill at 257M (111% of equity) - material impairment risk if brand value deteriorates[Tangible Book Value]
  • Interest expense of 37.3M TTM consumes 67% of operating income (55.3M) - debt servicing severely constrains profitability[Interest Expense]
  • Gross margin 48.8% TTM exceeds industry median 39.6% by 23%, but net margin 0.9% trails median 2.2% - cost structure eroding advantage[Net Margin]

Watch Triggers

  • Interest Expense: Exceeds 75% of operating incomeSignals debt spiral - would leave insufficient cash for operations and capex
  • Inventory: Exceeds 30% of TTM revenueIndicates demand weakness requiring margin-destroying markdowns
  • Goodwill and Other Intangible Assets: Any impairment charge announcedWould eliminate remaining equity cushion given negative tangible book

Bull Case

Gross margin 48.8% TTM (23% above industry) shows brand pricing power; if SG&A rationalized, operating leverage could unlock 200+ bps margin expansion

Gross MarginOperating Expense

P/S ratio 0.34x TTM vs industry median 0.44x - 23% discount despite above-median revenue of 1.31B and asset turnover 1.55x

P/S RatioAsset Turnover

Bear Case

Revenue declined -2.5% 5Y CAGR vs industry median +3.7% growth - structural share loss in competitive apparel retail

Total Revenue 5Y Growth

Inventory 348M is 26% of revenue with negative operating CF (-15.7M) - potential markdown risk and working capital trap

InventoryCash Flow from Continuing Operating Activities

Bull vs Bear Balance

AI-generated sentiment analysis based on fundamental metrics and market conditions.

BearBull
35%

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Forward Thesis

Debt burden will force strategic action (refinancing, asset sale, or equity raise) within 18 months

1-3yhigh
  • Debt/equity 1.41x with 325M total debt vs 231M equity
  • Interest expense 37.3M vs FCF 10.6M TTM - unsustainable
  • Net debt 269M exceeds 3x EBITDA (86.8M)
FCF 10.6M TTM barely covers interestCash only 36M vs 13M current debtOperating CF -15.7M most recent period

Valuation Context

Caveats

Data Partners
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Fundamental company data provided by Morningstar, updated daily.

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