Lulus Corporation's Q2 2025 Financial Results Presentation Script
Lulu’s Fashion Lounge Holdings Inc. Reports Q2 2025 Financial Results
Lulu’s Fashion Lounge Holdings Inc., under the leadership of CEO Crystal Landsem, has released its financial results for Q2 2025. The company reported a net revenue of $81.5 million, a 11% year-over-year decline due to a 16% decrease in total orders placed, partially offset by a 1% increase in average order value.
The gross margin stood at 45.3%, a slight decrease of 20 basis points compared to the prior year, with gross profit declining 12% to $36.9 million. Product-related margins improved, but logistics costs increased due to higher shipping rates and fuel surcharges.
Despite the revenue declines, the company managed to generate positive adjusted EBITDA for the second quarter of 2025, a significant improvement from a $200,000 loss in the prior year. Selling and marketing expenses decreased by about $2.9 million year-over-year to $22 million, and general and administrative expenses fell 18% to $17.5 million due to lower labor and equity compensation costs.
The net loss was $3.0 million, a significant improvement from $10.8 million in fiscal Q2 2024, reflecting improved operational efficiency and margin management.
The Love Rewards loyalty program achieved double-digit membership growth year-over-year in fiscal Q2 2025. Brand equity also reached a new all-time high in the same quarter.
In an effort to manage potential tariff impacts, the company is actively collaborating with vendors, diversifying sourcing, implementing strategic pricing, and advancing its direct sourcing strategy. The practice of direct sourcing, procuring goods directly from manufacturers or factories, is being implemented by the company.
Lulu’s is also working on refinancing efforts, including negotiating a new asset-based revolving credit facility, and expects continued positive adjusted EBITDA going forward. Full-year capital expenditures are now expected to be $2,500,000 for fiscal 2025.
The company is making strides in streamlining its product offerings through SKU rationalization, the process of reducing the number of unique products in an assortment. The shoes and separates categories underperformed, contributing to a 11% year-over-year net revenue decline in fiscal Q2 2025. However, the company saw growth in special occasion and bridesmaids categories.
The earnings report for fiscal Q2 2025 was released on Wednesday, Aug. 13, 2025 at 5 p.m. ET. Net debt was $4,200,000 at the end of fiscal Q2 2025, a $4,400,000 reduction from $8,600,000 at the end of fiscal Q4 2024. Inventory was $37,300,000 at the end of fiscal Q2 2025, a decrease of about $300,000 year-over-year.
Management reiterated its intent to double the direct sourcing sales mix by fiscal 2025 year-end. Return rates improved by 114 basis points in fiscal Q2 2025. Interest expense rose to $856,000 in fiscal Q2 2025, including one-time fees related to credit agreement amendments.
Mark Vos serves as the President and Chief Information Officer, while Naomi Beckman-Straus is the General Counsel and Corporate Secretary of the company. The company added three new major partners and expanded with boutique retailers in the wholesale channel.
Management affirmed the expectation for positive adjusted EBITDA and continued progress on refinancing efforts in Q3 2025. Net cash used in operating activities (GAAP) was $1,400,000 in fiscal Q2 2025, compared to $3,700,000 provided in fiscal Q2 2024. The gross margin was 45.3% in fiscal Q2 2025, nearly flat year-over-year, but improved sequentially from 40.3% in fiscal Q1 2025.
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