Lulu's Fashion Lounge (LVLU) Q2 2025 earnings summary

Executive summary

• Net revenue for Q2 2025 was $81.5 million, down 11% year-over-year, mainly due to a 16% decrease in total orders, with softness in casual wear and footwear offset by gains in special occasion and bridesmaid dresses.

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

• Active customers declined to 2.46 million, and brand engagement reached record highs, supported by influencer campaigns and new wholesale partnerships.

• The company implemented a 1-for-15 reverse stock split effective July 7, 2025, regaining Nasdaq compliance.

• Liquidity remains a concern, with $1.5 million in cash, $5.8 million outstanding under the credit facility, and active negotiations for a new asset-based revolving credit facility.

Financial highlights

• Net revenue was $81.5 million, down 11% year-over-year, with gross margin at 45.3%, nearly flat year-over-year but up sequentially from Q1 2025.

• Net loss improved to $3.0 million from $10.8 million in Q2 2024; Adjusted EBITDA was $0.5 million, up from a $0.2 million loss last year.

• Free cash flow was negative $1.9 million for Q2 2025, down from positive $3.0 million in the prior year.

• Operating expenses and general and administrative expenses declined significantly year-over-year, driven by cost controls and reduced headcount.

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

Outlook and guidance

• Expectation to generate positive adjusted EBITDA in Q3 2025 and continued focus on liquidity, cost efficiency, and capital expenditures projected at $2.5 million for the full year.

• Ongoing efforts to mitigate tariff impacts through sourcing diversification and direct sourcing, with more material benefits expected in the second half of the year.

• Management remains cautious due to macroeconomic headwinds, including inflation, interest rates, and consumer confidence.