Lands' End sees notable business momentum with improved B2B performance and optimistic Q3 guidance despite revenue decline in Q2.

OPERATOR - (00:00:47)

Two Wall sites on hold. We appreciate your patience and ask that you please continue to stand by. Your program will begin momentarily. Please stand by. We're about to begin. Good afternoon everyone. Welcome to Today's lands end second quarter 2025 earnings conference call. At this time, all participants are in a listen only mode. Later, you will have the opportunity to ask questions during our question and answer session. You may register to ask a question at any time by pressing Star one on your telephone. Also, today's call is being recorded and if you should need any operator assistance during the call today, please press Star zero at any time now. At this time I'd like to turn things over to Mr. Tom Altos, senior Director of Financial Planning and Analysis. Please go ahead, sir.

Tom Elphos - Senior Director of Financial Planning and Analysis - (00:02:30)

Good evening and thank you for joining the Lands End Earnings Call for a discussion of our second quarter 2025 results which we released this afternoon and can be found on our website, lands end.com I'm Tom Elphos, Lands End Senior Director of Financial Planning and Analysis, and I'm pleased to join you Today with Andrew McLean, our Chief Executive Officer, and Bernie McCracken, our Chief Financial Officer. After the prepared remarks, we will conduct a question and answer session. Please also note that the information we're about to discuss includes forward looking statements. Such statements involve risks and uncertainties. The Company's actual results could differ materially from those discussed on this call. Factors that could contribute to such differences include, but are not limited to, those items noted and included in the company's SEC filings, including our annual report on Form 10K and quarterly reports on Form 10Q. The forward looking information that is provided by the Company on this call represents the Company's outlook as of today and we do not undertake any obligation to update forward looking statements made by us. Subsequent events and developments may cause the Company's outlook to change. During the call, we will be referring to non GAAP measures. These non GAAP measures are not prepared in accordance with Generally Accepted Accounting Principles. A reconciliation of non GAAP financial measures to the most directly comparable GAAP measures can be found in our earnings release issued earlier today, a copy of which is posted in the Investor Relations section of our website@lands end.com with that, I'll turn the call over to Andrew.

Andrew McLean - Chief Executive Officer - (00:04:12)

