Significant Sequential Quarterly Net Revenue Comp Improvement with Q3 Reaching Negative Low Single Digits Updated Outlook for Q4 and Fiscal Year 2024 CHICO, Calif., Nov. 13, 2024 (GLOBE NEWSWIRE) -- Lulu’s Fashion Lounge Holdings, Inc. (“Lulus” or the “Company”) (Nasdaq: LVLU) today reported financial results for the third quarter ended September 29, 2024. Crystal Landsem, CEO of Lulus, said: “Third quarter net revenue came in ahead of our outlook, driven by record growth in special occasion and bridesmaid ...

Financial Performance - Third quarter 2024 net revenue was $80.5 million, a decrease of 3% from $83.1 million in the same period last year, driven by a 3% decrease in total orders placed and a 2% decrease in average order value from $133 to $131 [4]. - Gross profit decreased by 9% to $30.6 million, with gross margin declining by 220 basis points to 38.1% compared to the same period last year [4]. - The company reported a net loss of $6.9 million, compared to a net loss of $3.9 million in the same period last year [4]. - Fourth quarter 2024 net revenue is expected to be between $67.5 million and $70.0 million, down from $75 million in the same period last year [6]. - Full year 2024 net revenue is projected to be between $317.5 million and $320 million, compared to $355.2 million in fiscal year 2023 [6]. - For the thirty-nine weeks ended September 29, 2024, the net loss was $23,411,000 compared to a net loss of $12,104,000 for the same period in 2023, representing a 93.5% increase in losses [14]. - Adjusted EBITDA for the thirty-nine weeks ended September 29, 2024, was $(6,438,000), a decrease from $5,207,000 for the same period in 2023, indicating a significant decline in operational performance [28]. - The gross margin for the thirty-nine weeks ended September 29, 2024, was 38.1%, down from 42.4% for the same period in 2023, reflecting a decrease of 4.3 percentage points [28]. - Net loss for the thirteen weeks ended September 29, 2024, was $(6,879) thousand, compared to $(3,889) thousand for the same period in 2023 [30]. - Adjusted EBITDA for the thirteen weeks ended September 29, 2024, was $(3,572) thousand, a decrease from $972 thousand in the prior year [30]. - Free Cash Flow for the thirteen weeks ended September 29, 2024, was $(6,296) thousand, significantly lower than $11,558 thousand in the same period last year [32]. - Net loss margin for the thirteen weeks ended September 29, 2024, was (8.5)%, compared to (4.7)% in the prior year [30]. - Adjusted EBITDA margin for the thirteen weeks ended September 29, 2024, was (4.4)%, down from 1.2% in the same period last year [30]. Customer Metrics - Active customers decreased by 10% to 2.7 million compared to 3.0 million in the same period last year, remaining flat compared to the second quarter of 2024 [4]. - Active customers decreased to 2,670 for the thirty-nine weeks ended September 29, 2024, down from 2,960 in the same period of 2023, indicating a decline in customer engagement [28]. - Average Order Value (AOV) for the thirty-nine weeks ended September 29, 2024, was $131, slightly down from $133 in the same period of 2023 [28]. Cash Flow and Debt - Free cash flow for the third quarter was ($6.3) million, compared to $11.6 million in the same period last year [4]. - Net cash provided by operating activities was $5,133,000 for the thirty-nine weeks ended October 1, 2023, compared to a net cash provided of $21,100,000 in the previous year, showing a decrease of 75.7% [14]. - The total debt as of September 29, 2024, was $11,500,000, with net cash (debt) of $(5,192,000) after accounting for cash and cash equivalents of $6,308,000 [29]. - Net cash used in operating activities for the thirteen weeks ended September 29, 2024, was $(5,504) thousand, compared to $12,749 thousand for the same period in 2023 [32]. Strategic Focus - The company is focusing on generating additional liquidity and maintaining healthy inventory turns amid ongoing macroeconomic uncertainties [5]. - The company plans to focus on growth opportunities and cost-reduction measures in the upcoming quarters, as indicated in their forward-looking statements [17]. - The company aims to enhance its product offerings and customer experience through direct consumer feedback and insights, which is a key part of its strategy moving forward [16]. Capital Expenditure - The full-year 2024 capital expenditure plan has been reduced to approximately $3.2 million, a decrease of $0.3 million from the previous estimate [6]. - Capitalized software development costs for the thirteen weeks ended September 29, 2024, were $(406) thousand, compared to $(524) thousand in the prior year [32]. - Purchases of property and equipment for the thirteen weeks ended September 29, 2024, were $(386) thousand, down from $(667) thousand in the same period last year [32]. - The company reported an equity-based compensation expense of $2,022 thousand for the thirteen weeks ended September 29, 2024, compared to $4,337 thousand in the prior year [30].

