Financial Data and Key Metrics Changes - In Q2 2025, net revenue was approximately $81.5 million, a decrease of 11% year over year, driven by a 16% decrease in total orders placed, partially offset by a 1% increase in average order value [26] - Adjusted EBITDA for Q2 was approximately $500,000 compared to a loss of $200,000 in Q2 2024, with an adjusted EBITDA margin of 0.6% versus negative 0.2% in the prior year period [27] - The net loss for Q2 improved to $3 million from $10.8 million in the same period last year [27] - Free cash flow during Q2 was negative $1.9 million, reflecting a $4.9 million decrease year over year [28] - Net debt was $4.2 million at the end of Q2, a reduction from $8.6 million at the end of Q4 2024 [28] Business Line Data and Key Metrics Changes - Special occasion and bridesmaids categories were key growth drivers, while casualwear and footwear businesses continued to show softness [6][8] - Product margins improved for the third consecutive quarter, increasing by roughly 170 basis points compared to the prior year period [11] - Gross margin for the quarter was 45.3%, down 20 basis points year over year, but expanded sequentially from 40.3% in Q1 2025 [26] Market Data and Key Metrics Changes - Active customers were lower year over year, but the Love Rewards loyalty program membership saw double-digit growth, driving an overall increase in total membership [19] - Improved average order values in Q2 contributed to continued comp improvements through May [19] Company Strategy and Development Direction - The company is focused on executing strategic priorities to drive cost efficiency, optimize for long-term growth, and expand customer reach [9] - Ongoing refinements to the reorder funnel and merchandising strategy are aimed at aligning offerings with core brand identity and occasion wear [13] - The company is actively negotiating a new asset-based revolving credit facility to strengthen liquidity [29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth potential in wholesale and expects strong growth in this business throughout 2025 and beyond [12] - The company remains committed to maintaining positive year-to-date cash flow and investing in long-term objectives despite macroeconomic challenges [17] - Management highlighted the positive outcomes of cost management and overall business strategy amid a dynamic macroeconomic environment [31] Other Important Information - The company implemented targeted cost savings initiatives, resulting in a 15% year-over-year decline in operating expenses [14] - The transition of the CFO role is ongoing, with the current CEO serving as interim CFO while a search for a new finance leader is conducted [17] Q&A Session Summary Question: What are the expectations for the third quarter? - The company expects to generate positive adjusted EBITDA in Q3 and is confident in strengthening its liquidity position while focusing on business success [29] Question: How is the company addressing challenges in the casualwear and footwear segments? - The company is refining its merchandising strategy and has seen early signs of improvement in these categories [13] Question: What is the status of the company's credit facility negotiations? - The company is actively negotiating a new asset-based revolving credit facility and will provide updates as appropriate [9]

Core Insights - Lulu's Fashion Lounge Holdings, Inc. reported a net revenue of $81.5 million for Q2 2025, an 11% decrease year-over-year, attributed to a 16% decline in total orders placed, partially offset by a 1% increase in average order value [8][11] - The company achieved positive Adjusted EBITDA of $0.5 million, compared to a loss of $0.2 million in the same period last year, indicating improved operational efficiency [8][30] - Lulu's continues to focus on strategic initiatives to enhance cost efficiency and expand its customer base, particularly in the occasion dress segment, while repositioning its casual wear and footwear offerings [2][3] Financial Performance - Net loss for Q2 2025 was $3.0 million, a significant improvement from a net loss of $10.8 million in Q2 2024 [8][11] - Gross profit decreased by 12% to $36.9 million, with a gross margin of 45.3%, down 20 basis points from the previous year [8][30] - Active customers decreased by 8% to 2.5 million compared to 2.7 million in the same period last year [8][30] Debt and Liquidity - Total debt decreased by $4.3 million to $5.8 million, while net debt increased by $2.7 million to $4.2 million during the quarter [8][30] - The company is negotiating a new asset-based revolving credit facility to strengthen its liquidity position [3][6] Future Outlook - Lulu's expects to achieve positive Adjusted EBITDA in Q3 2025 and projects full-year capital expenditures to be approximately $2.5 million [9][10] - The company remains optimistic about its strategic initiatives and the potential for improved financial performance in the upcoming quarters [3][9]

