Lulu's Fashion Lounge (LVLU) - 2025 Q3 - Quarterly Results

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].