Core Insights - Lulu's Fashion Lounge Holdings, Inc. reported significant improvements in liquidity, with a $1.4 million increase in cash provided by operating activities and a $1.8 million increase in free cash flow compared to Q1 2024 [1][2] - The company reduced total debt by $3.0 million and net debt by $7.2 million during Q1 2025 [1][2] - The company withdrew its net revenue and Adjusted EBITDA financial outlook for the fiscal year ending December 28, 2025, due to heightened uncertainty related to international trade policy and macroeconomic conditions [2][7] Financial Performance - Net revenue for Q1 2025 was $64.2 million, a 17% decrease compared to the same period last year, driven by a 17% decrease in total orders placed and a 5% decrease in average order value from $143 to $136 [8][10] - Active customers decreased by 8% to 2.6 million compared to 2.8 million in the same period last year [8][31] - Gross profit decreased by 21% to $25.8 million, with gross margin decreasing by 200 basis points to 40.3% [8][31] - The net loss for Q1 2025 was $8.0 million, compared to a net loss of $5.7 million in the same period last year [8][31] - Adjusted EBITDA was ($4.7) million, compared to ($2.7) million in the same period last year [8][31] Operational Highlights - The company successfully consolidated its West Coast distribution facilities and saw sequential monthly improvement in year-over-year net revenue comparisons [4][3] - Positive sales momentum was noted in occasion dresses, particularly in the bridesmaid category, although there was continued softness in casual wear and footwear [4][3] - The company is focused on cost efficiency, optimizing its business, and broadening its customer base [4][3] Cash Flow and Debt Management - Net cash provided by operating activities was $8.3 million, compared to $6.9 million in the same period last year [8][14] - Free cash flow was $7.8 million, compared to $6.0 million in the same period last year [8][34] - Total debt decreased to $10.0 million, and net debt decreased to $1.5 million during the thirteen weeks ended March 30, 2025 [8][33]

PART I FINANCIAL INFORMATION [Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) The unaudited condensed consolidated financial statements for the thirteen weeks ended March 30, 2025, show a decrease in net revenue and an increase in net loss compared to the prior year period, with substantial doubt about the company's ability to continue as a going concern [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 30, 2025, total assets increased to $114.3 million, total liabilities significantly rose to $107.8 million, and stockholders' equity decreased to $6.6 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 30, 2025 | December 29, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $8,616 | $4,460 | | Inventory, net | $39,668 | $34,036 | | Total current assets | $62,727 | $51,501 | | Total assets | $114,341 | $108,198 | | **Liabilities & Equity** | | | | Revolving line of credit | $10,090 | $13,090 | | Total current liabilities | $91,751 | $74,325 | | Total liabilities | $107,789 | $94,830 | | Total stockholders' equity | $6,552 | $13,368 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the thirteen weeks ended March 30, 2025, net revenue decreased by 17% to $64.2 million, gross profit fell to $25.8 million, and the net loss widened to $8.0 million Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net revenue | $64,155 | $77,259 | | Gross profit | $25,841 | $32,646 | | Loss from operations | ($8,118) | ($6,158) | | Net loss | ($7,998) | ($5,736) | | Diluted loss per share | ($0.19) | ($0.15) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first thirteen weeks of 2025, net cash provided by operating activities increased to $8.3 million, while net cash used in investing and financing activities was $0.6 million and $3.6 million respectively, resulting in $8.6 million cash at period end Cash Flow Summary (in thousands) | Cash Flow Activity | Thirteen Weeks Ended March 30, 2025 | Thirteen Weeks Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $8,322 | $6,947 | | Net cash used in investing activities | ($567) | ($959) | | Net cash used in financing activities | ($3,599) | ($3,005) | | **Net increase in cash** | **$4,156** | **$2,983** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes disclose a going concern warning due to recurring losses and reliance on debt financing, multiple amendments to the credit facility, a stock repurchase program, and significant uncertainty regarding new U.S. trade tariffs - The company has concluded that there is substantial doubt about its ability to continue as a going concern, as management's plans to seek alternative debt financing are outside of its control and may