Financial Performance - Total net revenue for the thirteen weeks ended September 29, 2024, was $83,118 thousand, a decrease from $280,216 thousand for the thirty-nine weeks ended October 1, 2023, representing a decline of approximately 70.3%[17] - Gross profit for the thirteen weeks ended September 29, 2024, was $33,525 thousand, compared to $118,882 thousand for the thirty-nine weeks ended October 1, 2023, indicating a decrease of about 71.8%[17] - The company reported a net loss of $3,889 thousand for the thirteen weeks ended September 29, 2024, compared to a net loss of $12,104 thousand for the thirty-nine weeks ended October 1, 2023, reflecting an improvement in loss[17] - For the thirty-nine weeks ended September 29, 2024, the company incurred a net loss of $23.4 million, compared to a net loss of $12.1 million for the same period in 2023[21] - The company reported a basic net loss per share attributable to common stockholders, with no potentially dilutive securities impacting diluted loss per share due to net losses for all periods presented[48] - The company reported a pre-tax loss of $6.868 million for the thirteen weeks ended September 29, 2024, compared to a loss of $5.047 million for the same period in the previous year[102] - The net loss for the thirteen weeks ended September 29, 2024 was $(6,879) thousand, compared to $(3,889) thousand for the same period in 2023, reflecting an increase in losses of approximately 76.5%[151] - The company incurred a net loss of $23.4 million for the thirty-nine weeks ended September 29, 2024, compared to a net loss of $12.1 million for the same period in the previous year[114] Assets and Liabilities - Total current assets increased to $65,321 thousand as of September 29, 2024, from $52,520 thousand as of December 31, 2023, marking a growth of approximately 24.3%[15] - Total liabilities rose to $109,764 thousand as of September 29, 2024, compared to $88,493 thousand as of December 31, 2023, representing an increase of about 24.0%[15] - The company’s accumulated deficit increased to $(216,616) thousand as of September 29, 2024, from $(193,205) thousand as of December 31, 2023[19] - The company had total liabilities of $185.975 million as of October 1, 2023, reflecting ongoing financial challenges[20] - The company’s accrued expenses and other current liabilities totaled $26.6 million as of September 29, 2024, compared to $18.3 million as of December 31, 2023[62] Cash Flow and Financing - Cash and cash equivalents increased to $6,308 thousand as of September 29, 2024, from $2,506 thousand as of December 31, 2023, showing a significant increase of approximately 151.5%[15] - The company reported net cash provided by operating activities of $5.1 million for the thirty-nine weeks ended October 1, 2023, down from $21.1 million in the prior year[21] - Total cash and cash equivalents at the end of the period were $6.3 million, a decrease from $12.9 million at the end of the previous year[22] - The company entered into a credit agreement with a revolving facility of up to $50 million, which was reduced to $15 million as of July 22, 2024[28] - The company borrowed $31.5 million under the 2021 Credit Agreement and the 2024 Amended Credit Agreement during the thirty-nine weeks ended September 29, 2024, with a weighted average interest rate of 7.5% on the outstanding balance[66] - The company reported total cash and cash equivalents of $6.3 million as of September 29, 2024, with $11.5 million due under the 2024 Amended Credit Agreement classified within total current liabilities[115] - The company is actively seeking alternative debt financing and implementing cash conservation measures to meet its obligations[118] Operational Expenses - Selling and marketing expenses for the thirteen weeks ended September 29, 2024, were $16,825 thousand, slightly down from $60,984 thousand for the thirty-nine weeks ended October 1, 2023[17] - Advertising costs for the thirteen weeks ended September 29, 2024, were $13.1 million, compared to $12.4 million for the same period in 2023, indicating a year-over-year increase of approximately 5.6%[47] - For the thirty-nine weeks ended September 29, 2024, advertising costs totaled $46.2 million, slightly down from $46.9 million in the same period