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 31, 2023.
Crystal Landsem, CEO of Lulus, said:
"We continue to be focused on delivering on our
core strategic pillars of improving Lulus brand awareness and
broadening our reach and customer touchpoints, and are encouraged
by the sequential upward revenue momentum building at the end of
2023 and into the first two months of 2024. Strong customer demand
for our new and novelty products, resulting in positive sales in
several of our high-volume categories, further strengthens our
future reorder product funnel. In addition, our inventory levels
were in line with sales in Q4, reflecting the agility of our data
driven business model. Our strong balance sheet and ability to
generate cash flow supported a $17 million reduction in our
revolver balance in 2023. We are optimistic about our opportunities
for growth in the coming quarters as we continue to improve our
operational efficiency, innovation, and product offering."
Fiscal Year 2023 Highlights:
- Net revenue of $355.2 million, a
19% decrease compared to 2022, driven by an 18% decrease in Total
Orders Placed with higher return rates offset by higher Average
Order Value (“AOV”) compared to 2022.
- Active Customers of 2.8 million, a
12% decrease compared to 3.2 million in 2022.
- AOV of $133, an increase of 2%
compared to $131 in 2022.
- Gross Margin decreased 180 basis
points to 41.7% and gross profit decreased 23%, in each case
compared to 2022.
- Net loss of $19.3 million, compared
to net income of $3.7 million in 2022.
- Adjusted EBITDA (non-GAAP financial
measure defined below) of $3.2 million, compared to $29.1 million
in 2022.
- Net cash provided by operating
activities was $15.4 million, compared to $6.2 million in
2022.
- Free Cash Flow (non-GAAP financial
measure defined below) was $11.5 million, compared to $1.2 million
in 2022.
- Total debt, comprised of the
revolving line of credit, decreased by $17 million during fiscal
year 2023 resulting in a total debt position of $8 million at the
end of 2023.
- Net Debt (non-GAAP financial
measure defined below) decreased by $9.3 million during fiscal year
2023 resulting in a Net Debt position of $5.5 million at the end of
2023.
|
|
Fiscal Years Ended |
|
|
December 31, 2023 |
|
January 1, 2023 |
|
YoY Change |
|
|
(52 weeks) |
|
(52 weeks) |
|
|
|
|
|
(In thousands, except percentages) |
Net revenue |
|
$ |
355,175 |
|
|
$ |
439,652 |
|
|
(19 |
)% |
|
Gross profit |
|
$ |
148,226 |
|
|
$ |
191,446 |
|
|
(23 |
)% |
|
Gross Margin* |
|
|
41.7 |
% |
|
|
43.5 |
% |
|
(180 |
) |
bps |
Net income (loss) |
|
$ |
(19,334 |
) |
|
$ |
3,725 |
|
|
NM |
|
|
Adjusted EBITDA* |
|
$ |
3,231 |
|
|
$ |
29,096 |
|
|
(89 |
)% |
|
Diluted earnings (loss) per
share |
|
$ |
(0.48 |
) |
|
$ |
0.10 |
|
|
NM |
|
|
Active Customers* |
|
|
2,830 |
|
|
|
3,223 |
|
|
(12 |
)% |
|
Net cash provided by operating
activities |
|
$ |
15,421 |
|
|
$ |
6,199 |
|
|
149 |
% |
|
Free Cash Flow* |
|
$ |
11,486 |
|
|
$ |
1,188 |
|
|
867 |
% |
|
NM – not meaningful* Note: Refer to “Use of Non-GAAP Financial
Measures and Other Operating Metrics” section below for definitions
of these metrics.
Tiffany Smith, CFO of Lulus, said:
“The fourth quarter was consistent with seasonal
trends for Lulus, marking our typically lowest sales and profit
quarter of the year. Our fourth quarter net revenue of $75 million
was in line with our expectations for the quarter, while Adjusted
EBITDA was pressured due to the relative increase in fixed costs on
a smaller base. We saw our Gross Margin expand in the fourth
quarter by 180 basis points compared to the same quarter last year,
driven mostly by lower promotional activity and by gains in our AOV
resulting from higher price point product mix, which was partially
offset by higher return rates.”
Fourth Quarter 2023 Highlights:
- Net revenue of $75.0 million, an
18% decrease compared to the fourth quarter of 2022, driven by a
22% decrease in Total Orders Placed with higher return rates offset
by higher AOV compared to the fourth quarter of 2022.
- AOV of $136, an increase of 14%
compared to $119 in the fourth quarter of 2022.
- Gross Margin increased 180 basis
points to 39.1% and gross profit decreased 14%, compared to the
fourth quarter of 2022.
- Net loss of $7.2 million, compared
to $5.2 million in the fourth quarter of 2022.