not be effectively implemented within twelve months[36](index=36&type=chunk) - The company entered into a fourth amendment to its 2021 Credit Agreement on March 27, 2025, which provided limited covenant waivers, prohibited further borrowings, reduced the revolving commitment, and increased interest rates[74](index=74&type=chunk)[76](index=76&type=chunk) - On May 3, 2024, the Board authorized a **$2.5 million stock repurchase program** During Q1 2025, the company repurchased 242,068 shares for approximately **$0.2 million**, with **$1.8 million** remaining available under the program[52](index=52&type=chunk)[53](index=53&type=chunk) - Subsequent to the quarter end, the U.S. government announced significant tariffs, including a potential **145% on Chinese imports** While a 90-day agreement on May 12, 2025, reduced these tariffs to approximately **30%**, the potential impact on the company's results remains uncertain[125](index=125&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 17% decrease in Q1 2025 net revenue to lower orders and Average Order Value, resulting in a widened net loss and negative Adjusted EBITDA, while the company seeks alternative debt financing amid liquidity challenges Key Operating and Financial Metrics | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Gross Margin | 40.3% | 42.3% | | Net loss (in thousands) | ($7,998) | ($5,736) | | Adjusted EBITDA (in thousands) | ($4,670) | ($2,659) | | Active Customers (in thousands) | 2,550 | 2,770 | | Average Order Value | $136 | $143 | - Net revenue decreased by **$13.1 million (17%)** in Q1 2025 compared to Q1 2024, driven by a **17% decrease in Total Orders Placed** and a lower AOV[164](index=164&type=chunk) - General and administrative expenses decreased by **$3.1 million (15%)** due to reduced headcount from cost reduction measures, lower equity-based compensation, and decreased D&O insurance and legal fees[168](index=168&type=chunk) - The company has no further access to borrowings under its 2021 Credit Agreement and is actively seeking alternative debt financing These conditions raise **substantial doubt about the company's ability to continue as a going concern**[133](index=133&type=chunk)[176](index=176&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes in its exposure to market risk since its 2024 Annual Report on Form 10-K - There has been **no material change** in the company's exposure to market risk since its 2024 10-K filing[202](index=202&type=chunk) [Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 30, 2025, with no material changes in internal control over financial reporting during the quarter - Based on an evaluation as of the end of the reporting period, the CEO and CFO concluded that the company's disclosure controls and procedures were **effective**[204](index=204&type=chunk) - No changes occurred in the company's internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[205](index=205&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=58&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal proceedings in the ordinary course of business but does not believe any current matters will have a material adverse effect on its financial condition or results of operations - The company is not currently a party to any legal proceedings that it believes would **materially and adversely affect** its business or financial condition[207](index=207&type=chunk) [Risk Factors](index=58&type=section&id=Item%201A.%20Risk%20Factors) This section highlights material changes to risk factors, focusing on the adverse impact of international trade disputes and tariffs, including recent developments with China, which could increase merchandise costs and negatively impact operating results - A significant portion of the company's merchandise is manufactured in countries like China and Mexico, making it **vulnerable to international trade disputes and tariffs**[209](index=209&type=chunk) - Recent tariff developments, including a global reciprocal tariff program announced on April 4, 2025, and a subsequent 90-day agreement with China on May 12, 2025, create **significant uncertainty** These tariffs could increase merchandise costs and negatively impact sales and profitability[209](index=209&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=60&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the thirteen weeks ended March 30, 2025, the company repurchased 242,068 shares of common stock for approximately $0.2 million under its 2024 Repurchase Program, with $1.77 million remaining available Common Stock Repurchases (Q1 2025) | Period | Total Shares Purchased | Weighted Average Price Paid Per Share | | :--- | :--- | :--- | | Dec 30, 2024 - Feb 2, 2025 | 178,484 | $1.02 | | Feb 3, 2025 - Mar 2, 2025 | 63,584 | $0.90 | | Mar 3, 2025 - Mar 30, 2025 | - | - | - All share repurchases were made under the **$2.5 million 2024 Repurchase Program** authorized on May 8, 2024[212](index=212&type=chunk) [Other Information](index=60&type=section&id=Item%205.