in 2023, reflecting a decrease of about 1.5%[47] - General and administrative expenses for the thirteen weeks ended September 29, 2024, were $19,869 thousand, a decrease from $21,575 thousand for the same period in 2023, indicating a reduction of approximately 7.9%[151] Customer Metrics - Active Customers as of September 29, 2024, totaled 2,670,000, consistent with the previous year, while the average order value was $131, slightly down from $133[121] - Active Customers decreased to 2.7 million for the trailing 12 months ended September 29, 2024, down from 3.0 million for the trailing 12 months ended October 1, 2023, indicating a decline in customer retention[137] Compliance and Regulatory - As of September 29, 2024, the Company was not in compliance with its preliminary financial covenants for Q3 2024, requiring an extension for reporting to December 16, 2024[29] - The Company has no further access to revolving commitments under the November 2024 Amended Credit Agreement until financial statements are delivered or by December 16, 2024[30] - If the Company does not refinance its revolving credit facility or obtain a waiver by December 16, 2024, it expects to be in default of its 2024 Amended Credit Agreement[30] - The Company is currently not in compliance with its preliminary financial covenants for the third quarter of 2024, as required by the 2024 Amended Credit Agreement[116] Accounting and Valuation - The company is currently evaluating the effects of recently issued accounting pronouncements on its consolidated financial statements[56] - The effective tax rate for the thirteen weeks ended September 29, 2024, was 0.2%, significantly lower than the federal income tax rate of 21% due to a valuation allowance for deferred tax assets[105] - The Company has a valuation allowance of $5.4 million for deferred tax assets as of September 29, 2024, due to cumulative losses impacting realizability[106] Stock and Equity - As of September 29, 2024, the company had $2.2 million remaining under the 2024 Repurchase Program, with a total of 178,143 shares repurchased at an average price of $1.55 per share[51] - The Company has reserved 161,397 shares of common stock for issuance upon the exercise of stock options as of September 29, 2024[80] - The total number of stock options outstanding as of September 29, 2024, was 161,397, with a weighted average exercise price of $11.35[94] - The Company granted 350,000 Performance Stock Units (PSUs) during the thirty-nine weeks ended September 29, 2024, with an average fair value of $1.81 per share[101] Future Outlook - The company plans to continue investing in operations and infrastructure to enhance operational efficiencies and support growth while managing expenses[140] - The company anticipates that macroeconomic factors, including inflation and consumer confidence, will continue to impact sales and overall business performance[113]

Company Announcement - Lulu's Fashion Lounge Holdings, Inc. will release its third quarter 2024 financial results on November 13, 2024, after market close [1] - A conference call and live webcast will be held at 5:00 p.m. Eastern Time on the same day [1] - The financial results and webcast will be accessible through the Investor Relations section of the Company's website [1] Company Overview - Lulus is an attainable luxury fashion brand for women, headquartered in California, serving millions of customers worldwide [2] - The brand focuses on modern, feminine designs at accessible prices for various occasions [2] - Founded in 1996, Lulus utilizes direct consumer feedback to refine product offerings and enhance customer experience [2] Customer Engagement - Lulus offers world-class personal stylists, bridal concierge, and customer care teams dedicated to exceptional service [2] - The brand aims to make every woman feel beautiful and celebrated for all life’s moments [2]