[Management Commentary and Business Highlights](index=1&type=section&id=Management%20Commentary%20and%20Business%20Highlights) Management noted sequential improvement in net revenue, driven by occasion and bridesmaid dresses, while casual wear and footwear remained soft; the company achieved positive Adjusted EBITDA, reduced debt, and is negotiating a new credit facility - The company saw sequential improvement in revenue trends and strength in occasion dresses, but faced softness in casual wear and footwear[3](index=3&type=chunk) - Lulus achieved **positive Adjusted EBITDA**, reduced total debt, and expects continued positive Adjusted EBITDA in Q3 2025[4](index=4&type=chunk) - The company is actively repositioning its casual wear and footwear categories to better align with its core strengths in event attire[3](index=3&type=chunk) - An amendment to the Forbearance Agreement with Bank of America was executed, extending the Forbearance Termination Event and Maturity Date to August 22, 2025, as the company negotiates a new asset-based revolving credit facility[7](index=7&type=chunk) [Q2 2025 Financial & Operational Performance](index=1&type=section&id=Q2%202025%20Financial%20%26%20Operational%20Performance) In Q2 2025, Lulus reported an **11% decrease in net revenue to $81.5 million**, driven by a 16% drop in total orders, though Average Order Value increased slightly; the company significantly narrowed its net loss to $3.0 million and achieved positive Adjusted EBITDA of $0.5 million [Key Financial & Operating Metrics](index=1&type=section&id=Key%20Financial%20%26%20Operating%20Metrics) Key metrics for Q2 2025 showed a year-over-year decline in revenue and active customers, but an improvement in net loss and a shift to positive Adjusted EBITDA, with Average Order Value slightly increasing Second Quarter 2025 Financial Highlights (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Revenue | $81.5M | $92.0M | -11% | | Gross Profit | $36.9M | $41.9M | -12% | | Gross Margin | 45.3% | 45.5% | -20 bps | | Net Loss | ($3.0M) | ($10.8M) | Improved | | Adjusted EBITDA* | $0.5M | ($0.2M) | Improved | | Active Customers | 2.5M | 2.7M | -8% | | Average Order Value | $145 | $143 | +1% | | Free Cash Flow* | ($1.9M) | $3.0M | Decreased | [Condensed Consolidated Statements of Operations](index=2&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, net revenue decreased to $81.5 million, gross profit declined, but loss from operations improved, and net loss significantly reduced to ($3.0) million Statement of Operations Summary (Thirteen Weeks Ended, in millions) | Account | June 29, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Net revenue | $81.52M | $91.97M | | Gross profit | $36.93M | $41.88M | | Loss from operations | ($2.62M) | ($4.47M) | | Net loss | ($3.00M) | ($10.80M) | | Diluted loss per share | ($1.08) | ($3.92) | [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 29, 2025, total assets decreased to $101.0 million, cash and equivalents declined, total liabilities increased, and total stockholders' equity significantly decreased to $4.3 million Balance Sheet Summary (in millions) | Account | June 29, 2025 | December 29, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1.53M | $4.46M | | Inventory, net | $37.35M | $34.04M | | Total assets | $100.96M | $108.20M | | Revolving line of credit | $5.75M | $13.09M | | Total liabilities | $96.71M | $94.83M | | Total stockholders' equity | $4.25M | $13.37M | [Condensed Consolidated Statements of Cash Flows](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the twenty-six weeks ended June 29, 2025, net cash provided by operating activities decreased to $7.0 million, while net cash used in financing activities was $8.8 million, primarily due to debt repayments Cash Flow Summary (Twenty-Six Weeks Ended, in millions) | Category | June 29, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $6.97M | $10.64M | | Net cash used in investing activities | ($1.05M) | ($1.62M) | | Net cash used in financing activities | ($8.84M) | ($9.74M) | | Net decrease in cash and cash equivalents | ($2.93M) | ($0.73M) | [Financial Outlook](index=2&type=section&id=Financial%20Outlook) Lulus updated its financial outlook, expecting positive Adjusted EBITDA in Q3 2025 and forecasting full-year 2025 capital expenditures at approximately $2.5 million - The company expects to generate **positive Adjusted EBITDA** in the third quarter of 2025[12](index=12&type=chunk) - Full-year 2025 capital expenditures are now expected to be approximately **$2.5 million**, which is at the low end of the previously guided range of $2.5 million to $3.0 million[12](index=12&type=chunk) [Non-GAAP Financial Measures & Reconciliations](index=5&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) The company utilizes non-GAAP measures