%20Other%20Information) On April 28, 2025, the company amended its Non-Employee Director Compensation Program, eliminating the Board Chair's annual RSU award for an increased cash retainer, and subsequently approved a one-time cash payment to eligible non-employee directors in lieu of their 2025 RSU awards to reduce share dilution - The Non-Employee Director Compensation Program was amended to eliminate the Board Chair's annual RSU award and increase the cash retainer to **$75,000**, among other changes[215](index=215&type=chunk) - To mitigate share dilution, the Board approved a **one-time $50,000 cash payment** to each eligible non-employee director instead of the **$100,000 annual RSU award** for fiscal year 2025[217](index=217&type=chunk) [Exhibits](index=63&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including amendments to the credit agreement and non-employee director compensation program, lease agreements, and officer certifications - Key exhibits filed include the **Fourth Amendment to the Credit Agreement**, the **Fourth Amendment to the Non-Employee Director Compensation Program**, and **CEO/CFO certifications**[221](index=221&type=chunk)

Company Announcement - Lulu's Fashion Lounge Holdings, Inc. will release its first quarter 2025 financial results on May 14, 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 - The financial results and live webcast will be available 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 13752976 [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]

Investors might want to bet on Lulu's Fashion Lounge Holdings, Inc. (LVLU) , as it has been recently upgraded to a Zacks Rank #2 (Buy). This upgrade primarily reflects an upward trend in earnings estimates, which is one of the most powerful forces impacting stock prices. The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate. ...

Core Insights - Lulus Fashion Lounge Holdings, Inc. has released its first-ever Spring 2025 Wedding Trend Report, highlighting key shifts in wedding attire based on internal sales data, customer surveys, and on-site search behavior [1][4] - The report indicates a significant evolution in wedding fashion, with brides and guests seeking more personalized and expressive styles, moving away from traditional, uniform looks [2][3] Group 1: Trends in Wedding Fashion - Weddings are now seen as multi-event fashion experiences, with brides curating wardrobes for various events leading up to the wedding and even during the honeymoon [11] - The report reveals a dramatic shift towards versatile, ultra-feminine, and event-specific wedding attire, with brides favoring elegant slip dresses and bridesmaids embracing mix-and-match styles [2][6] - Searches for "wedding dress" on Lulus.com have surged by 258%, indicating a growing interest in Lulus as a destination for wedding attire [8] Group 2: Key Fashion Trends - Bridal trends are characterized by sheer and effortless designs, with a notable rise in slip dresses (+107%) and draped cowl necklines (+250%) [7][8] - Bridesmaids are increasingly opting for tiered gowns (+110%) and plissé fabrics (+143%), with pastel shades like sage green (+89%) and purple (+53%) gaining popularity [7][14] - Wedding guests are making bold fashion statements, with dramatic black maxis and floral prints dominating the scene [10][14] Group 3: Influencing Factors - The demand for affordable luxury is a top priority, with shoppers seeking stylish, high-quality wedding attire at accessible price points [3][12] - Social media platforms like TikTok and Instagram are reshaping wedding fashion trends, influencing how consumers shop for wedding attire [12][14] - Celebrity influences, such as Hailey Bieber's and Alex Cooper's styles, are shaping modern bridal trends [12][14] Group 4: Upcoming Initiatives - Lulus is set to launch an exclusive, limited-edition wedding and event wear collection in collaboration with Australian brand Elliatt in April, further expanding its footprint in the wedding attire market [12][14]

Lulu's Fashion Lounge (LVLU) Q4 2024 Earnings Call March 28, 2025 01:10 AM ET Company Participants Naomi Beckman-Straus - General Counsel & Corporate SecretaryCrystal Landsem - CEO and DirectorMark Vos - President & Chief Information OfficerTiffany Smith - CFO Operator Good afternoon, and welcome to Lulu's Fourth Quarter and Fiscal Year twenty twenty four Earnings Conference Call. Today's call is being recorded and we have allocated one hour for the prepared remarks and Q and A. At this time, I'd like to tu ...

