Significant Improvement in Liquidity with
Reduced Total Debt by
“We exceeded our expectations in the first quarter with respect to cash flow generation and net debt reduction. We believe our strengthened balance sheet, along with a leaner cost structure, position us well to navigate the remainder of the year as we continue to invest in our brand, expand on our strategic wholesale partnerships and optimize our product margin.
In the first quarter, we successfully completed the consolidation of our
First Quarter 2025 Highlights:
- Net revenue of
$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 (“AOV”) from$143 to$136 offset by the impact of lower return rates, compared to the same period last year. - Active Customers of 2.6 million, an 8% decrease compared to 2.8 million in the same period last year.
- Gross profit decreased 21% to
$25.8 million and Gross Margin decreased 200 basis points to 40.3%, in each case compared to the same period last year. - Net loss of
$8.0 million , compared to net loss of$5.7 million in the same period last year. - Adjusted EBITDA* of
($4.7) million , compared to($2.7) million in the same period last year. - Net cash provided by operating activities of
$8.3 million , compared to$6.9 million in the same period last year. - Free Cash Flow* of
$7.8 million , compared to$6.0 million in the same period last year. - Total debt and Net Debt* decreased by
$3.0 million and$7.2 million to$10.0 million and$1.5 million , respectively, during the thirteen weeks endedMarch 30, 2025 .
Note: “*” represents a non-GAAP financial measure. See “Use of Non-GAAP Financial Measures and Other Operating Metrics” section below for definitions of these metrics.
“Due to heightened uncertainty related to international trade policy, tariffs and the macroeconomic environment, even in light of the recent temporary pause on certain tariffs, we are withdrawing our previously issued full-year 2025 net revenue and Adjusted EBITDA outlook. We expect positive Adjusted EBITDA in the second quarter 2025 and remain committed to strengthening our liquidity position throughout the year while maintaining our full-year 2025 guidance on capital expenditures. We will continue to closely manage our business and take the necessary steps to successfully navigate this dynamic environment. As of the date of this press release, we have further reduced our revolving line of credit balance to
Forecasting future results or trends is inherently difficult for any business, and actual results or trends may differ materially from those forecasted. Lulus’ outlook is based on current indications for its business. Lulus’ outlook factors in our current best estimates for anticipated headwinds, including those related to the level of tariffs, consumer demand, spending and returns by our customers, macroeconomic uncertainties, inflation, supply chain pressures, shipping costs, and the intended impact of cost-reduction measures. Given the volatile nature of current consumer demand and potential for further impacts to consumer behavior due to macroeconomic factors, including continued inflation, higher interest rates, student loan repayment resumption, global political changes, including as a result of the change in the
| LULU’S FASHION LOUNGE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) (In thousands, except share and per share data) | ||||||||
| Thirteen Weeks Ended | ||||||||
| 2025 | 2024 | |||||||
| Net revenue | $ | 64,155 | $ | 77,259 | ||||
| Cost of revenue | 38,314 | 44,613 | ||||||
| Gross profit | 25,841 | 32,646 | ||||||
| Selling and marketing expenses | 15,915 | 17,693 | ||||||
| General and administrative expenses | 18,044 | 21,111 | ||||||
| Loss from operations | (8,118 | ) | (6,158 | ) | ||||
| Interest expense | (577 | ) | (383 | ) | ||||
| Other income, net | 623 | 226 | ||||||
| Loss before benefit for income taxes | (8,072 | ) | (6,315 | ) | ||||
| Income tax benefit | 74 | 579 | ||||||
| Net loss and comprehensive loss | (7,998 | ) | (5,736 | ) | ||||
| Basic loss per share | $ | (0.19 | ) | $ | (0.15 | ) | ||
| Diluted loss per share | $ | (0.19 | ) | $ | (0.15 | ) | ||
| Basic weighted-average shares outstanding | 41,903,616 | 39,450,502 | ||||||
| Diluted weighted-average shares outstanding | 41,903,616 | 39,450,502 | ||||||
| LULU’S FASHION LOUNGE HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share and per share data) | ||||||||
| 2025 | 2024 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 8,616 | $ | 4,460 | ||||
| Accounts receivable | 4,125 | 2,158 | ||||||
| Inventory, net | 39,668 | 34,036 | ||||||
| Assets for recovery | 5,019 | 2,383 | ||||||
| Income tax refund receivable, net | 1,160 | 4,177 | ||||||
| Prepaids and other current assets | 4,139 | 4,287 | ||||||
| Total current assets | 62,727 | 51,501 | ||||||
| Property and equipment, net | 3,420 | 3,642 | ||||||