- Adjusted EBITDA of ($2.0) million,
compared to ($1.0) million in the fourth quarter of 2022.
- Net cash used in operating
activities was $5.7 million, compared to $10.1 million in the
fourth quarter of 2022.
- Free Cash Flow was ($6.7) million,
compared to ($11.4) million in the fourth quarter of 2022.
|
|
Fiscal Quarters Ended |
|
|
December 31, 2023 |
|
January 1, 2023 |
|
YoY Change |
|
|
(13 weeks) |
|
(13 weeks) |
|
|
|
|
|
(In thousands, except percentages) |
Net revenue |
|
$ |
74,959 |
|
|
$ |
90,963 |
|
|
(18 |
)% |
|
Gross profit |
|
$ |
29,344 |
|
|
$ |
33,968 |
|
|
(14 |
)% |
|
Gross Margin* |
|
|
39.1 |
% |
|
|
37.3 |
% |
|
180 |
|
bps |
Net income (loss) |
|
$ |
(7,230 |
) |
|
$ |
(5,246 |
) |
|
38 |
% |
|
Adjusted EBITDA* |
|
$ |
(1,976 |
) |
|
$ |
(972 |
) |
|
103 |
% |
|
Diluted earnings (loss) per
share |
|
$ |
(0.18 |
) |
|
$ |
(0.14 |
) |
|
29 |
% |
|
Active Customers* |
|
|
2,830 |
|
|
|
3,223 |
|
|
(12 |
)% |
|
Net cash used in operating
activities |
|
$ |
(5,679 |
) |
|
$ |
(10,134 |
) |
|
(44 |
)% |
|
Free Cash Flow* |
|
$ |
(6,671 |
) |
|
$ |
(11,374 |
) |
|
(41 |
)% |
|
* Note: Refer to “Use of Non-GAAP Financial Measures and Other
Operating Metrics” section below for definitions of these
metrics.
Financial Outlook for Fiscal Year 2024:
- We expect net revenue to be between
$350 million and $370 million, which represents between a -1.5% and
4.2% increase compared to 2023.
- We expect Adjusted EBITDA to be
between $5 million and $8 million, which represents between a 55%
and 148% increase compared to 2023.
- We expect capital expenditures to
be between $5 million and $6 million, which represents between a
28% and 54% increase compared to 2023.
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, and shipping costs. Given the volatile
nature of current consumer demand and potential for further impacts
to consumer behavior due to pockets of continued inflation, higher
interest rates, the resumption of student loan interest and
payments, combined with less predictable consumer purchasing
behavior, Lulus’ financial outlook is subject to change.
LULU’S FASHION LOUNGE
HOLDINGS, INC.CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)(Unaudited)(In thousands,
except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Quarters Ended |
|
Fiscal Years Ended |
|
|
|
December 31, 2023 |
|
January 1, 2023 |
|
December 31, 2023 |
|
January 1, 2023 |
|
|
|
(13 weeks) |
|
(13 weeks) |
|
(52 weeks) |
|
(52 weeks) |
|
Net revenue |
|
$ |
74,959 |
|
|
$ |
90,963 |
|
|
$ |
355,175 |
|
|
$ |
439,652 |
|
|
Cost of revenue |
|
|
45,615 |
|
|
|
56,995 |
|
|
|
206,949 |
|
|
|
248,206 |
|
|
Gross profit |
|
|
29,344 |
|
|
|
33,968 |
|
|
|
148,226 |
|
|
|
191,446 |
|
|
Selling and marketing
expenses |
|
|
15,328 |
|
|
|
16,466 |
|
|
|
76,312 |
|
|
|
83,559 |
|
|
General and administrative
expenses |
|
|
21,810 |
|
|
|
23,504 |
|
|
|
92,129 |
|
|
|
99,148 |
|
|
Income (loss) from
operations |
|
|
(7,794 |
) |
|
|
(6,002 |
) |
|
|
(20,215 |
) |
|
|
8,739 |
|
|
Interest expense |
|
|
(337 |
) |
|
|
(409 |
) |
|
|
(1,728 |
) |
|
|
(1,103 |
) |
|
Other income, net |
|
|
217 |
|
|
|
34 |
|
|
|
933 |
|
|
|
136 |
|
|
Income (loss) before provision
(benefit) for income taxes |
|
|
(7,914 |
) |
|
|
(6,377 |
) |
|
|
(21,010 |
) |
|
|
7,772 |
|
|
Income tax provision
(benefit) |
|
|
(684 |
) |
|
|
(1,131 |
) |
|
|
(1,676 |
) |
|
|
4,047 |
|
|
Net income (loss) and
comprehensive income (loss) |
|
$ |
(7,230 |
) |
|
$ |
(5,246 |
) |
|
$ |
(19,334 |
) |
|
$ |
3,725 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share |
|
$ |
(0.18 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.48 |
) |
|
$ |
0.10 |
|
|
Diluted earnings (loss) per share |