Financial Data and Key Metrics Changes - Q4 net revenue was approximately $66.1 million, down 12% year-over-year, driven by a 12% decrease in total orders placed and a 5% decrease in average order value [44] - For the full year, net revenue totaled $315.9 million, down 11% versus 2023, primarily due to a 12% decline in total orders placed and higher return rates, partially offset by a 3% increase in average order value [44] - Gross margin for Q4 was 37.9%, down 120 basis points year-over-year, impacted by higher markdowns and discounts [45] - Net loss for Q4 worsened to $31.9 million from $7.2 million year-over-year, reflecting a noncash $28.4 million goodwill impairment charge [46] - Adjusted net loss for Q4 was $3.5 million, representing a more than 50% reduction in net loss compared to Q4 of last year [47] Business Line Data and Key Metrics Changes - Special occasion and bridesmaids categories delivered positive mid-teens year-over-year net sales growth in Q4, reinforcing market leadership [19] - Q4 wholesale revenue grew 76% year-over-year, driven by high double-digit gains among major partners [22] - Casual wear segment continued to experience softness, leading to year-over-year net sales declines [16] Market Data and Key Metrics Changes - International presence showed strong year-over-year growth in Q4, marking fiscal year 2024 as a high double-digit international growth year [29] - Return rates improved for the second consecutive quarter, highlighting material improvements in fit and quality [21] Company Strategy and Development Direction - The company is focusing on core strengths as a premier destination for occasion dresses while optimizing cost structures [10] - Strategic initiatives include product assortment optimization, brand engagement investments, and technology enablement [10][12] - Plans to mitigate tariff impacts through diversified sourcing and pricing adjustments [15][35] Management's Comments on Operating Environment and Future Outlook - Management acknowledges macroeconomic uncertainties in 2025 but is focused on positioning the business for success [13] - Full year guidance for 2025 anticipates net revenue between $280 million and $310 million, reflecting potential macroeconomic pressures [54] - Adjusted EBITDA outlook for 2025 is expected to be between $0 and $6 million, indicating a potential improvement from 2024 [56] Other Important Information - The company successfully consolidated two distribution facilities, enhancing operational efficiency [42] - Inventory balance at quarter end was $34 million, down about $1.4 million year-over-year, reflecting disciplined inventory management [52] Q&A Session Summary Question: What are the expectations for revenue in 2025? - The company anticipates net revenue to be between $280 million and $310 million, reflecting potential macroeconomic pressures and stable demand [54] Question: How is the company addressing tariff impacts? - The company plans to mitigate tariff impacts through diversified sourcing and pricing adjustments, while maintaining product quality [35] Question: What are the key initiatives for improving profitability? - Key initiatives include cost reduction measures, product assortment optimization, and investments in brand awareness and technology [10][56]

Part I [Business](index=9&type=section&id=Item%201.%20Business) Lulus is a digitally-native fashion brand for Millennial and Gen Z women, employing a data-driven 'test, learn, and reorder' model to offer attainable luxury apparel and drive growth - Lulus is a digitally-native, online fashion brand for Millennial and Gen Z women, offering attainable luxury products[26](index=26&type=chunk) - The company employs a "**test, learn, and reorder**" strategy, using data to test new products in small batches and reordering successful items in higher volumes to optimize profitability and reduce fashion risk[28](index=28&type=chunk)[33](index=33&type=chunk) - Key growth strategies include increasing brand awareness through marketing, enhancing relationships with its **2.6 million active customers**, expanding product categories, and pursuing international markets[37](index=37&type=chunk)[39](index=39&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) - The company collaborates with a network of around **300 suppliers** without long-term volume commitments, providing flexibility[43](index=43&type=chunk) - Technology is central to the business, with proprietary systems for website management, merchandising, order processing, and warehouse management, all driven by data analytics and predictive modeling[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk) - As of December 29, 2024, Lulus had **580 full-time and part-time employees**. The company emphasizes a culture defined by its core values: "All Voices, All In, Always Evolving"[67](index=67&type=chunk)[68](index=68&type=chunk) [Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including