Lulu's Fashion Lounge (US:LVLU)2024-08-14 20:05Financial Performance - Net revenue for the thirteen weeks ended June 30, 2024, was $91,966 thousand, a decrease of 13.3% compared to $106,122 thousand for the same period in 2023[16] - Gross profit for the thirteen weeks ended June 30, 2024, was $41,883 thousand, down 11.5% from $47,396 thousand in the prior year[16] - Net loss for the thirteen weeks ended June 30, 2024, was $10,796 thousand, compared to a net loss of $2,597 thousand for the same period in 2023, representing a significant increase in losses[16] - Basic loss per share for the thirteen weeks ended June 30, 2024, was $(0.26), compared to $(0.07) for the same period in 2023[16] - Adjusted EBITDA for the thirteen weeks ended June 30, 2024, was $(207) thousand, a significant decrease from $4,219 thousand in the same period of 2023[114] - Net loss margin for the thirteen weeks ended June 30, 2024, was (11.7)%, compared to (2.4)% for the same period in 2023[114] - Net revenue decreased by $27.9 million, or 14%, to $169.225 million for the twenty-six weeks ended June 30, 2024, compared to $197.098 million for the same period in 2023[142] - General and administrative expenses decreased by $6.2 million, or 13%, to $41.547 million for the twenty-six weeks ended June 30, 2024, compared to $48.744 million for the same period in 2023[144] Assets and Liabilities - Total current assets as of June 30, 2024, were $55,189 thousand, an increase from $52,520 thousand as of December 31, 2023[14] - Total liabilities increased to $96,543 thousand as of June 30, 2024, compared to $88,493 thousand at the end of 2023, indicating a rise in financial obligations[14] - Total stockholders' equity decreased to $48,711 thousand as of June 30, 2024, down from $60,952 thousand as of December 31, 2023[14] - Accounts payable increased to $11,890 thousand as of June 30, 2024, from $8,900 thousand at the end of 2023, indicating higher short-term liabilities[14] - Accrued expenses and other current liabilities increased to $27.664 million as of June 30, 2024, compared to $18.343 million as of December 31, 2023[56] Cash Flow and Financing - The company generated net cash provided by operating activities of $10.6 million for the twenty-six weeks ended July 2, 2023, an increase from $8.4 million in the prior year[20] - As of June 30, 2024, the company had total cash and cash equivalents of $1.8 million, down from $5.9 million at the end of the previous year[22] - During the twenty-six weeks ended June 30, 2024, the company borrowed $20.0 million under the 2021 Revolving Facility and repaid $28.0 million of the outstanding balance[57] - The company had $49.7 million available for borrowing under the 2021 Revolving Facility as of June 30, 2024[149] - The company reported a net decrease in cash, cash equivalents, and restricted cash of $725,000 for the twenty-six weeks ended June 30, 2024[157] Expenses - Selling and marketing expenses for the thirteen weeks ended June 30, 2024, were $24,914 thousand, slightly up from $24,670 thousand in the prior year[16] - General and administrative expenses decreased by $3.0 million, or 12%, to $21.436 million for the thirteen weeks ended June 30, 2024, compared to $24.396 million for the same period in 2023[139] - Interest expense decreased by $0.2 million, or 37%, to $0.270 million for the thirteen weeks ended June 30, 2024, compared to $0.426 million for the same period in 2023[140] Customer Metrics - Active Customers decreased to 2,670 thousand for the trailing 12 months ended June 30, 2024, down from 3,080 thousand for the trailing 12 months ended July 2, 2023[121] - Average Order Value remained stable at $143 for both the thirteen weeks ended June 30, 2024, and July 2, 2023[107] - Customer acquisition costs are monitored closely, focusing on brand awareness and digital advertising to optimize marketing spend[120] Inventory and Returns - The company reported a significant increase in returns reserve to $11,623 thousand as of June 30, 2024, compared to $7,854 thousand at the end of 2023, reflecting potential challenges in inventory management[14] - The company utilizes a data-driven strategy for inventory management, leveraging a proprietary reorder algorithm to align inventory with customer demand[122] Equity and Stock - As of June 30, 2024, the company had $2.4 million remaining under the 2024 stock repurchase program, with 47,850 shares repurchased at an average price of $1.82[45] - The company granted 2,401,079 RSUs during the twenty-six weeks ended June 30, 2024, with a weighted average fair value of $1.99 per share[85] - The company had 1,368,288 shares available for issuance under the ESPP as of June 30, 2024[75] Tax and Valuation - The effective tax rate for the thirteen weeks ended June 30, 2024, was 141.8%, significantly higher than the federal income tax rate of 21% due to the establishment of a valuation allowance[88][90] - The company established a valuation allowance of $5.4 million during the thirteen weeks ended June 30, 2024, due to recent cumulative losses[91] Operational Strategy - The company continues to implement cash conservation measures to meet its obligations amid ongoing economic challenges[28] - The company plans to continue investing in operations and infrastructure to enhance operational efficiencies and support growth while managing expenses[123]