Lulu's Fashion Lounge Reports 17% Revenue Decline and Increased Net Loss in Latest Quarter

Lulu's Fashion Lounge Holdings, Inc. reported a net revenue of $64.2 million for the thirteen weeks ended March 30, 2025, a decrease of 17% compared to $77.3 million in the same period last year. The company's gross profit also fell to $25.8 million, down 21% from $32.6 million, primarily due to a 17% decline in total orders placed and a decrease in average order value (AOV) from $143 to $136. The company incurred a net loss of $8.0 million, compared to a loss of $5.7 million in the prior year, reflecting increased operational challenges and market conditions.

In terms of operational metrics, Lulu's active customer count decreased to 2.55 million from 2.77 million year-over-year. The company attributed the decline in revenue and customer engagement to macroeconomic factors affecting consumer spending, including inflation and changing shopping behaviors. Selling and marketing expenses were reduced by 10% to $15.9 million, while general and administrative expenses decreased by 15% to $18.0 million, reflecting cost-cutting measures implemented by the company.

Lulu's balance sheet showed total assets of $114.3 million as of March 30, 2025, up from $108.2 million at the end of the previous fiscal year. Cash and cash equivalents increased to $8.6 million, compared to $4.5 million at the end of December 2024. However, total liabilities also rose to $107.8 million, primarily due to an increase in accrued expenses and other current liabilities, which reached $28.3 million, up from $16.0 million. The company has been actively managing its debt, repaying $3.0 million of its revolving line of credit during the quarter.

Strategically, Lulu's has been consolidating its distribution facilities to improve operational efficiency. The company modified the terms of two operating leases, resulting in a derecognition of related right-of-use assets and lease liabilities totaling approximately $3.1 million. Additionally, Lulu's has initiated a stock repurchase program, repurchasing 242,068 shares during the quarter, with $1.8 million remaining under the program authorization.

Looking ahead, Lulu's management expressed uncertainty regarding the company's ability to continue as a going concern, citing challenges in raising additional debt financing and the need for ongoing cash conservation measures. The company is focused on adjusting its marketing and operational strategies to stimulate customer demand and improve financial performance in the upcoming quarters.