recurring net losses, a Nasdaq delisting notice, substantial doubt about its going concern ability, supply chain dependencies, and reliance on social media platforms - The company has a history of net losses, including a **$55 million loss in fiscal 2024**, and may not achieve or maintain profitability[129](index=129&type=chunk) - On February 27, 2025, the company received a delisting notice from Nasdaq for its common stock's closing bid price falling below **$1.00 per share** for 30 consecutive trading days[256](index=256&type=chunk) - The company's financial condition, including recurring net losses and reliance on amended credit facilities, raises **substantial doubt about its ability to continue as a going concern**[123](index=123&type=chunk)[425](index=425&type=chunk) - The business is highly dependent on its brand image and ability to engage customers and influencers. Negative publicity or failure to meet expectations could harm the business[77](index=77&type=chunk)[80](index=80&type=chunk) - A significant portion of merchandise is manufactured in **China**, exposing the company to risks from international trade disputes, tariffs, and political instability. The U.S. government imposed **new tariffs** on Chinese, Canadian, and Mexican imports in February 2025[108](index=108&type=chunk)[161](index=161&type=chunk)[204](index=204&type=chunk) - The company relies on **social media** for marketing and faces risks from platform changes or bans, such as the potential U.S. ban on **TikTok**, which is a key channel for engaging Gen Z customers[89](index=89&type=chunk)[91](index=91&type=chunk)[103](index=103&type=chunk) - A goodwill impairment charge of **$28.4 million** was recorded in the fourth quarter of 2024 due to a sustained decline in stock price and continuing net losses[270](index=270&type=chunk) [Unresolved Staff Comments](index=90&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company has no unresolved staff comments from the SEC - Not applicable[301](index=301&type=chunk) [Cybersecurity](index=90&type=section&id=Item%201C.%20Cybersecurity) Lulus manages cybersecurity through a layered, cross-departmental strategy overseen by the Audit Committee, with no material threats identified in fiscal 2024 - Cybersecurity risk is managed through a **cross-departmental approach** overseen by the **Board's Audit Committee**, with the President and CIO leading the program[302](index=302&type=chunk)[303](index=303&type=chunk)[305](index=305&type=chunk) - The company utilizes a **layered cybersecurity strategy** and regularly conducts external penetration tests, bug bounty hackathons, and maturity assessments to maintain a robust program[304](index=304&type=chunk) - In fiscal year 2024, **no cybersecurity threats** were identified that have materially affected or are reasonably likely to materially affect the company's business strategy, operations, or financial condition[308](index=308&type=chunk) [Properties](index=92&type=section&id=Item%202.%20Properties) Lulus leases all its facilities, including corporate headquarters, office space, and two distribution centers, having recently consolidated its Chico distribution operations - The company **does not own any real property** and **leases all its facilities**[309](index=309&type=chunk) Leased Facilities | Location | Type | Square Footage (approximate) | | :--- | :--- | :--- | | Chico, California | Retail space | 5,600 | | Los Angeles, California | Retail space | 6,400 | | Chico, California | Corporate headquarters | 7,600 | | Los Angeles, California | Office and studio space | 26,800 | | Chico, California | Distribution facility and office space | 100,000 | | Ontario, California | Distribution facility | 140,400 | | Easton, Pennsylvania | Distribution facility | 258,200 | [Legal Proceedings](index=92&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, none of which are expected to have a material adverse effect on its business or financial condition - The company is **not currently a party** to any legal proceedings that are expected to have a **material adverse effect** on its business or financial condition[312](index=312&type=chunk) [Mine Safety Disclosures](index=92&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[313](index=313&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=93&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Lulus common stock trades on Nasdaq, the company does not plan future cash dividends, and a $2.5 million stock repurchase program was authorized in May 2024 - The company's common stock is listed on Nasdaq under the symbol "**LVLU**" and began trading on **November 11, 2021**[315](index=315&type=chunk) - The company **does not anticipate paying any cash dividends** in the foreseeable future and intends to retain funds for business development[317](index=317&type=chunk) - On