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]

Core Insights - Lulus is launching a multi-phased brand campaign aimed at enhancing its position as a leading dress destination, starting during International Women's Month and running for three months [1][2] - The campaign focuses on emotional storytelling and product-driven messaging to foster brand affinity and long-term customer loyalty [1][2] Brand Strategy - The campaign is a strategic investment in customer engagement, aiming to deepen relationships with both existing and new customers while enhancing brand perception [2][10] - Lulus emphasizes creating experiences rather than just selling products, which is expected to drive brand loyalty and lifetime value [2][10] Marketing Execution - The campaign will utilize a diversified strategy that includes influencer collaborations, customer-facing events, and expanded out-of-home marketing to reach new customers [3][8] - Each phase of the campaign will align with key consumer touchpoints, focusing on moments in a woman's life where fashion plays a significant role [6][9] Out-of-Home Advertising - Lulus is extending its out-of-home advertising efforts, including prime billboard placements in high-traffic areas such as New York's Times Square and near college campuses [7][8] - The previous year's campaign significantly increased brand recall, and this year's initiative aims to build on that success by engaging audiences beyond digital channels [7][8] Growth and Collaborations - The campaign reflects Lulus' commitment to building a differentiated brand experience and leveraging its strong digital presence for profitable growth [9][10] - Recent collaborations with brands like Nuuly, Poshmark, and Nordstrom are expected to enhance product offerings and expand brand visibility [9][10]

Core Viewpoint - Lulu's Fashion Lounge Holdings, Inc. will release its fourth quarter and full year 2024 financial results on March 27, 2025, after market close, followed by a conference call with the investment community [1] Financial Results Announcement - The financial results and live webcast will be accessible through the Investor Relations section of the Company's website [2] - A conference call will be held at 5:00 p.m. Eastern Time on the same day [1] Conference Call Details - To access the call, U.S. callers can dial 1-877-407-0792, while international callers can use 1-201-689-8263 [2] - A replay of the conference call will be available for seven days after the call [3] - The access code for the replay is 13750832 [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 [4] - Founded in 1996, Lulus utilizes direct consumer feedback to refine product offerings and enhance customer experience [4] - The company emphasizes exceptional customer service through personal stylists and a bridal concierge [4]

Core Insights - Lulus is expanding its distribution strategy through collaborations with Nuuly, Poshmark, and Von Maur, as well as enhancing relationships with Dillard's and Nordstrom to become the go-to destination for dresses [1][2][4] Distribution Expansion - The company is focusing on reaching new customers by tapping into rental and resale markets, with partnerships aimed at engaging modern consumers [3][4] - Collaborations with Poshmark and Nuuly are designed to position Lulus within the growing resale and rental economies, appealing to a younger audience [3][4] Retail Partnerships - Lulus is strengthening its relationships with key department stores, expanding product assortments at Nordstrom and increasing prom collections at Dillard's from a 30-store to a 60-store footprint [4][5] - The company is also entering new markets through collaborations with additional department stores like Von Maur [4] Brand Positioning - Lulus aims to be the premier destination for dresses, offering options for various occasions, and is hosting exclusive in-store activations to enhance customer experience [5][6] - The company is leveraging partnerships with iconic brands to provide a curated shopping experience, building on the success of previous collaborations [6][8] Long-term Strategy - The wholesale strategy is part of a broader growth plan, focusing on sustainable long-term brand growth and customer engagement [8] - By expanding across various retail platforms, Lulus aims to increase brand discovery, deepen customer loyalty, and reach new audiences [8]

Financial Data and Key Metrics Changes - Net revenue for Q3 2024 was $81 million, a 3% decrease year-over-year, with adjusted EBITDA showing a loss of $3.6 million compared to a gain of $1 million in the prior year [12][40][41] - Gross margin decreased by 220 basis points to 38.1% due to higher markdowns and discounts [22][41] - Net loss increased to $6.9 million, up $3 million year-over-year, primarily due to lower net revenue and reduced gross margin rates [43] Business Line Data and Key Metrics Changes - Special occasion and bridesmaid dress categories saw net sales grow nearly 40% year-over-year, while total dress sales increased by 6% over Q3 2023 [15][40] - The casualwear segment faced challenges, prompting a reassessment to align better with core strengths in event-focused apparel [11][20] - The separates and shoe business remained challenged, driving the majority of year-over-year declines in net sales [20] Market Data and Key Metrics Changes - Wholesale gross revenue increased by 28% compared to Q3 last year, with a strategic collaboration with Dillard's enhancing market presence [19] - International sales achieved high double-digit growth for the third consecutive quarter across the top 15 countries outside the U.S. [29] Company Strategy and Development Direction - The company is focusing on enhancing brand awareness, customer engagement, and disciplined cost reduction efforts to position for sustainable growth [53] - Strategic initiatives include optimizing the data-driven merchandising model, improving customer insights, and leveraging technology for better decision-making [13][14][30] - A commitment to reducing SKU count by 10% to 25% to create a more curated offering in separates and shoes [56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to growth, particularly in dresses and wholesale businesses, while acknowledging the need to reset the casualwear segment [25][53] - The company is actively pursuing alternative debt financing options to enhance flexibility [11][48] - Preliminary results for October indicate a mid-single-digit decline in net revenue year-over-year, with expectations for a 7% to 10% decline in Q4 [49][50] Other Important Information - The company reduced capital expenditure expectations for the year from $3.5 million to $3.2 million [24][52] - Inventory levels were well managed, down 7% year-over-year, outperforming the net revenue decline [17][46] Q&A Session Summary Question: Reevaluation of strategy focusing on event wear versus casual wear - Management indicated a narrowing of assortment to create a more curated offering, expecting a SKU count reduction of 10% to 25% [56] Question: Additional liquidity generation levers - Management discussed headcount reductions, pay adjustments, and renegotiation of vendor contracts as measures to improve liquidity [58][60] Question: Impact of markdowns and promotions on gross margin - Management acknowledged that markdowns were driven by both product assortment needs and liquidity generation, expecting this trend to continue into Q4 [62] Question: Performance of physical retail - Wholesale business has been strong, with double-digit comps, and the Melrose store serves as a brand activation center [64] Question: Health of the consumer and competitive landscape - Management noted a dependency on China for sourcing but is diversifying to mitigate potential tariff impacts, while also addressing competitive pressures through inventory resets [68][70]

Significant Sequential Quarterly Net Revenue Comp Improvement with Q3 Reaching Negative Low Single Digits Updated Outlook for Q4 and Fiscal Year 2024 CHICO, Calif., Nov. 13, 2024 (GLOBE NEWSWIRE) -- Lulu’s Fashion Lounge Holdings, Inc. (“Lulus” or the “Company”) (Nasdaq: LVLU) today reported financial results for the third quarter ended September 29, 2024. Crystal Landsem, CEO of Lulus, said: “Third quarter net revenue came in ahead of our outlook, driven by record growth in special occasion and bridesmaid ...

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]