Thanks Tom. Good evening and thank you for joining us. To begin today's call, I want to spend a moment talking about a key theme we've seen over the past several months, including over the course of the second quarter and importantly continuing into the third quarter. That theme is a noticeable increase in momentum across our business. Across our key product categories, channels and engagement, we are seeing improvements that give us confidence that our strategy to serve our customers every journey is working. Our weatherproofed assortment that prioritizes newness and speed to market continues to resonate with customers, enables more high quality sales and deepens customer loyalty. Turning to the second quarter, we continue to reach new and existing customers across a broader broad base of channels. As we have done in previous quarters, we are engaging with them where and when they want to shop and providing considered merchandise stories that resonate individually and create leverage as we reposition the brand via a sophisticated distributed commerce model. Our increasing shift towards an asset light low capital intensity model allows us to rapidly deploy new this to optimize customer engagement and with GMV holding steady year on year, we're beginning to see the benefits of that work in the B2B channel. Our team built on their successes by deepening relationships in the travel and banking sectors, extending a number of our long term enterprise contracts. Critically, we continue to invest in our brand. Our deliberate strategy to weatherproof our assortment with solutions for life's every journey and deliver for our customers in any environment while also enhancing speed across our supply chain has enabled us to be nimble and react quickly, especially as we see buying patterns shifting to more wear now Items. In the second quarter, the B2C businesses were dominated by our licensing and third party marketplaces where we continue to see vastly expanded reach resulting in a more balanced model that importantly delivers over half of our new customer growth on virtually no capital investment. With regard to sourcing, as you've heard us talk about over the past several quarters, we have been intentionally repositioning our sourcing network to better serve the business we are building, leading to a more balanced supply chain that enables us to bring new solutions to customers with more suppliers and frequency throughout the year. For example, our license partners are becoming part of our sourcing network, allowing us low lift access to their vendor networks while also providing those same partners with leverage from the Lands' End sourcing footprint. Another consequential outcome of our updated sourcing strategy has been the ability to navigate tariffs. By tapping into the full breadth of our sourcing matrix, we're able to swiftly and strategically reposition fabric and manufacturing. As tariff conditions evolve, the resilience is there to see as we continue to deliver gross margin rates above last year in the quarter. Even as we felt initial tariff headwinds, we feel confident that we have mitigated the near term impact of tariffs for the remainder of fiscal 2025, especially with the majority of our fall holiday items already shipped. As Bernie will detail, this is reflected in our guidance. Turning to product, we had notable wins. We launched a focused Lands End Essentials line on Amazon consisting of approximately 40 styles providing access points to new and existing customers. The product key item basics across women's, men's and Swim is priced at the good end of our merchandising pyramid, gives a taste of the solutions Lands End is famous for and invites the customer to find the better best assortment on our brand site. This Essentials product line is a perfect segue from our licensing product to our brand and is attracting new customers in the brand channels. Credit to the tote bag where our ongoing efforts to collaborate and innovate, ranging in size from knee to maxi and in construction from canvas to straw, have allowed us to expand the assortment. We also added a customization package that is unique in the industry. As seasonal buying habits are changing, we are benefiting from the work we've done to weatherproof our assortment, allowing us to deliver customers what they want when they want it, be it swim for summer recreation or outerwear to battle the elements. Following a colder spring and slow, slower start for swim, we saw momentum build throughout the summer as weather improved and experienced a strong August. Both swim and outerwear were top five items over Labor Day weekend, reflecting changing consumer tastes around weatherproofing. As a nod to Q3, our customers are responding positively to our on trend assortments. Embroidered jeans are our best seller without the need to discount and we have expanded our popular barrel leg fit. We're pleased to report that these trends with our Wear now foam product are resonating strongly with customers, laying the foundation for a strong third quarter in these important franchise categories. Turning to the performance of our various businesses Beginning with our B2B business, our B2B business continues to set us apart from competitors and had a terrific quarter with growth in both top and bottom line performance. On the commercial uniforms side, our focus on building scale and contract duration with our enterprise customers yielded significant results. This year we have won and are extending contracts with several large clients marking our highest growth in contract duration that we have recorded during the second quarter this side of the company spin out in 2014. As we dial up this strategy, we expect to add other household names in our key industry sectors over the coming year. Our school uniform business had another strong quarter with revenue up high single digits fueled by new customer wins. We're continuing to win by leveraging the strength of our brand. Our steadfast focus on quality our market leading embroidery and personalization capabilities and our great customer service. Turning to our B2C business, our asset licensing business remains a significant growth vehicle for the Lands End brand. We saw particularly strong performance in the club stores with continued wins across men's, women's and kids categories and the expected introduction of footwear in that channel later in the year. Lands End remains a highly desirable brand with licensed partners reporting new interest from a number of distributors in both the department store and club channels. Our third party marketplace business delivered strong top line results driven by performance in Macy's and a record setting Prime Week on Amazon where we launched the Lands Ends Essential line I mentioned earlier. This targeted approach continues to enhance discoverability conversion and drive brand equity across platforms. Marketplaces are relatively low, lift capital, light and fit neatly into our distributed commerce go to market model. Along with licensing, we see marketplaces as a compelling driver of continued growth in the reach and brand value of Land's End and importantly, it's where our consumer is shopping and where we are meeting those new to our iconic brand. Our U.S. e commerce business continues its evolutionary journey as the central hub of our commerce strategy, representing the most fashion forward collection oriented manifestation of the brand. We continue to elevate the site creating a more immersive and experiential look and feel that best presents our collection to customers existing and new. Our recent momentum with a strong start to the third quarter is positioning Land's End as a trusted, high quality brand with broad consumer appeal, especially among the all important 35 to 50 year old demographic. The website in both mobile and desktop showcases ever greater levels of personalization. Our deployment of our new AI driven recommendation and outfitting engine makes it easier for customers to mix and match products. Additionally, we're driving more segmented and personalized campaigns like leveraging our SMS and email platforms while expanding communications with AI agents. A rapidly evolving search sector Social commerce is the final part of our distributed commerce platform. While we don't break out this segment and include it within our US E Commerce results, it had a wonderful quarter with our Instagram followers growing by over 100% since last year. Our total social traffic increased nearly 19% versus last year and nearly 60% in June and July versus last year. Reaching a new and younger customer. We created bespoke campaigns for example our Tote Girl summer campaign offering our iconic pocket tote with personalization options at a series of pop up shops in popular summer destinations. We continue to attract new customers at a rapid clip and the Tote remains our number one new to brand Acquisition Product Europe showed improvement during the second quarter with revenue declines beginning to moderate as we became more effective sellers and positioned the brand to build on the distributed commerce success that we are seeing in the U.S. specifically, we launched the French language website with limited discounting and a more evolved look and feel. In addition, we began to elevate the look and feel of the German and UK sites, collaborating with more premium partners like Sheerlux and Secret Escapes for fall holiday. We plan to launch several designer collaborations as part of that reposition. As with the us we look to asset light low lift launches to broaden our reach, including opening on Amazon, Debenhams and Next. With results significantly ahead of expectations, Europe will continue to be a test bed for us and while each market has its own dynamics, we're committed to building a global brand and view the halo that these markets can provide Lands End as invaluable. I'll now turn it over to Bernie to discuss our second quarter performance in more detail.