May 8, 2024, the Board authorized a **$2.5 million** stock repurchase program. During Q4 2024, the company repurchased **161,178 shares** for approximately **$220,000**[319](index=319&type=chunk) [Reserved](index=94&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information - This item is reserved[320](index=320&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=94&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2024 saw an 11% net revenue decline to $315.9 million and a $55.3 million net loss, raising substantial doubt about the company's going concern ability due to liquidity issues and amended credit facilities - Changing **macroeconomic factors**, including inflation and reduced consumer discretionary spending, directly impacted sales in fiscal 2024[322](index=322&type=chunk)[447](index=447&type=chunk) - The company's financial condition, with a net loss of **$55.3 million in 2024** and limited cash, raises **substantial doubt about its ability to continue as a going concern**. Management is seeking alternative debt financing and implementing cash conservation measures[323](index=323&type=chunk)[324](index=324&type=chunk)[448](index=448&type=chunk)[449](index=449&type=chunk) - A goodwill impairment charge of **$28.4 million** was recorded in Q4 2024, triggered by a sustained decline in the company's stock price and continuing net losses[326](index=326&type=chunk)[363](index=363&type=chunk)[412](index=412&type=chunk) Key Financial and Operating Metrics (2024 vs. 2023) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Net revenue (in thousands) | $315,887 | $355,175 | | Net income (loss) (in thousands) | $(55,286) | $(19,334) | | Adjusted EBITDA (in thousands) | $(9,738) | $3,231 | | Active Customers (in thousands) | 2,620 | 2,830 | | Average Order Value | $137 | $133 | - Net revenue decreased by **11% in 2024** compared to 2023, primarily due to a **12% decline in Total Orders Placed**[357](index=357&type=chunk) - The company has **amended its 2021 Revolving Facility four times**, securing waivers for financial covenants but facing reduced borrowing capacity, increased interest rates, and other restrictions. The Fourth Credit Amendment, in March 2025, **prohibits further borrowings**[372](index=372&type=chunk)[373](index=373&type=chunk)[374](index=374&type=chunk)[375](index=375&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=114&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks primarily from floating-rate debt and inflation, while foreign currency risk is currently not significant - The company is exposed to **interest rate risk** due to its **floating-rate borrowings** under the 2021 Revolving Facility[416](index=416&type=chunk) - Foreign currency risk is **not currently material** as most sales and expenses are denominated in U.S. dollars[417](index=417&type=chunk) - The company has experienced **inflationary pressures** in its supply chain and operating costs, which also impacts customer spending[418](index=418&type=chunk) [Financial Statements and Supplementary Data](index=117&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited financial statements, with the auditor's report highlighting substantial doubt about the company's going concern ability due to recurring losses and insufficient liquidity - The Report of Independent Registered Public Accounting Firm includes a "**Going Concern**" paragraph, citing the company's recurring net losses and insufficient access to liquidity as factors that raise **substantial doubt about its ability to continue as a going concern**[425](index=425&type=chunk) Consolidated Balance Sheet Summary (as of Dec 29, 2024) | Metric | Value (in thousands) | | :--- | :--- | | **Assets** | | | Cash and cash equivalents | $4,460 | | Inventory, net | $34,036 | | Goodwill | $7,056 | | Total Assets | $108,198 | | **Liabilities & Equity** | | | Revolving line of credit | $13,090 | | Total Liabilities | $94,830 | | Total Stockholders' Equity | $13,368 | Consolidated Statement of Operations Summary (Fiscal Year 2024) | Metric | Value (in thousands, except per share) | | :--- | :--- | | Net revenue | $315,887 | | Gross profit | $130,248 | | Goodwill impairment | $28,374 | | Net income (loss) | $(55,286) | | Diluted earnings (loss) per share | $(1.33) | Consolidated Statement of Cash Flows Summary (Fiscal Year 2024) | Metric | Value (in thousands) | | :--- | :--- | | Net cash provided by operating activities | $2,601 | | Net cash used in investing activities | $(2,874) | | Net cash provided by financing activities | $2,227 | | Net increase in cash and cash equivalents | $1,954 | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=168&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[624](index=624&type=chunk) [Controls and Procedures](index=168&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 29, 2024, with no material changes reported - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective** as of December 29, 2024[626](index=626&type=chunk) - Management determined that the company's internal control over financial reporting was **effective** as of December 29, 2024, based on the COSO framework[629](index=629&type=chunk) - The company is an **emerging growth company**, and therefore this annual report **does not include an attestation report** on internal controls from its independent registered accounting firm[630](index=630&type=chunk) [Other Information](index=170&type=section&id=Item%209B.