|
$ |
(0.18 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.48 |
) |
|
$ |
0.10 |
|
|
Basic weighted-average shares outstanding |
|
|
40,451,597 |
|
|
|
38,527,759 |
|
|
|
39,879,121 |
|
|
|
38,583,854 |
|
|
Diluted weighted-average shares outstanding |
|
|
40,451,597 |
|
|
|
38,527,759 |
|
|
|
39,879,121 |
|
|
|
38,853,393 |
|
|
LULU’S FASHION LOUNGE
HOLDINGS, INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(Unaudited)(In thousands,
except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
January 1, |
|
|
|
|
2023 |
|
|
2023 |
|
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
2,506 |
|
|
$ |
10,219 |
|
|
Accounts receivable |
|
|
3,542 |
|
|
|
3,908 |
|
|
Inventory, net |
|
|
35,472 |
|
|
|
43,186 |
|
|
Assets for recovery |
|
|
3,111 |
|
|
|
3,890 |
|
|
Income tax refund receivable |
|
|
2,510 |
|
|
|
4,078 |
|
|
Prepaids and other current assets |
|
|
5,379 |
|
|
|
3,738 |
|
|
Total current assets |
|
|
52,520 |
|
|
|
69,019 |
|
|
Property and equipment, net |
|
|
4,712 |
|
|
|
4,391 |
|
|
Goodwill |
|
|
35,430 |
|
|
|
35,430 |
|
|
Tradename |
|
|
18,509 |
|
|
|
18,509 |
|
|
Intangible assets, net |
|
|
3,263 |
|
|
|
3,090 |
|
|
Lease right-of-use assets |
|
|
29,516 |
|
|
|
32,514 |
|
|
Other noncurrent assets |
|
|
5,495 |
|
|
|
4,251 |
|
|
Total assets |
|
$ |
149,445 |
|
|
$ |
167,204 |
|
|
Liabilities and
Stockholders' Equity |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
|
$ |
8,900 |
|
|
$ |
5,320 |
|
|
Accrued expenses and other current liabilities |
|
|
18,343 |
|
|
|
17,976 |
|
|
Returns reserve |
|
|
7,854 |
|
|
|
9,066 |
|
|
Stored-value card liability |
|
|
13,142 |
|
|
|
10,828 |
|
|
Revolving line of credit |
|
|
8,000 |
|
|
|
— |
|
|
Lease liabilities, current |
|
|
5,648 |
|
|
|
4,456 |
|
|
Total current liabilities |
|
|
61,887 |
|
|
|
47,646 |
|
|
Revolving line of credit, noncurrent |
|
|
— |
|
|
|
25,000 |
|
|
Lease liabilities, noncurrent |
|
|
25,427 |
|
|
|
29,042 |
|
|
Other noncurrent liabilities |
|
|
1,179 |
|
|
|
623 |
|
|
Total liabilities |
|
|
88,493 |
|
|
|
102,311 |
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity: |
|
|
|
|
|
|
|
Preferred stock: $0.001 par value, 10,000,000 shares authorized,
and no shares issued or outstanding |
|
|
— |
|
|
|
— |
|
|
Common stock: $0.001 par value, 250,000,000 shares authorized; and
40,618,206 and 39,259,328 shares issued and outstanding as of
December 31, 2023 and January 1, 2023, respectively |
|
|
41 |
|
|
|
39 |
|
|
Additional paid-in capital |
|
|
254,116 |
|
|
|
238,725 |
|
|
Accumulated deficit |
|
|
(193,205 |
) |
|
|
(173,871 |
) |
|
Total stockholders' equity |
|
|
60,952 |
|
|
|
64,893 |
|
|
Total liabilities and stockholders' equity |
|
$ |
149,445 |
|
|
$ |
167,204 |
|
|
LULU’S FASHION LOUNGE
HOLDINGS, INC.CONDENSED CONSOLIDATED
STATEMENTS OF CASH
FLOWS(Unaudited)(In
thousands) |
|
|
|
|
|
|
|
|
|
Fiscal Years Ended |
|
|
December 31, 2023 |
|
January 1, 2023 |
|
|
(52 weeks) |
|
(52 weeks) |
Cash Flows from
Operating Activities |
|
|
|
|
|
|
Net income (loss) |
|
$ |
(19,334 |
) |
|
$ |
3,725 |
|
Adjustments to reconcile net
income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
4,819 |
|
|
|
4,134 |
|
Noncash lease expense |
|
|
3,663 |
|
|
|
3,257 |
|
Amortization of debt discount and debt issuance costs |
|
|
156 |
|
|
|
157 |
|
Equity-based compensation expense |
|
|
17,694 |
|
|
|
16,087 |
|
Deferred income taxes |
|
|
(2,539 |
) |
|
|
1,658 |
|
Loss on disposal of property and equipment |
|
|
19 |
|
|
|
18 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
|
366 |
|
|
|
1,740 |
|
Inventories |
|
|
7,714 |
|
|
|
(21,010 |
) |
Assets for recovery |
|
|
779 |
|
|
|
(136 |
) |