Bernie McCracken - Chief Financial Officer - (00:15:09)

Thank you Andrew. For the second quarter, total revenue performance was $294 million, a decrease of 7% compared to the second quarter last year and GMV was approximately flat year over year licensing and our presence across our third party marketplace partners continue to help the business diversify and reduce risk from any one business unit, product OR partner. Our US E Commerce business saw sales decrease 11% compared to the second quarter of 2024. The decrease was largely driven by the slow start to the swim season and as Andrew discussed, we saw strong swim results through Labor Day which we have incorporated into our third quarter forecast. Our third party marketplace business grew approximately 14% with year over year growth across our marketplaces. We were very pleased with our performance in Macy's and Amazon and we believe improved performance at Kohl's has positioned the marketplace business well for the back half of the year. Sales from Lands' End Outfitters increased 5% from the second quarter of 2024. Sales from our school uniform channel increased high single digits driven by our acquisition of new school accounts. Revenues from the Business Uniform channel were up year over year, driven by our enterprise accounts. Sales in Europe decreased 15% year over year, primarily due to supply chain challenges on key seasonal products and broader macroeconomic pressures. However, we are encouraged by the early progress from adding additional channels and expect this business to improve in the back. Half of the year. Revenue from our licensing business grew 19% year over year reflecting the continued momentum of our licensing program. This growth was fueled by increased brand visibility from existing licensees, further expanding our reach and impact. Gross Profit decreased by 6% compared to last year. Gross margin in the second quarter was 49%, an approximately 90 basis point improvement from the second quarter of 2024. The margin improvement was driven by continued strength in full price selling across key categories and expansion of our licensing business. SGA expenses decreased by $6 million year over year. As a percentage of net revenue, SGA increased 130 basis points, primarily driven by deleverage from lower revenues. For the second quarter we had an adjusted net loss of $1.9 million or $0.06 per share. We delivered adjusted EBITDA of $14 million in the second quarter representing a year over year decrease of 18%. The decrease was driven by initial tariff headwinds, Europe, E Commerce performance and the slow start to the swim season, partially offset by marketplaces, licensing and outfitters. Moving to our balance sheet inventories at the end of the second quarter were $302 million, down 3% compared to last year, reflecting disciplined inventory management and proactive measures to mitigate tariff impacts. In terms of our debt at the end of the second quarter our term loan balance was $241 million and our ABL had $35 million of borrowings outstanding. Total long term debt was flat to last year. During the second quarter we repurchased $2 million of shares under our $25 million share repurchase authorization announced in March of last year, bringing the balance of the remaining authorization to $9 million as of the end of the quarter. Now moving to guidance, our guidance includes the impact of tariffs at the current implemented rates. We are implementing mitigation measures to effectively manage the tariff headwinds at current levels for the remainder of fiscal 2025. For the third quarter we expect debt revenue to be between 320 million to $350 million while GMV is expected to be mid to high single digit growth, adjusted net income of $3 million to $7 million and adjusted diluted earnings per share of $0.10 to $0.22 and our adjusted EBITDA to be in the range of $24 million to $28 million. Turning to full year, we now expect net revenue to be between 1.33 to $1.40 billion while GMV is expected to be low to mid single digit growth, adjusted net income of $19 million to $27 million and adjusted diluted earnings per share of $0.62 to $0.88 and our adjusted EBITDA to be in the range of 98 million to $107 million. Our guidance for the full year incorporates approximately $25 million in capital expenditures. With that, I'll turn the call back over to Andrew.