%20Other%20Information) On March 27, 2025, the company entered a Fourth Amendment to its Credit Agreement, providing covenant waivers, prohibiting further borrowings, and setting refinancing milestones - On March 27, 2025, the company entered into a **Fourth Amendment to its Credit Agreement**, which provided a limited waiver for financial covenants for the quarter ended Dec 31, 2024, and suspended certain covenant tests for Q1 2025[632](index=632&type=chunk) - The Fourth Credit Amendment **prohibits further borrowings**, reduces future commitment amounts, **increases interest rates**, and sets a timeline for a refinancing transaction[632](index=632&type=chunk) - **No director or officer** adopted or terminated a Rule 10b5-1 trading arrangement during the fourth quarter of 2024[634](index=634&type=chunk) [Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](index=170&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20That%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[635](index=635&type=chunk) Part III [Directors, Executive Officers, and Corporate Governance](index=171&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%2C%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2025 Proxy Statement - Information regarding directors, executive officers, and corporate governance is **incorporated by reference** from the Company's Proxy Statement for its 2025 Annual Meeting of Stockholders[638](index=638&type=chunk) [Executive Compensation](index=171&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the 2025 Proxy Statement - Information regarding executive compensation is **incorporated by reference** from the Company's Proxy Statement for its 2025 Annual Meeting of Stockholders[639](index=639&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=171&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership of beneficial owners and management is incorporated by reference from the 2025 Proxy Statement - Information regarding security ownership is **incorporated by reference** from the Company's Proxy Statement for its 2025 Annual Meeting of Stockholders[640](index=640&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=171&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on certain relationships, related transactions, and director independence is incorporated by reference from the 2025 Proxy Statement - Information regarding certain relationships, related transactions, and director independence is **incorporated by reference** from the Company's Proxy Statement for its 2025 Annual Meeting of Stockholders[641](index=641&type=chunk) [Principal Accountant Fees and Services](index=171&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information on principal accountant fees and services is incorporated by reference from the 2025 Proxy Statement - Information regarding principal accountant fees and services is **incorporated by reference** from the Company's Proxy Statement for its 2025 Annual Meeting of Stockholders[642](index=642&type=chunk) Part IV [Exhibit and Financial Statement Schedules](index=172&type=section&id=Item%2015.%20Exhibit%20and%20Financial%20Statement%20Schedules) This section lists the consolidated financial statements and a detailed index of all exhibits filed with or incorporated by reference into the Form 10-K - This section contains the list of **financial statements** and the **exhibit index** for the Form 10-K filing[644](index=644&type=chunk)[647](index=647&type=chunk) [Form 10-K Summary](index=181&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company provides no summary in this section - None[653](index=653&type=chunk)