like Adjusted EBITDA, Net Debt, and Free Cash Flow for performance evaluation, with Q2 2025 Adjusted EBITDA at $0.5 million, Net Debt at $4.2 million, and Free Cash Flow at ($1.9) million [Definitions of Key Metrics](index=5&type=section&id=Definitions%20of%20Key%20Metrics) The report defines key non-GAAP measures and operating metrics used for performance evaluation, including Adjusted EBITDA, Active Customers, Free Cash Flow, and Net Debt - Adjusted EBITDA is defined as net loss before interest expense, income taxes, depreciation and amortization, adjusted for equity-based compensation and other non-routine expenses[20](index=20&type=chunk) - Active Customers are defined as the number of customers who made at least one purchase in the prior 12-month period[23](index=23&type=chunk) - Free Cash Flow is defined as net cash provided by operating activities less cash used for capitalized software development costs and purchases of property and equipment[25](index=25&type=chunk) - Net Debt is defined as total debt (revolving line of credit) less cash and cash equivalents[27](index=27&type=chunk) [Reconciliation of Non-GAAP Measures](index=7&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) Detailed reconciliations for non-GAAP measures show Q2 2025 Adjusted EBITDA at $0.5 million, Free Cash Flow at ($1.9) million, and Net Debt at ($4.2) million Reconciliation of Net Loss to Adjusted EBITDA (Thirteen Weeks Ended, in millions) | Account | June 29, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Net loss | ($3.00M) | ($10.80M) | | Depreciation and amortization | $1.37M | $1.28M | | Interest expense | $0.86M | $0.27M | | Income tax provision (benefit) | $0.06M | $6.33M | | Equity-based compensation expense | $1.28M | $2.19M | | Other non-routine expense | $0.00M | $0.42M | | **Adjusted EBITDA** | **$0.48M** | **($0.21M)** | Reconciliation of Free Cash Flow (Thirteen Weeks Ended, in millions) | Category | June 29, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($1.36M) | $3.69M | | Capitalized software development costs | ($0.38M) | ($0.34M) | | Purchases of property and equipment | ($0.14M) | ($0.32M) | | **Free Cash Flow** | **($1.88M)** | **$3.03M** | Reconciliation of Net Debt (in millions) | Account | June 29, 2025 | December 29, 2024 | | :--- | :--- | :--- | | Total debt | ($5.75M) | ($13.09M) | | Cash and cash equivalents | $1.53M | $4.46M | | **Net Debt** | **($4.22M)** | **($8.63M)** |

PART I FINANCIAL INFORMATION [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Presents Lulu's unaudited condensed consolidated financial statements, reflecting net losses and liquidity challenges [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows decreased total assets and stockholders' equity, with slightly increased liabilities, driven by accumulated deficits Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 29, 2025 | December 29, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $51,596 | $51,501 | | **Total Assets** | $100,960 | $108,198 | | **Total Current Liabilities** | $82,729 | $74,325 | | **Total Liabilities** | $96,707 | $94,830 | | **Total Stockholders' Equity** | $4,253 | $13,368 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The statements show a net loss of $3.0 million for the thirteen weeks and $11.0 million for the twenty-six weeks ended June 29, 2025 Statement of Operations Summary (in thousands) | Metric | Thirteen Weeks Ended June 29, 2025 | Thirteen Weeks Ended June 30, 2024 | Twenty-Six Weeks Ended June 29, 2025 | Twenty-Six Weeks Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net revenue | $81,520 | $91,966 | $145,675 | $169,225 | | Gross profit | $36,932 | $41,883 | $62,773 | $74,529 | | Loss from operations | $(2,623) | $(4,467) | $(10,741) | $(10,625) | | Net loss | $(2,995) | $(10,796) | $(10,993) | $(16,532) | | Diluted loss per share | $(3.92) | $(3.94) | $(6.02) | $(1.08) | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity declined from $13.4 million to $4.3 million, primarily due to a net loss and common stock repurchases - For the twenty-six weeks ended June 29, 2025, total stockholders' equity decreased by **$9.1 million**, from **$13.4 million** to **$4.3 million**[27](index=27&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities was $7.0 million, leading to a $2.9 million decrease in cash and cash equivalents to $1.5 million Cash Flow Summary (in thousands) | Cash Flow Activity | Twenty-Six Weeks Ended June 29, 2025 | Twenty-Six Weeks Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $6,966 | $10,637 | | Net cash used in investing activities | $(1,053) | $(1,623) | | Net cash used in financing activities | $(8,839) | $(9,739) | | **Net decrease in cash** | **$(2,926)** | **$(725)** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail liquidity issues, going concern uncertainty, significant accounting policies, and the amended credit facility - The company incurred net losses of **$3.0 million** and **$11.0 million** for the thirteen and twenty-six weeks ended June 29, 2025, respectively, and had only **$1.5 million** in cash and cash equivalents at period end[38](index=38&type=chunk) - Management's plans to seek alternative debt financing do not alleviate substantial doubt about the Company's ability to continue as a going concern, as the ability to raise financing is outside of management's control[39](index=39&type=chunk) - A **1-for-15 reverse stock split** of the company's common stock became effective on July 7, 2025. All share and per-share amounts in the financial statements have been retroactively adjusted[62](index=62&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, revenue decline, corporate actions, and significant liquidity challenges raising substantial doubt about going concern [Recent Developments and Liquidity](index=40&type=section&id=Recent%20Developments%20and%20Liquidity) Recent developments include a CFO change, a reverse stock split for Nasdaq compliance, and severe liquidity constraints raising going concern doubt - CFO Tiffany R. Smith resigned effective **June 30, 2025**, with CEO Crystal Landsem appointed as Interim CFO[139](index=139&type=chunk) - A **1-for-15 reverse stock split** was effective **July 7, 2025**, which helped the company regain compliance with Nasdaq's minimum bid price requirement[141](index=141&type=chunk)[143](index=143&type=chunk) - The company is actively seeking alternative debt financing, but its ability to secure it is uncertain, leading to substantial doubt about its ability to continue as a going concern[149](index=149&type=chunk) [Key Operating and Financial Metrics](index=44&type=section&id=Key%20Operating%20and%20Financial%20Metrics) Key metrics for Q2 2025 include a 45.3% Gross Margin, positive Adjusted EBITDA, and a decline in Active Customers Key Metrics Comparison (Q2 2025 vs Q2 2024) | Metric | Thirteen Weeks Ended June 29, 2025 | Thirteen Weeks Ended June 30, 2024 | | :--- | :--- | :--- | | Gross Margin | 45.3% | 45.5% | | Net loss | $(2,995) thousand | $(10,796) thousand | | Adjusted EBITDA | $482 thousand | $(207) thousand | | Active Customers | 2,460 thousand | 2,670 thousand | | Average Order Value | $145 | $143 | [Results of Operations](index=53&type=section&id=Results%20of%20Operations) Q2 2025 net revenue fell 11% due to decreased orders, but cost management reduced expenses, leading to a reduced net loss - Net revenue for Q2 2025 decreased by **$10.4 million (11%)** compared to Q2 2024, driven by a **16% decrease** in Total Orders Placed[180](index=180&type=chunk) - Selling and marketing expenses decreased by **$2.9 million (12%)** in Q2 2025 due to lower online marketing costs[183](index=183&type=chunk) - General and administrative expenses decreased by **$3.9 million (18%)** in Q2 2025, primarily due to reduced headcount, lower equity-based compensation, and decreased D&O insurance costs[184](index=184&type=chunk) [Liquidity and Capital Resources](index=58&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is severely constrained, relying on cash from operations with no further borrowing capacity under the amended credit facility maturing August 22, 2025 - The company has no further access to borrowings under its **2021 Credit Agreement** and is reliant on cash from operations[200](index=200&type=chunk)[206](index=206&type=chunk) - The company entered into a **Forbearance Agreement** on **June 23, 2025**, due to defaults on refinancing milestones. The agreement and the credit facility's maturity date were subsequently extended to **August 22, 2025**[207](index=207&type=chunk)[210](index=210&type=chunk)[211](index=211&type=chunk) - As of **June 29, 2025**, the company had **$1.5 million** in cash and cash equivalents and **$5.8 million** outstanding on its credit facility[209](index=209&type=chunk)[212](index=212&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=66&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risk exposure have occurred since the disclosures in the 2024 Annual Report on Form 10-K - There has been no material change in the company's exposure to market risk from that discussed in the **2024 10-K**[229](index=229&type=chunk) [Controls and Procedures](index=66&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - Management concluded that as of **June 29, 2025**, the company's disclosure controls and procedures were effective[231](index=231&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[232](index=232&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=68&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings expected to have a material adverse effect on its business or financial condition - The company is not presently a party to any legal proceedings that are expected to have a material adverse effect on its business[234](index=234&type=chunk) [Risk Factors](index=68&type=section&id=Item%201A.