Core Insights - Lulu's Fashion Lounge Holdings, Inc. has announced a strategic collaboration with Dillard's to enhance its wholesale strategy and expand its distribution footprint across key markets [1][3] - The collaboration will introduce Lulus' latest collections to over 30 Dillard's stores nationwide, focusing on special occasion and event apparel [2][3] - Lulus plans to launch an expanded Prom collection at Dillard's in early 2025, further solidifying its presence in the special occasion wear market [2] Company Strategy - The partnership with Dillard's is a pivotal step in Lulus' broader strategy to amplify its market presence and meet evolving customer demands [3] - Lulus aims to increase visibility and accessibility through key wholesale partnerships, building on the success of its "Friends for Life" campaign and "Lulus Loves" collaborations [4] - The company has launched various collaborations in 2024 with brands like Boys Lie, D'Amelio Footwear, and Levi's, focusing on expanding its reach [4] Market Position - Lulus reported a record second quarter for its special occasion and bridesmaids categories, reinforcing its position as a go-to destination for life's moments [3] - Dillard's, as one of the nation's largest fashion retailers, operates 273 stores across 30 states, providing a significant platform for Lulus to reach new audiences [7]

Core Viewpoint - Lulu's Fashion Lounge Holdings, Inc. has announced a reduction in the size of its Board of Directors from eleven to six members as part of a strategy to reduce costs and streamline operations while adhering to corporate governance best practices [1][3]. Board Restructuring - Five directors have voluntarily resigned, effective September 4, 2024, leaving a Board composed of six members: four independent directors and two non-independent directors, including the CEO [1]. - The remaining directors are expected to possess the necessary skills to support the execution of the company's strategic plan and drive profitability [3]. Cost Reduction Measures - The Board has suspended payment of retainers to directors under the Non-Employee Director Compensation Program until further notice as part of the company's commitment to cost reduction [3]. - The restructuring includes the dissolution of the Technology and Innovation Committee, with its responsibilities redistributed to the Audit Committee [4]. Shareholder Communication - The Chairman of the Board expressed gratitude to the departing members for their service and emphasized the importance of their insights to the company's success [2]. - The company aims to restore shareholder value and return to growth under the leadership of CEO Crystal Landsem [3]. Stock Sale Plan - Mr. McCreight has amended his existing 10b5-1 Sales Plan to allow for the sale of 62,500 shares of common stock, down from 633,000 shares, effective November 18, 2024 [5].

Financial Data and Key Metrics - Net revenue for Q2 2024 was $92 million, a 13% decrease year-over-year, driven by a 14% decrease in total orders and higher return rates [6][29] - Adjusted EBITDA for Q2 2024 was a loss of $0.2 million, compared to a gain of $4.2 million in Q2 2023, reflecting elevated fixed costs and reduced revenue [6][33] - Gross margin improved by 80 basis points year-over-year to 45.5%, driven by lower markdown sales and a shift toward higher-margin product categories [9][30] - Inventory levels declined by 19% year-over-year, exceeding the 13% net revenue decline, indicating improved inventory management [9][36] - Net loss for Q2 2024 was $10.8 million, worsening by $8.2 million compared to Q2 2023, impacted by a $5.4 million noncash tax provision and a $423,000 legal accrual [32] Business Line Performance - Special occasion and bridesmaids net sales grew over 30% year-over-year, surpassing pre-pandemic levels and setting a record for these categories [8] - Casual business experienced significant declines, contributing to the majority of the year-over-year net sales decrease [13] - Third-party brand and influencer collaborations, including partnerships with Levi's and Vans, drove increased media interest and social traffic [10][25] - Wholesale business showed steady progress, with new developments based on best-selling items and streamlined fulfillment processes [12] Market Performance - International sales achieved high double-digit growth in units sold in the top 15 countries outside the US, including Canada, the UK, and Mexico [18] - Average unit retail (AUR) increased year-over-year, driving higher average order value (AOV) and total order value per customer [17] Strategic Direction and Industry Competition - The