| 7,056 | 7,056 | |||||||
| Tradename | 18,509 | 18,509 | ||||||
| Intangible assets, net | 2,714 | 2,762 | ||||||
| Lease right-of-use assets | 19,224 | 24,030 | ||||||
| Other noncurrent assets | 691 | 698 | ||||||
| Total assets | $ | 114,341 | $ | 108,198 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 10,271 | $ | 10,991 | ||||
| Accrued expenses and other current liabilities | 28,254 | 15,985 | ||||||
| Returns reserve | 17,698 | 9,765 | ||||||
| Stored-value card liability | 19,012 | 17,883 | ||||||
| Revolving line of credit | 10,090 | 13,090 | ||||||
| Lease liabilities, current | 6,426 | 6,611 | ||||||
| Total current liabilities | 91,751 | 74,325 | ||||||
| Lease liabilities, noncurrent | 15,170 | 19,653 | ||||||
| Other noncurrent liabilities | 868 | 852 | ||||||
| Total liabilities | 107,789 | 94,830 | ||||||
| Stockholders' equity: | ||||||||
| Preferred stock: | — | — | ||||||
| Common stock: | 43 | 42 | ||||||
| Additional paid-in capital | 263,733 | 262,313 | ||||||
| Accumulated deficit | (256,489 | ) | (248,491 | ) | ||||
| (735 | ) | (496 | ) | |||||
| Total stockholders' equity | 6,552 | 13,368 | ||||||
| Total liabilities and stockholders' equity | $ | 114,341 | $ | 108,198 | ||||
| LULU’S FASHION LOUNGE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) | ||||||||
| Thirteen Weeks Ended | ||||||||
| 2025 | 2024 | |||||||
| Cash Flows from Operating Activities | ||||||||
| Net loss | $ | (7,998 | ) | $ | (5,736 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 1,351 | 1,339 | ||||||
| Noncash lease expense | 1,295 | 970 | ||||||
| Gain on lease modification | (92 | ) | — | |||||
| Amortization of debt discount and debt issuance costs | 31 | 39 | ||||||
| Equity-based compensation expense | 1,474 | 1,934 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (1,967 | ) | (1,670 | ) | ||||
| Inventories | (5,632 | ) | (5,799 | ) | ||||
| Assets for recovery | (2,636 | ) | (1,951 | ) | ||||
| Income taxes (receivable) payable | 3,017 | (379 | ) | |||||
| Prepaid and other current assets | 118 | 82 | ||||||
| Accounts payable | (740 | ) | (549 | ) | ||||
| Accrued expenses and other current liabilities | 21,198 | 20,053 | ||||||
| Operating lease liabilities | (1,113 | ) | (939 | ) | ||||
| Other noncurrent liabilities | 16 | (447 | ) | |||||
| Net cash provided by operating activities | 8,322 | 6,947 | ||||||
| Cash Flows from Investing Activities | ||||||||
| Capitalized software development costs | (427 | ) | (397 | ) | ||||
| Purchases of property and equipment | (140 | ) | (562 | ) | ||||
| Net cash used in investing activities | (567 | ) | (959 | ) | ||||
| Cash Flows from Financing Activities | ||||||||
| Proceeds from borrowings on revolving line of credit | — | 10,000 | ||||||
| Repayments on revolving line of credit | (3,000 | ) | (12,000 | ) | ||||
| Proceeds from issuance of common stock under Employee Stock Purchase Plan (ESPP) | 88 | 167 | ||||||
| Principal payments on finance lease obligations | (318 | ) | (743 | ) | ||||
| Payments for tax withholdings related to vesting of RSUs | (130 | ) | (429 | ) | ||||
| Repurchase of common stock | (239 | ) | — | |||||
| Net cash used in financing activities | (3,599 | ) | (3,005 | ) | ||||
| Net increase in cash and cash equivalents | 4,156 | 2,983 | ||||||
| Cash and cash equivalents at beginning of period | 4,460 | 2,506 | ||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 8,616 | $ | 5,489 | ||||
Webcast & Conference Call Information
The Company will host a conference call and live webcast with the investment community at
About Lulus
Headquartered in
Forward-Looking Statements
This press release contains “forward-looking statements” within the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical or current fact included in this press release are forward-looking statements, including but not limited to statements regarding our opportunities for growth, the long-term growth trajectory of our business, the intended impact of cost-reduction measures and our financial outlook for the second fiscal quarter ending
Use of Non-GAAP Financial Measures and Other Operating Metrics
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure that we calculate as net loss before interest expense, income taxes, depreciation and amortization, adjusted to exclude the effects of equity-based compensation expense and other non-routine expenses. Adjusted EBITDA is a key measure used by management to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis and, in the case of exclusion of the impact of equity-based compensation, excludes items that we do not consider to be indicative of our core operating performance.
Adjusted EBITDA Margin
Adjusted EBITDA Margin is a non-GAAP financial measure that we calculate as Adjusted EBITDA (as defined above) as a percentage of our net revenue.
Active Customers
We define Active Customers as the number of customers who have made at least one purchase across our platform in the prior 12-month period. Active Customer count is measured as of the last day of the relevant period. We consider the number of Active Customers to be a key performance metric on the basis that it is directly related to consumer awareness of our brand, our ability to attract visitors to our digital platform, and our ability to convert visitors to paying customers. Active Customer counts are based on deduplication logic using customer account and guest checkout name, address, and email information.
Average Order Value
We define AOV as the sum of the total gross sales before returns across our platform in a given period, plus shipping revenue, less discounts and markdowns, divided by the Total Orders Placed (as defined below) in that period. AOV reflects the average basket size of our customers. AOV may fluctuate as we continue investing in the development and introduction of new Lulus merchandise and as a result of our promotional discount activity.
Free Cash Flow
Free Cash Flow is a non-GAAP financial measure that we calculate as net cash provided by operating activities less cash used for capitalized software development costs and purchases of property and equipment. We view Free Cash Flow as an important indicator of our liquidity because it measures the amount of cash we generate.
Gross Margin
We define Gross Margin as gross profit as a percentage of our net revenue. Gross profit is equal to our net revenue less cost of revenue. Certain of our competitors and other retailers report cost of revenue differently than we do. As a result, the reporting of our gross profit and Gross Margin may not be comparable to other companies.
Net Debt
Net Debt is a non-GAAP financial measure that is defined as total debt, which currently consists of the revolving line of credit, less cash and cash equivalents. We consider Net Debt to be an important supplemental measure of our financial position, which allows us to analyze our leverage.
Total Orders Placed
We define Total Orders Placed as the number of customer orders placed across our platform during a particular period. An order is counted on the day the customer places the order. We do not adjust the number of Total Orders Placed for any cancellation or return that may have occurred subsequent to a customer placing an order. We consider Total Orders Placed as a key performance metric on the basis that it is directly related to our ability to attract and retain customers as well as drive purchase frequency. Total Orders Placed, together with AOV, is an indicator of the net revenue we expect to generate in a particular period.
| LULU’S FASHION LOUNGE HOLDINGS, INC. KEY OPERATING AND FINANCIAL METRICS (Unaudited) | ||||||||
| Thirteen Weeks Ended | ||||||||
| (13 weeks) | (13 weeks) | |||||||
| (In thousands, except Average Order Value and percentages) | ||||||||
| Gross Margin | 40.3 | % | 42.3 | % | ||||
| Net loss | $ | (7,998 | ) | $ | (5,736 | ) | ||
| Adjusted EBITDA | $ | (4,670 | ) | $ | (2,659 | ) | ||
| Adjusted EBITDA Margin | (7.3 | )% | (3.4 | )% | ||||
| Average Order Value | $ | 136 | $ | 143 | ||||
| Active Customers | 2,550 | 2,770 | ||||||
Note: Refer to “Use of Non-GAAP Financial Measures and Other Operating Metrics” section above for definitions of these metrics.
LULU’S FASHION LOUNGE HOLDINGS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited)
A reconciliation to non-GAAP Net Debt from total debt as of
| As of | ||||||||
| (In thousands) | ||||||||
| Total debt (1) | $ | (10,090 | ) | $ | (13,090 | ) | ||
| Cash and cash equivalents | 8,616 | 4,460 | ||||||
| Net Debt | $ | (1,474 | ) | $ | (8,630 | ) | ||
| (1) | Consists of the revolving line of credit |
A reconciliation to non-GAAP Adjusted EBITDA from net loss for the thirteen weeks ended
| Thirteen Weeks Ended | ||||||||
| (13 weeks) | (13 weeks) | |||||||
| (In thousands, except percentages) | ||||||||
| Net loss | $ | (7,998 | ) | $ | (5,736 | ) | ||
| Excluding: | ||||||||
| Depreciation and amortization | 1,351 | 1,339 | ||||||
| Interest expense | 577 | 383 | ||||||
| Income tax benefit | (74 | ) | (579 | ) | ||||
| Equity-based compensation expense (1) | 1,474 | 1,934 | ||||||
| Adjusted EBITDA | $ | (4,670 | ) | $ | (2,659 | ) | ||
| Net loss margin | (12.5 | )% | (7.4 | )% | ||||
| Adjusted EBITDA Margin | (7.3 | )% | (3.4 | )% | ||||
| (1) | The thirteen weeks ended |
A reconciliation to non-GAAP Free Cash Flow from net cash provided by operating activities for the thirteen weeks ended
| Fiscal Quarters Ended | ||||||||
| (13 weeks) | (13 weeks) | |||||||
| Net cash provided by operating activities | $ | 8,322 | $ | 6,947 | ||||
| Capitalized software development costs | (427 | ) | (397 | ) | ||||
| Purchases of property and equipment | (140 | ) | (562 | ) | ||||
| Free Cash Flow | $ | 7,755 | $ | 5,988 | ||||
Contact
investors@lulus.com