%20Risk%20Factors) Critical risks include the potential inability to refinance the 2021 Credit Agreement before maturity and the ongoing risk of Nasdaq delisting - The company may not be able to refinance its **2021 Credit Agreement** before its maturity on **August 22, 2025**. Failure to do so would result in an event of default, allowing lenders to declare all outstanding amounts immediately due and payable[236](index=236&type=chunk) - Despite recently regaining compliance, the company must continue to meet **Nasdaq Capital Market's** listing requirements to avoid the risk of delisting, which could negatively affect its stock price and ability to raise capital[238](index=238&type=chunk)[241](index=241&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=70&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's common stock repurchases during Q2 2025 under its publicly announced stock repurchase program Common Stock Repurchases (Q2 2025) | Period | Total Shares Purchased | Weighted-Average Price Paid Per Share | | :--- | :--- | :--- | | March 31 - May 4, 2025 | 42,943 | $7.00 | | May 5 - June 1, 2025 | 15,431 | $6.59 | | June 2 - June 29, 2025 | 14,959 | $6.75 | [Other Information](index=70&type=section&id=Item%205.%20Other%20Information) The company amended its Forbearance Agreement, extending the 2021 Credit Agreement maturity to August 22, 2025, with no Rule 10b5-1 trading plan changes - On **August 11, 2025**, the company amended its **Forbearance Agreement** and **2021 Credit Agreement**, extending the maturity date from **August 15, 2025**, to **August 22, 2025**[246](index=246&type=chunk) - During the thirteen weeks ended **June 29, 2025**, none of the company's directors or officers adopted, modified, or terminated a **Rule 10b5-1** trading arrangement[247](index=247&type=chunk) [Exhibits](index=72&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate amendments, the Forbearance Agreement, officer certifications, and XBRL data

Company Announcement - Lulu's Fashion Lounge Holdings, Inc. will release its second quarter 2025 financial results on August 13, 2025, after market close [1] - A conference call and live webcast will be held at 5:00 p.m. Eastern Time on the same day for the investment community [1] Access Information - Financial results and the live webcast will be accessible through the Investor Relations section of the Company's website [2] - To access the conference call, U.S. callers can dial 1-877-407-0792, while international callers can use 1-201-689-8263 [2] Replay Details - A replay of the conference call will be available shortly after the call for seven days [3] - U.S. callers can access the replay by dialing 1-844-512-2921, and international callers can use 1-412-317-6671 with access code 13754162 [3] Company Overview - Lulus is an attainable luxury fashion brand for women, headquartered in California, serving millions of customers worldwide [4] - The brand focuses on modern, feminine designs at accessible prices for various occasions, aiming to make every woman feel confident [4] - Founded in 1996, Lulus utilizes direct consumer feedback to refine product offerings and enhance customer experience [4]

Core Points - Lulu's Fashion Lounge Holdings, Inc. has regained compliance with Nasdaq's minimum bid price requirement for continued listing on The Nasdaq Capital Market [1][2] - The company met the requirement by maintaining a minimum closing bid price of $1.00 or more for at least 10 consecutive business days, achieving this on July 18, 2025 [2] Company Overview - Lulus is a California-based attainable luxury fashion brand for women, offering modern and feminine designs at accessible prices for various occasions [3] - Founded in 1996, Lulus focuses on delivering fresh styles daily, utilizing direct consumer feedback to enhance product offerings and customer experience [3] - The company emphasizes exceptional customer service through its personal stylists, bridal concierge, and customer care team [3]

Core Points - The company announced a 1-for-15 reverse stock split effective July 3, 2025, to comply with Nasdaq's minimum bid price requirement [1][2] - The reverse stock split will reduce the number of outstanding shares from approximately 41,492,767 to about 2,766,185 shares [4] - The company entered into a Forbearance Agreement with Bank of America on June 23, 2025, providing additional time to pursue alternative debt financing options [5] Reverse Stock Split Details - The reverse stock split will combine every fifteen shares into one share without changing the par value [3] - No fractional shares will be issued; stockholders will receive whole shares rounded up [3] - The authorized shares will remain unchanged at 250,000,000 shares [4] Forbearance Agreement Insights - The Forbearance Agreement will expire upon the occurrence of certain events, including any Event of Default or breach of the agreement [5] - The company has received two bona fide term sheets from reputable financial institutions for a potential refinancing transaction [5]