company is focusing on long-term growth initiatives, including data-driven merchandising, brand awareness, and customer engagement [7] - Investments in proprietary technology and analytics platforms aim to improve customer insights and operational efficiency [7][20] - The company is implementing cost reduction measures, including a 10% to 15% reduction in operating expenses for the second half of 2024 [14][37] - Capital expenditures for the year are expected to decrease by $1.5 million to $2.5 million, with a revised projection of $3.5 million for the fiscal year [14][38] Management Commentary on Operating Environment and Future Outlook - Management views current challenges as temporary and remains committed to long-term growth despite macroeconomic pressures [6][7] - The company withdrew its full-year net revenue and adjusted EBITDA outlook due to slower-than-expected recovery and macroeconomic uncertainty [15][36] - Early Q3 sales trends show sequential improvement, suggesting positive momentum in strategic initiatives [10][36] Other Important Information - The company extended its revolving credit agreement with Bank of America, reducing the facility from $50 million to $15 million, with a future reduction to $10 million by March 31, 2025 [34] - Free cash flow for Q2 2024 was $3 million, a $900,000 decrease year-over-year, with $3.7 million generated from operating activities [35] - The company repurchased approximately $87,000 worth of common stock under its $2.5 million stock repurchase program [35] Q&A Session Summary Question: Consumer health and competitive landscape - The company noted ongoing macroeconomic pressures impacting consumer demand, with a slower-than-expected recovery [41] - Management is focusing on driving engagement and profitability while managing cash flow prudently [41][43] Question: Adjusted EBITDA framework - The company is working through cost reductions, with some measures having immediate benefits and others longer-term impacts [42] - Management is cautious about aligning cost reductions with the slower sales recovery to maintain business momentum [42][43] Question: Plans to drive engagement and marketing expenses - The company plans to optimize marketing spend, markdowns, and discounts based on consumer behavior and macro conditions [45][46] - Investments in brand equity will continue, but with a focus on near-term payoffs [45][46] Question: Cost reduction levers and profitability - The company has implemented headcount reductions and executive pay cuts, with limited additional headcount reductions possible due to an already lean team [47][48] - Further cost reductions may focus on G&A spend, but specifics are not yet finalized [48] Question: Category trends and casual business challenges - The casual business faced significant pressure, while special occasion and bridesmaids categories performed strongly [51] - The company is investing in the recovery of the casual business, but the reorder funnel is taking longer to rebuild due to competitive and consumer pressures [51]

Lulus Reports Second Quarter 2024 Results Exhibit 99.1 Sequential Improvement of 180bps in Quarterly Net Revenue Comps from Q1 2024 to Q2 2024 Gross Margin Rate of 45.5%, up 80bps from Second Quarter 2023 Provides Third Quarter 2024 Financial Outlook CHICO, Calif., August 14, 2024 -- Lulu's Fashion Lounge Holdings, Inc. ("Lulus" or the "Company") (Nasdaq: LVLU) today reported financial results for the second quarter ended June 30, 2024. Crystal Landsem, CEO of Lulus, said: "Our second quarter results were i ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________________ to ___________________ Commission File Number: 001-41059 Lulu's Fashion Lounge Holdings, Inc. (Exact Name of Registrant a ...

"Lulus is dedicated to empowering women to look and feel their best, and our partnership with female-led D'Amelio Footwear not only introduces highly sought-after products for our customers but also solidifies our position as a one-stop shopping destination globally," said Laura Deady, Chief Merchandising Officer, Lulus. "Following the success of our collaborations with Boys Lie, Levi's®, and Vans, we are thrilled to bring D'Amelio Footwear to our customers as we continue to enhance brand value and expand o ...