Andrew McLean - Chief Executive Officer - (00:20:27)

Thanks, Bernie. I want to thank Lands End's employees for their hard work and dedication during the quarter. With their support, we have created a truly distributed commerce retailer with the reach to deliver for customers existing and new across channels, geographies and categories. Looking ahead to the third quarter, we are seeing broad strength across all categories in our US business. Building on our positive momentum and the trends we saw develop over the course of the second quarter. Our sales and margin over Labor Day weekend were the best we've had in the last decade, bringing significant new defile sign ups. As I mentioned earlier, this reflects the intentional work we've done to weatherproof our business and ensure our customers have what they want, when they want. Also underscores the strength of our strategy to be promotional around holidays while maintaining full price selling in between. Finally, the Board's previously announced process to explore strategic alternatives remains ongoing. We will not be commenting further on it at this time and we will provide an update once appropriate. With that, we look forward to your questions.

OPERATOR - (00:21:40)

Thank you very much ladies and gentlemen. At this time, if you would like to ask a question, please press Star one on your telephone and if you find your question has been addressed, you may remove yourself from the queue by pressing Star two Once again, Star one for questions. We'll go first this afternoon to Dana Telsey of the Telsey Group.

Dana Telsey - Equity Analyst - (00:21:58)

Hi, good afternoon everyone and nice to hear about the progress Andrew, the acceleration in momentum on the top line that you're talking about frankly into the third quarter now what are you seeing by product category, how much of it is lower promotions and given the tariff environment have you taken price? And then also it sounds like the Lands' End essentials is a new opportunity. What are you seeing that's driving the business? How is the margin and price points relative to the rest of the mix? Thank you.

Andrew McLean - Chief Executive Officer - (00:22:31)

Thanks, it's nice to hear from you. We've really been progressing the business towards a distributed commerce model over the last 12 months. We, we saw this with our customers shopping habits, you know as we move from our very traditional customer, our resolver to our revolver and I know, I've talked about that on previous calls know we started to actually look at where the customer was shopping and quite a lot of the work we did around working with AI agents so took us down this path where we started to see there's, there's customer habits are changing, customers are migrating to different channels, there are new customers to tap into. And so it became Clear to us that we had opportunities that lay beyond just a traditional brand site. The brand site will always be the outfit to us. It's going to be the most fashion forward version of the brand. It's going to be the most complete version. But we know that those customers are shopping and you know, we see within our top marketplaces from the distributed model, you know, we see that, you know, there's an Amazon customer who wants a price point. And by really focusing in on a couple of handfuls of SKUs, we put ourselves in a position that we can really lean in, put the marketing behind those SKUs and reach them at price points that matter. And we think we can build a significant business. Our Q3 numbers have been absolutely astonishing actually as we've learned further into this. And it's like what we're seeing is a tremendous amount of those customers then migrate to see the full assortment on Lands' End dot com. So we think that the, there is a flywheel effect that's going to be happening and that will continue to accelerate and spin the business forward as we see that momentum continue. I would just note that at the top end of that we have Macy's and Nordstrom where we sell some of the highest price points that we have in the company. And our ARVs have been somewhat astonishing and we see that as we're reaching the top of our merchandise pyramid. So again, we're putting the product where we see a certain customer and we're matching that product to the customer, all the better. And now we're able to manage promotions differently against each of those. In fact, one thing I want to call out, I think the team's done a great job on this is we built an AI engine that basically creates product display pages, PDPs and it will build language that's appropriate to each page. So if you see a product that's on Lands and dot com, how the page materializes by the time you get to Amazon, it will read differently, it will read more appropriate to the Amazon bots and AI search tools and it will read differently and probably more elevated in all candor to a Nordstrom's customer. So we're starting, we're being much more thoughtful about how we address each of these segments in terms of the category conversation that's out there. We've seen strength across all categories. And it was, you know, the second quarter was, was definitely there was momentum all the way through it. Slower May with swim, which is really important to us. It's, you know, it's a third of the business in May. What we saw was that build in June, it built in July and then interestingly it built into August. And what I'm starting to see is that the strategy that the designers and merchants put in place around weatherproofing has been incredible for us because we are able to sell to the customer when they want it, not just where they want it. And so it was something I had not seen in the company's history before over Labor Day weekend where we had both swim and outerwear as top five categories which was new to us and that was relatively full price selling because again we're trying to meet more of the discounting in different channels. It's like having the customer on landsend.com on with something more premium. We were able to manage markdown around that. You asked me about tariffs and are we handing anything on to the customer? I'm going to be honest, yes, we are as little as we possibly can. We look at our tariffs and the view we took for 25 which is in the guidance and into into 26 into is that we're making a number of changes. We've made a number of changes in our sourcing network. They've been very successful for us and they've given us the nimbleness to move in and out of markets as tariffs come. And we've also worked with our vendors and narrowed the number of vendors and that's given us the ability to share some of the tariff burden with them. So we think about them or half of the tariff rise that we're seeing of the remainder. We're splitting that fairly evenly between internal changes that we're making as we get after our get after below margin and then the rest of it is going through to what I would say is a relatively small increase to the customer. And we will endeavor to make that the smallest number it can be. But I don't want to sugarcoat it that we're. That we can absorb the whole thing. So I think I got everything in there. I'm happy to go back to it. If you've got more.

