Lulu's Fashion Lounge (LVLU) investor relations material

Executive summary

• Net revenue for Q2 2025 was $81.5M, down 11% year-over-year, mainly due to a 16% drop in total orders, partially offset by a 1% increase in average order value and lower return rates; softness in casualwear and footwear was offset by gains in special occasion and bridesmaid categories.

• Net loss narrowed to $3.0M from $10.8M last year; Adjusted EBITDA turned positive at $0.5M versus a $0.2M loss in Q2 2024.

• Brand equity reached a record high, supported by successful marketing campaigns and influencer collaborations.

• The company implemented a 1-for-15 reverse stock split effective July 7, 2025, regaining compliance with Nasdaq's minimum bid price requirement.

• Liquidity remains a concern, with $1.5M in cash and $5.8M outstanding under the credit facility as of June 29, 2025; the company is actively seeking alternative debt financing and negotiating a new asset-based revolving credit facility.

Financial highlights

• Net revenue declined 11% year-over-year to $81.5M, with gross margin at 45.3% (down 20 bps year-over-year but up from 40.3% in Q1); gross profit was $36.9M, down 12% year-over-year.

• Net loss improved to $3.0M from $10.8M in Q2 last year; Adjusted EBITDA was $0.5M, up from a $0.2M loss; Adjusted EBITDA margin was 0.6%.

• Free cash flow was negative $1.9M for Q2, a decrease year-over-year; for the first half of 2025, free cash flow was $5.9M, down from $9.0M in the prior year period.

• Operating expenses declined 15% year-over-year; selling and marketing expenses decreased 12%, and general and administrative expenses fell 18%.

• Total debt reduced to $5.8M; net debt at $4.2M as of June 29, 2025.

Outlook and guidance

• Expects to generate positive adjusted EBITDA in Q3 2025 and continues to focus on liquidity, cost efficiencies, and capital expenditures at the low end of the $2.5M–$3M range.

• Anticipates further margin benefits from direct sourcing and ongoing tariff mitigation strategies in the second half of the year.

• Outlook remains cautious due to anticipated headwinds from tariffs, inflation, supply chain, and macroeconomic uncertainties.