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]

Core Insights - Lulus has entered a strategic partnership with D'Amelio Footwear to enhance its market presence and appeal to the Gen Z demographic [6][7] - The collaboration will feature a limited-edition capsule collection under the "Lulus Loves" campaign, launching on July 29, 2024 [13][14] - The partnership aims to leverage the D'Amelio sisters' significant social media influence to drive brand engagement and customer interaction [3][8] Company Overview - Lulus is positioned as an attainable luxury fashion brand for women, offering modern and feminine designs at accessible prices [10] - The company has a history of successful collaborations with brands like Boys Lie, Levi's®, and Vans, which have helped expand its market reach [1][9] - Lulus aims to create a personalized shopping experience through its world-class customer service and stylists [10] Product Launch Details - The D'Amelio Footwear collection will include a variety of styles such as boots, platform slides, sneakers, and pumps, designed for various occasions [14] - A preview event will be held on July 27, 2024, allowing fans to meet the D'Amelio sisters and shop the collection before its official release [2][8] - The marketing campaign for the launch will include social media activations, in-person events, and prominent advertising placements, including a billboard in Times Square [3][8] Target Audience and Marketing Strategy - The partnership is designed to amplify Lulus' influence within the Gen Z demographic, utilizing the D'Amelio sisters' extensive social media following of over 400 million [18] - The marketing strategy will focus on integrated approaches across various platforms to cultivate brand loyalty among younger consumers [3][6] - Lulus aims to position itself as a go-to shopping destination by offering compelling brands that resonate with its core customers [9]

On the heels of partnerships with Levi's® and Boys Lie, Lulus continues momentum by introducing new curated collections of coveted brands to customers in latest Lulus Loves capsule "At Lulus, we are always looking for inventive ways to energize our customers and our Lulus Loves: Vans capsule is nothing short of that," said Laura Deady, Chief Merchandising Officer, Lulus. "With this exciting new partnership, we're showing our customers how easy it is to incorporate Vans essential styles into any of their sum ...

On the heels of partnerships with Levi's® and Boys Lie, Lulus continues momentum by introducing new curated collections of coveted brands to customers in latest Lulus Loves capsule The addition of Vans to its repertoire expands Lulus' footwear offerings, providing shoppers with an even wider selection of iconic and fashion-forward options. For everything from al fresco lunches to summer soirees to outdoor concerts or in-office days, the Lulus Loves: Vans capsule will make Vans' signature styles, including i ...

Lulu's Fashion Lounge Holdings, Inc. (LVLU) came out with a quarterly loss of $0.15 per share versus the Zacks Consensus Estimate of a loss of $0.07. This compares to loss of $0.14 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -114.29%. A quarter ago, it was expected that this company would post a loss of $0.10 per share when it actually produced a loss of $0.18, delivering a surprise of -80%.Over the last four quarters, the ...