Bernie McCracken - Chief Financial Officer - (00:28:00)

Product categories would be that, you know, one of the exciting things for us is as people are shifting their timing on purchases. Whilst we noted that swim was a little bit later, swim season, it's a little bit of a negative for Q2 but it's actually been a nice tailwind to start Q3 as that swim kicks in. And when Andrew was talking about essentials. It'S a smaller part of our business. But it's been really a big lift in Its early days in both Amazon and the other places that we're putting it.

Dana Telsey - Equity Analyst - (00:28:36)

Thank you.

Andrew McLean - Chief Executive Officer - (00:28:40)

Thank you.

OPERATOR - (00:28:40)

We go next now to Eric Bedder of SCC Research.

Eric Bedder - Analyst - (00:28:46)

Good afternoon, Brad. Hey, Eric, could you talk a little. Bit about the flow of licensing here? I know that the first half had kind of a little bit of puts and takes because you were shifting licensing to. From categories you previously had into a licensing category. What are we going to see in the back half in terms of potentially now becoming expanding the categories beyond what. You'Ve done before with the licensing.

Andrew McLean - Chief Executive Officer - (00:29:20)

Mechanism? Hey, Eric, I'm going to take the. I'm going to take the front half. And then I'll let Bernie take the back half. We're up 36% on our licensing revenues and that's a number you'll see in the queue. But I really wanted to call that out. You know, we continue to look at how we will drive the business forward in the back half with that. I mean, the back half. We think that there is upside to it, you know, because there are new licenses. And then on top of that, you know, we get into the holiday season like we were really still sort of in our infancy last last year on this. So we see tremendous upside, opportunity. And actually, you know, the sky's the limit in terms of the licenses we can go after. We've been a little slower for reasons. For some reasons this year. And I think as we get into the future, we see opportunity to accelerate those number of licenses.

Bernie McCracken - Chief Financial Officer - (00:30:17)

Yeah, and what I would add to that, you know, we started the year, you know, the licensees, you know, started the business in early last year. There's a ramp up for those. So what we're starting to see as. We hit the back half of this. Year is them accelerating. Our current licensees are accelerating to their full potential and we'll get that benefit in the back half of this year while we also have the new licensees starting to build their program and then we'll get the benefit next year of. Them building up to full potential.

Andrew McLean - Chief Executive Officer - (00:30:46)

One of the leverage points that I found really interesting is as we sort of go down this path, and I've done this before in my career, which is to pull the licenses to get the licenses together and go to a big customer, you know, a big department store customer, and really have them all present as a complete house of Lands End. And in doing that, you know, it's very powerful to have that leverage. And it's like we negotiate into that. We see that as an amplification of licenses that wasn't originally anticipated in what we and how we were laying out the business model but is now, you know, it became very obvious as we went further into this. So we see upside here.

Eric Bedder - Analyst - (00:31:35)

Great. When you look at outerwear last year you shifted the continue to shift the outerwear to more wear now and thinner and kind of not as heavy product. And that was a big success. What should we be thinking about how you're going to handle outerwear this year? Obviously it seems like it started out pretty well in Labor Day.