Group 1 - Lulu's Fashion Lounge Holdings, Inc. has received approval to transfer its common stock listing from the Nasdaq Global Market to the Nasdaq Capital Market effective June 10, 2025 [1][2] - The company's stock will continue to trade under the symbol "LVLU" after the transfer [2] - The Nasdaq Capital Market operates similarly to the Nasdaq Global Market, requiring listed companies to meet specific financial and corporate governance standards [2] Group 2 - Lulus is an attainable luxury fashion brand for women, offering modern and feminine designs at accessible prices [3] - The company aims to make every woman feel confident and celebrated, catering to various occasions from work to weddings [3] - Founded in 1996, Lulus utilizes direct consumer feedback to refine its product offerings and enhance customer experience [3]

Group 1 - Lulu's Fashion Lounge Holdings, Inc. announced the resignation of CFO Tiffany R. Smith effective June 30, 2025, due to personal family-related matters [1] - The transition is not related to any disagreements regarding the company's financial reporting, accounting practices, or internal controls [1] - Crystal Landsem, the CEO, will take on the role of Interim CFO while the Board of Directors searches for a permanent successor [1] Group 2 - Tiffany R. Smith has been with Lulus for four years, and the CEO expressed gratitude for her contributions [2] - Lulus is positioned as an attainable luxury fashion brand for women, offering modern designs at accessible prices [2] - The company aims to enhance customer experience through direct consumer feedback and insights, along with a commitment to exceptional customer service [2]

Financial Data and Key Metrics Changes - In Q1, net revenue was approximately $64.2 million, a decrease of 17% year over year, driven by a 17% decrease in total orders placed and a 5% decrease in average order value [24] - Gross margin for the quarter was 40.3%, down 200 basis points compared to the prior year, while product margin improved by 100 basis points [24] - The net loss for Q1 worsened to $8 million from $5.7 million in the same period last year, with adjusted EBITDA loss at approximately $4.7 million compared to a $2.7 million loss in Q1 2024 [25][26] - Free cash flow during Q1 was $7.8 million, reflecting a $1.8 million increase year over year, and net debt was reduced to $1.5 million, a $7.2 million reduction from the previous quarter [28] Business Line Data and Key Metrics Changes - The Special Occasion and Bridesmaids categories continued to drive healthy year-over-year net sales growth, while casualwear and footwear remained under pressure [7] - Wholesale revenue had triple-digit year-over-year growth, driven by growth among major partners and strong momentum in specialty retail [10] - Inventory management resulted in a 4% year-over-year inventory reduction, with product margins increasing sequentially for the second consecutive quarter [8][9] Market Data and Key Metrics Changes - Active customers increased quarter over quarter despite a year-over-year decline, reflecting the success of recent brand efforts [16] - The Love Rewards loyalty program membership continued to see double-digit growth, contributing to an overall increase in total membership [16] Company Strategy and Development Direction - The company is focused on strengthening its financial foundation, optimizing its business, and broadening its customer base through strategic initiatives [8] - A key focus area is SKU management, shifting towards deeper buys on a narrower, more curated SKU set supported by data insights [13] - The company is committed to maintaining positive cash flow and investing in long-term objectives to support a return to growth [31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain macroeconomic environment and potential unstable consumer sentiment due to international trade policies and tariffs [13] - The company expects to generate positive adjusted EBITDA in Q2 and is committed to strengthening its liquidity position [30] - Despite macro headwinds, management remains confident in their strategies for sustainable growth and margin improvement [31] Other Important Information - The company executed a fourth amendment to its credit agreement, suspending the measurement of certain financial covenants for Q1 while pursuing alternative financing [28] - The recent pause on U.S.-China reciprocal tariffs has not changed the company's conviction around supply chain diversification and direct sourcing strategies [15] Q&A Session Summary Question: No questions were asked during the Q&A session - There were no questions at this time, and the conference call concluded [33]