Financial Performance - Net revenue for fiscal year 2024 was $315.9 million, an 11% decrease compared to 2023, driven by a 12% decrease in total orders placed[5]. - Active customers decreased by 7% to 2.6 million, down from 2.8 million in 2023[5]. - Gross profit decreased by 12% to $130.2 million, with gross margin decreasing by 50 basis points to 41.2%[5]. - Net loss for fiscal year 2024 was $55.3 million, compared to a net loss of $19.3 million in 2023, including a non-cash goodwill impairment charge of $28.4 million[5]. - Adjusted EBITDA for fiscal year 2024 was ($9.7) million, compared to $3.2 million in 2023[5]. - For the fiscal year ended December 29, 2024, Lulus reported a net loss of $55,286,000, compared to a net loss of $19,334,000 for the previous year, indicating a significant increase in losses[15]. - The company's Adjusted EBITDA for the fiscal year was $(9,738,000), a decline from $3,231,000 in the prior year, reflecting ongoing operational challenges[30]. - Gross Margin decreased to 41.2% for the fiscal year ended December 29, 2024, down from 41.7% in the previous year, indicating pressure on profitability[30]. - Active Customers decreased to 2,620,000 in the fiscal year 2024, down from 2,830,000 in 2023, suggesting a decline in customer engagement[30]. - Cash provided by operating activities was $2,601,000 for the fiscal year, a decrease from $15,421,000 in the prior year, highlighting cash flow challenges[15]. - Net loss margin for the thirteen weeks ended December 29, 2024, was (48.2)%, compared to (9.6)% for the same period in 2023[31]. - Adjusted EBITDA margin for the fifty-two weeks ended December 29, 2024, was (3.1)%, down from 0.9% for the same period in 2023[31]. Future Outlook - The company expects net revenue for fiscal year 2025 to be between $280 million and $310 million, representing a decrease of 11% to 2% compared to 2024[12]. - The company anticipates adjusted EBITDA for fiscal year 2025 to be between $0 and $6 million, an increase of $9.7 million to $15.7 million compared to 2024[12]. - The outlook for fiscal year 2025 emphasizes growth in operating cash flow and a focus on profitability[7]. - Lulus plans to focus on growth opportunities and a return to profitability in the coming quarters, as stated in their forward-looking statements[18]. Cost Management - Cost reduction efforts resulted in a 175 basis point reduction in total expenses as a percentage of net revenue in Q4 2024[1]. - The company completed the consolidation of its West Coast distribution facilities in Q1 2025 to optimize costs[2]. Cash Flow and Investments - The company experienced a net cash decrease of $1,954,000 during the fiscal year, compared to a decrease of $7,713,000 in the previous year, indicating improved cash management[15]. - Lulus reported a net cash used in investing activities of $(2,874,000) for the fiscal year, down from $(4,003,000) in the previous year, reflecting a reduction in capital expenditures[15]. - Cash and cash equivalents as of December 29, 2024, were $4,460 thousand, compared to $2,506 thousand as of December 31, 2023[31]. Customer Engagement - Average Order Value (AOV) for the fiscal year was $137, compared to $133 in the previous year, showing a slight increase in customer spending per order[30]. - The company is actively investing in new product development and market expansion strategies to enhance customer experience and drive sales[17].

Core Insights - Lulu's Fashion Lounge Holdings, Inc. reported a net revenue of $315.9 million for Q4 2024, an 11% decrease compared to the previous year, primarily due to a 12% decline in total orders placed and higher return rates, despite a 3% increase in average order value [8][14] - The company experienced a net loss of $55.3 million in Q4 2024, which included a non-cash goodwill impairment charge of $28.4 million, marking a significant increase from a net loss of $19.3 million in Q4 2023 [8][14] - The financial outlook for fiscal year 2025 anticipates continued growth in operating cash flow, driven by strategic cost reductions and a focus on special occasion and event wear, while casual categories are being repositioned [6][10] Financial Performance - Q4 2024 highlights include a gross profit of $130.2 million, a 12% decrease from the previous year, and a gross margin of 41.2%, down 50 basis points [8][14] - Active customers decreased by 7% to 2.6 million compared to 2.8 million in 2023 [8] - Adjusted EBITDA for Q4 2024 was ($9.7) million, compared to $3.2 million in Q4 2023, indicating a decline in operational performance [8][14] Cost Management and Strategic Initiatives - The company successfully implemented cost reduction plans, resulting in a 15% decline in selling, marketing, and administrative expenses, amounting to $5.5 million lower year-over-year [5][6] - Consolidation of West Coast distribution facilities was completed in early 2025, aimed at optimizing costs and improving operational efficiency [5][6] - Expansion of strategic wholesale partnerships is intended to enhance customer reach across various shopping channels while maintaining a scalable growth model [3][6] Future Outlook - The company expects net revenue for 2025 to be between $280 million and $310 million, reflecting a decrease of 11% to 2% compared to 2024 [14] - Anticipated adjusted EBITDA for 2025 is projected to be between $0 and $6 million, representing a significant increase compared to the previous year [14] - The company aims to strengthen its cash position and return to profitability while maintaining healthy inventory turns [6][10]