Andrew McLean - Chief Executive Officer - (00:31:54)

Oh, Eric. I was in product meetings all morning and you should see the outerwear that's to come. It's absolutely darling. And actually in as much as I want to give you the full answer and I will, I mean I point you to some of the new products that we have out there around Squall in particular and that will send you the Product Display Page (PDP) of the rain jacket. And it is, you'll see a couple of things. You will see new product, new innovation and you will see new Product Display Page (PDP)s that really speak to how the customer wants to shop. And the Product Display Page (PDP) almost in its own way acts as a landing page for the brand. So there's incredible use of imagery, there's incredible use of storyline in there and actually we lean heavily into customer reviews. And part of why I was loving the product so much this morning is the team were showing me early reviews on it which are many of them are five star and we see it from our resolver and our revolver customer and we know when both of those are loving the product that it's going to be a home run. So I don't think you're necessarily going to see new franchises being added, but I think you'll see those franchises being deep deepened. And I'm not going to give you the whole story. You're going to have to wait to see some of it because we've got some astonishing product coming up.

Eric Bedder - Analyst - (00:33:25)

Great. Last question. So when you look at the catalogs, there's been an increasing focus on events and lifestyle and driving kind of multiple purchases for that. When you look at your customer base, that 35 to 50 year old customer is your focus. I was been their response to that versus kind of the prior core. And are you seeing those customers continue to increase on the price in terms of percentage of buying all pieces? Thank you.

Andrew McLean - Chief Executive Officer - (00:34:01)

Yes, we continue to see the evolve. I think a 35 to 50 year. Old new to file customer is coming is coming to the brand and they are buying across across product categories and buy a bigger basket and it has been an incredibly successful strategy for us to lean into that versus the more traditional resolver customer who tends to come back and buy something that's worn out or to stick with one us in one particular category. They just may be a swim customer and that's who they're going to be. We're starting to see behavior of new cohorts, resolvers with evolver tendencies. And so we are starting to break down that barrier. What we have done with catalogs and in particular as we came into Q3, we were extremely thoughtful about this. We really leaned in with our data scientists and began to be thoughtful about the particular kind of catalog that goes to a five times shopper, which is effectively a resolver for us at this point versus a customer we're trying to encourage to a second purchase because we know recency is very important to us. And actually we began to segment the file more to chase after lapsed customers. We know there's a tremendous amount of value in there. And we've begun actually with the catalog to prospect again. After a number of years of not using the catalog to prospect and relying probably a little too much on performance marketing because I think performance marketing is under pressure in any case from agents. But I think it has a tendency to be more transactional versus emotional. And we find that, you know, we can handle transactional better on say, Amazon. That's a bad. That. That's a better place to be with that kind of. With that kind of customer purchase decision. So for us, the catalog is, I think it's fair to say we've taken the catalog on the offensive this quarter. And I think you're going to see more and more of that from us. And actually you just might get different catalogs sent to you. And I'll give you a very good example. Our traditional customer, that resolver, she likes to see red lines. What do I mean by that? She wants to see a. Was his pricing. Our revolver doesn't want to see that. So you might find that you get a different catalog depending on how we've evaluated you as a customer. We will continue to lean into this. The data science behind this is fascinating and hopefully we can spend some time walking you through it when you visit next.

Eric Bedder - Analyst - (00:36:35)

Okay, good. Look forward to it. Thank you. Thank you.

OPERATOR - (00:36:40)

We'll go next now to Steve Silver of Argus Research.

Steve Silver - Analyst - (00:36:44)

