Revenue

6 Months Ended

Jul. 28, 2023

Revenue from Contract with Customer [Abstract]

Revenue

NOTE 14. REVENUE

Revenue includes sales of merchandise and delivery revenue related to merchandise sold. Substantially all of the Company’s revenue is recognized when control of product passes to customers, which for the U.S. eCommerce, International, Outfitters and Third Party distribution channels is when the merchandise is received by the customer and for the Retail distribution channel is at the time of sale in the store. The Company recognizes revenue, including shipping and handling fees billed to customers, in the amount expected to be received when control of the Company’s products transfers to customers, and is presented net of various forms of promotions, which range from contractually fixed percentage price reductions to sales returns, discounts, and other incentives that may vary in amount. Variable amounts are estimated based on an analysis of historical experience and adjusted as better estimates become available.

The Company’s revenue is disaggregated by distribution channel and geographic location. Revenue by distribution channel is presented in Note 13, Segment Reporting. Revenue by geographic location was:

	13 Weeks Ended				26 Weeks Ended
(in thousands)	July 28, 2023		July 29, 2022		July 28, 2023		July 29, 2022
Net revenue:
United States	$	296,653	$	310,151	$	577,057	$	565,425
Europe		23,305		29,311		49,182		65,440
Asia (1)		129		7,742		286		16,439
Other		3,276		3,974		6,396		7,539
Total Net revenue	$	323,363	$	351,178	$	632,921	$	654,843

(1)The 13 weeks and 26 weeks ended July 29, 2022 includes Net revenue of $7.6 million and $16.1 million, respectively, from the Japan eCommerce distribution channel. See Note 9, Lands’ End Japan Closing.

Contract Liabilities

Contract liabilities consist of payments received in advance of the transfer of control to the customer. As products are delivered and control transfers, the Company recognizes the deferred revenue in Net revenue in the Condensed Consolidated Statements of Operations. The following table summarizes the deferred revenue associated with payments received in advance of the transfer of control to the customer, which is reported in Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets, as

well as amounts recognized through Net revenue for each period presented. The majority of deferred revenue as of July 28, 2023 is expected to be recognized in Net revenue in the fiscal quarter ending October 27, 2023, as products are delivered to customers.

	13 Weeks Ended						26 Weeks Ended
(in thousands)	July 28, 2023			July 29, 2022			July 28, 2023			July 29, 2022
Deferred revenue beginning of period	$	6,019		$	6,074		$	7,484		$	8,560
Deferred revenue recognized in period		(5,805	)		(5,860	)		(7,270	)		(8,346	)
Revenue deferred in period		7,867			9,543			7,867			9,543
Deferred revenue end of period	$	8,081		$	9,757		$	8,081		$	9,757

Revenue from gift cards is recognized (i) when the gift card is redeemed by the customer for merchandise, or (ii) as gift card breakage, an estimate of gift cards which will not be redeemed where the Company does not have a legal obligation to remit the value of the unredeemed gift cards to the relevant jurisdictions. Gift card breakage is recorded within Net revenue in the Condensed Consolidated Statements of Operations. Prior to their redemption, gift cards are recorded as a liability and included within Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets. The liability is estimated based on expected breakage that considers historical patterns of redemption. The following table provides the reconciliation of the contract liability related to gift cards:

	13 Weeks Ended						26 Weeks Ended
(in thousands)	July 28, 2023			July 29, 2022			July 28, 2023			July 29, 2022
Balance as of beginning of period	$	34,222		$	32,015		$	33,029		$	33,070
Gift cards sold		13,171			17,042			28,786			31,670
Gift cards redeemed		(13,048	)		(17,245	)		(26,682	)		(32,713	)
Gift card breakage		(789	)		(368	)		(1,577	)		(583	)
Balance as of end of period	$	33,556		$	31,444		$	33,556		$	31,444

Refund Liabilities

Refund liabilities, primarily associated with product sales returns and retrospective volume rebates, represent variable consideration and are estimated and recorded as a reduction to Net revenue based on historical experience. As of July 28, 2023, July 29, 2022 and January 27, 2023, $18.4 million, $19.9 million and $25.0 million, respectively, of refund liabilities, primarily associated with product returns, were reported in Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets. An asset for product returns is recorded in Prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets.