Lulus Reports Fourth Quarter and Fiscal Year 2024 Results
Cost Reductions Resulted in 175bp Reduction of Total Expenses as a Percent of Net Revenue in 4Q'24
Outlook for Fiscal Year 2025 Emphasizes Growth in Operating Cash Flow
CHICO, Calif., March 27, 2025 (GLOBE NEWSWIRE) -- Lulu's Fashion Lounge Holdings, Inc. ("Lulus" or the "Company") (NASDAQ:LVLU) today reported financial results for the fourth quarter and fiscal year ended December 29, 2024 and issued its financial outlook for the fiscal year ending December 28, 2025.
Crystal Landsem, CEO of Lulus, said:
"In the fourth quarter, we delivered positive sales growth in our special occasion, bridesmaid, and bridal categories, reinforcing our strength in event dressing despite the seasonally slower sales period. These gains in our occasion dress categories were offset by continued softness in casual wear, which we are actively repositioning to better align with our core focus on event attire. Building on our cost reduction efforts, we successfully completed the consolidation of our West Coast distribution facilities in late February 2025.
We have also expanded our strategic wholesale partnerships to support our focus on meeting customers across diverse shopping channels, while maintaining an efficient, scalable growth model. With continued investment in our brand and diversification of our supply chain and selling channels, optimization of product margin, and a more streamlined cost structure, we believe we can drive a pronounced growth in operating cash flow in 2025."
Fiscal Year 2024 Highlights:
Net revenue of $315.9 million, an 11% decrease compared to 2023, driven by a 12% decrease in Total Orders Placed and higher return rates offset by a 3% increase in Average Order Value ("AOV") from $133 to $137, compared to 2023.
Active Customers of 2.6 million, a 7% decrease compared to 2.8 million in 2023.
Gross profit decreased 12% to $130.2 million and Gross Margin decreased 50 basis points to 41.2%, in each case compared to 2023.
Net loss of $55.3 million, compared to net loss of $19.3 million in 2023. Included in this net loss was a non-cash goodwill impairment charge of $28.4 million. Excluding the non-cash goodwill impairment charge, our net loss was $26.9 million.
Adjusted EBITDA* of ($9.7) million, compared to $3.2 million in 2023.
Net cash provided by operating activities of $2.6 million, compared to $15.4 million in 2023.
Free Cash Flow* of ($0.3) million, compared to $11.5 million in 2023.
Total debt and Net Debt* increased by $5.1 million and $3.1 million, respectively, during the fifty-two weeks ended December 29, 2024.
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.
Tiffany Smith, CFO of Lulus, said:
"The implementation of our cost reduction plans allowed us to deliver the narrowest quarterly net loss, excluding goodwill impairment, of the past six quarters. Selling, marketing, and general and administrative expenses in Q4 were $5.5 million lower year-over-year, a 15% decline that outpaced our 12% decline in net revenue. To further optimize costs, we consolidated our West Coast distribution facilities, a process which began in late Q4 2024 and was completed in Q1 2025. With major cost reduction initiatives in place, we remain committed to ongoing and disciplined cost management.
Looking ahead, in 2025, we remain focused on strengthening our cash position, returning to profitability, and maintaining healthy inventory turns. Our 2025 net revenue outlook reflects our expectation of continued momentum in special occasion and event wear, tempered by the ongoing repositioning of our casual categories. With a healthy inventory position, we anticipate reduced markdowns and margin expansion. Direct-to-factory initiatives can further bolster our margins in the latter part of 2025, and more significantly in 2026, giving us confidence in our long-term sales and profitability targets."
Fourth Quarter 2024 Highlights:
Net revenue of $66.1 million, a decrease of 12% compared to $75.0 million in the same period last year, driven by a 12% decrease in Total Orders Placed and a 5% decrease in AOV from $136 to $129, which was offset by improved return rates.
Gross profit decreased 15% to $25.1 million and Gross Margin decreased 120 basis points to 37.9%, in each case compared to the same period last year.
Net loss of $31.9 million, compared to net loss of $7.2 million in the same period last year. Included in this net loss was a non-cash goodwill impairment charge of $28.4 million. Excluding the non-cash goodwill impairment charge, our net loss was $3.5 million.
Adjusted EBITDA* of ($3.3) million, compared to ($2.0) million in the same period last year.
Net cash used in operating activities of $2.5 million, improved from $5.7 million in the same period last year.
Free Cash Flow* of ($3.0) million, improved from ($6.7) million in the same period last year.
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.
Financial Outlook for Fiscal Year 2025:
We expect net revenue to be between $280 million and $310 million, which represents a decrease of between 11% and 2% compared to 2024.
We expect Adjusted EBITDA to be between $0 and $6 million, which represents an increase of between $9.7 million and $15.7 million compared to 2024.
We expect capital expenditures to be between $2.5 million and $3.0 million, which represents a decrease of 13% or approximately flat compared to 2024.
We expect our Net Debt position for the first quarter of 2025 to be between $3 million and $4 million, and we expect to be operating cash flow positive in 2025, including in the first quarter of 2025.
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 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 U.S. presidential administration, tariffs or bans, existing and future laws, regulations, and directives (including executive orders), as well as other world events, wars, and domestic and international conflicts that affect overall consumer confidence and the predictability of consumer purchasing behavior, Lulus' financial outlook is subject to change.
LULU'S FASHION LOUNGE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
(In thousands, except share and per share data)
Fiscal Quarters Ended
Fiscal Years Ended
December 29,
December 31,
December 29,
December 31,
2024
2023
2024
2023
(13 weeks)
(13 weeks)
(52 weeks)
(52 weeks)
Net revenue
$
66,147
$
74,959
$
315,887
$
355,175
Cost of revenue
41,077
45,615
185,639
206,949
Gross profit
25,070
29,344
130,248
148,226
Selling and marketing expenses
12,696
15,328
72,927
76,312
General and administrative expenses
18,918
21,810
81,334
92,129
Goodwill impairment
28,374
—
28,374
—
Loss from operations
(34,918
)
(7,794
)
(52,387
)
(20,215
)
Interest expense
(313
)
(337
)
(1,271
)
(1,728
)
Other income, net
(74
)
217
705
933
Loss before benefit (provision) for income taxes
(35,305
)
(7,914
)
(52,953
)
(21,010
)
Income tax benefit (provision)
3,430
684
(2,333
)
1,676
Net loss and comprehensive loss
(31,875
)
(7,230
)
(55,286
)
(19,334
)
Basic loss per share
$
(0.76
)
$
(0.18
)
$
(1.33
)
$
(0.48
)
Diluted loss per share
$
(0.76
)
$
(0.18
)
$
(1.33
)
$
(0.48
)
Basic weighted-average shares outstanding
41,799,301
40,451,597
41,468,903
39,879,121
Diluted weighted-average shares outstanding
41,799,301
40,451,597
41,468,903
$
39,879,121
LULU'S FASHION LOUNGE HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share and per share data)
December 29,
December 31,
2024
2023
Assets
Current assets:
Cash and cash equivalents
$
4,460
$
2,506
Accounts receivable
2,158
3,542
Inventory, net
34,036
35,472
Assets for recovery
2,383
3,111
Income tax refund receivable, net
4,177
2,510
Prepaids and other current assets
4,287
5,379
Total current assets
51,501
52,520