Thanks, operator, and thanks for taking my questions. It's great to hear the progress in the outfitters business. Sounds like there might be some new opportunities to be announced over the course of the rest of the year. Just curious as to your view of the state of the pipeline in outfitters broadly and maybe if you can just put into some context how many prospects may be in more advanced stages of conversation at any point in time. Yeah, thanks. How's it going, Steve? It's nice to hear from you. You as well. So we break it up into. We break out fitters out into several buckets. I'm just going to. I'm just going to start with school. We're very deliberately targeting growth in school. We have found that the product that we bring to market is Okotex certified and that means that there's absolutely nothing bad in it and we find it to be very competitively priced and if something none of our competitors can do, so we have a competitive advantage that we can lean in and go after progressively more schools from large to small. And so we've really tasked our team to grow that business and I would say not just because one of our competitors fell out last year, but because of our own doubling down and having more, having a better go to market strategy. We where we see opportunity to pick up those schools. And I tend to think about adding schools in anywhere from about half a million to $3 million buckets given the size of those. So opportunity in there with multiple customers. I think when it gets into the commercial uniforms business, I'm going to split it in two just to simplify it. Oh, we'll be here all night. I think the smaller customers, we have completely rebuilt our experience for smaller customers and it's paying, starting to pay dividends for us. The site, which in my opinion had become extremely sort of B2C focused and was more category driven, is now about the emphasis of differentiation of what we can bring to your business. And I think the other part is we've done. We changed our IT philosophy to be more, more about sprints rather than sort of like longer projects. And we're delivering continual upgrades and that's allowing us to be much more focused on getting turnaround for the customer in there. I would say that it doesn't stop there because what we tend to find is many big companies who may well become the second group, which is our enterprise accounts tend to start off by shopping as small and so we can use that to prospect quite, quite heavily in terms of the enterprise accounts. I've got so much good news in there, but I'm really not in a position to share it. Obviously on the last call we talked about winning Delta back and we're extremely proud about that. Our team just got back from Italy, where they had been with Delta assessing user forms for the future. And it's. There's a lot of goodness to come from that. I would say that the impact of bringing a Delta back is not lost on other airlines out there. I'm going to leave it at that. And in financial services, we continue to dominate. The big play for us is going to be now building adjacent categories. And one of the adjacent categories we really, really like is in the health care industry. And I think you'll see us start to add that category more consistently and carefully. I just don't want to like blanket everyone everywhere. Lands End does better when it focuses on something and decides to win. And that's how we work as a team. That's helpful. Thank you so much. And one last one, if I may. You cited some progress in Europe with the narrowing of the declines there, also the implementation of new websites in some key European markets. I'm curious if you could put some context around the expectations for completing the turnaround of the European business and moving just towards something of more of a contribution to the overall business. Yeah, that's a great question. You know, usually I'm in Europe testing out ideas, good, bad or indifferent. One idea that we're taking from the US that's really important to us is this distributed commerce model. So, you know, just so we're on the same page, I mean, it really allows the customer to purchase directly from where they're browsing. So we're meeting customers where they are rather than waiting for them to come to the brand site. So that might be social media, it might be from online articles, it could be from smart devices and it could be from marketplaces. And so we are working our way into social media, we're working our way into marketplaces. And I think I want to put emphasis on the marketplaces because Europe's retail has always been more marketplace driven than in North America. I that's an area of growth for us. So we opened next, we opened Debenhams, we opened Amazon, and we've seen terrific starts to each of those. I think you'll see us continue to grow those. And take from the strategy that's been already really successful in the U.S. i think that's focusing around product that's appropriate to that channel and product that is, that is priced appropriately and narrow assortments that then encourage you to be curious about coming back to see either landsat.co.uk or the German site or actually the French site. So that's the first part of it in terms of the brand sites themselves. The UK is in pretty good shape. I think we turned the corner there. We understood the UK consumer and we've made inroads with them. I think we've got the product assortment right. Right now the area we're working on, and again, it was a meeting I was in earlier today is to get focused around our German resolver customer, the evolver customer we've got nailed. It's about now working on the resolver customer and that arguably is going to come through catalog. So we're spending time working out, taking this, taking, excuse the pun, a pager of what we've done in the US and then working at how we can use the catalog as an effective tool to engage with that resolver German customer. And then that will bring us fully back to where the brand is contributing from Europe because again, I'm absolutely committed to it because the halo that we.

Andrew McLean - Chief Executive Officer - (00:43:55)

Will get from Europe is key. And the last point I will make on this particularly to reach our revolver customers, watch for a couple of really powerful collapse coming. The collab model that we've had from that really this is the success of the tote bag in the US has created a halo for the brand everywhere. We're taking that, we're taking that on the road and we're now going to be doing that in Europe. And again, I would love to, I would love to share who those collabs are for, but I think my team in Europe would be be really, really upset with me. So I'm going to stay quiet and watch this space.

Steve Silver - Analyst - (00:44:36)

Great. Thank you so much for the color and best of luck in the second half. Thank you.

Andrew McLean - Chief Executive Officer - (00:44:41)

Take care. Thank you.

OPERATOR - (00:44:44)

And gentlemen, that was our final question for the today. So that will bring us to the conclusion of today's lands and earnings conference call. Again, everyone, we'd like to thank you all so much for joining us this afternoon and wish you all a great remainder of your day. Goodbye.