Income taxes (receivable) payable |
|
|
2,752 |
|
|
|
(4,364 |
) |
Prepaid and other current assets |
|
|
(1,803 |
) |
|
|
694 |
|
Accounts payable |
|
|
3,580 |
|
|
|
1,148 |
|
Accrued expenses and other current liabilities |
|
|
918 |
|
|
|
1,691 |
|
Operating lease liabilities |
|
|
(3,317 |
) |
|
|
(2,608 |
) |
Other noncurrent liabilities |
|
|
(46 |
) |
|
|
8 |
|
Net cash provided by operating activities |
|
|
15,421 |
|
|
|
6,199 |
|
Cash Flows from
Investing Activities |
|
|
|
|
|
|
Capitalized software development costs |
|
|
(2,055 |
) |
|
|
(2,500 |
) |
Purchases of property and equipment |
|
|
(1,880 |
) |
|
|
(2,511 |
) |
Other |
|
|
(68 |
) |
|
|
(112 |
) |
Net cash used in investing activities |
|
|
(4,003 |
) |
|
|
(5,123 |
) |
Cash Flows from
Financing Activities |
|
|
|
|
|
|
Proceeds from borrowings on revolving line of credit |
|
|
13,000 |
|
|
|
30,000 |
|
Repayments on revolving line of credit |
|
|
(30,000 |
) |
|
|
(30,000 |
) |
Proceeds from issuance of common stock under employee stock
purchase plan (ESPP) |
|
|
487 |
|
|
|
— |
|
Principal payments on finance lease obligations |
|
|
(983 |
) |
|
|
(786 |
) |
Payment of offering costs related to the IPO |
|
|
— |
|
|
|
(832 |
) |
Withholding tax payments related to vesting of RSUs |
|
|
(1,629 |
) |
|
|
(1,115 |
) |
Other |
|
|
(6 |
) |
|
|
(32 |
) |
Net cash used in financing activities |
|
|
(19,131 |
) |
|
|
(2,765 |
) |
Net decrease in cash, cash
equivalents and restricted cash |
|
|
(7,713 |
) |
|
|
(1,689 |
) |
Cash, cash equivalents and
restricted cash at beginning of period |
|
|
10,219 |
|
|
|
11,908 |
|
Cash, cash equivalents and
restricted cash at end of period |
|
$ |
2,506 |
|
|
$ |
10,219 |
|
|
|
|
|
|
|
|
Reconciliation of cash, cash
equivalents and restricted cash |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
2,506 |
|
|
$ |
10,219 |
|
Restricted cash |
|
|
— |
|
|
|
— |
|
Total cash, cash equivalents
and restricted cash, end of period |
|
$ |
2,506 |
|
|
$ |
10,219 |
|
Webcast & Conference Call
Information
The Company will host a conference call and live
webcast with the investment community at 5:00 p.m. Eastern Time
today, Wednesday, March 6, 2024, to discuss its fourth quarter and
fiscal year 2023 financial results. The live webcast will be
accessible through the Investor Relations section of the Company’s
website at https://investors.lulus.com/. To access the call through
a conference line, dial 1-877-407-0792 (in the U.S.) or
1-201-689-8263 (international callers). A replay of the conference
call will be posted shortly after the call and will be available
for seven days following the call. To access the replay, dial
1-844-512-2921 (in the U.S.) or 1-412-317-6671 (international
callers). The access code for the replay is 13743842.
About Lulus
Headquartered in California and serving millions
of customers worldwide, Lulus is an attainable luxury fashion brand
for women, offering modern, unapologetically feminine designs at
accessible prices for all of life’s fashionable moments. Our aim is
to make every woman feel beautiful, celebrated and as if she’s the
most special version of herself for every occasion – from work desk
to dream date or cozied up on the couch to the spotlight of her
wedding day. Founded in 1996, Lulus delivers fresh styles to
consumers daily, using direct consumer feedback and insights to
refine product offerings and elevate the customer experience.
Lulus’ world class personal stylists, bridal concierge, and
customer care team share an unwavering commitment to elevating
style and quality and bring exceptional customer service and
personalized shopping to customers around the world. Follow @lulus
on Instagram and @lulus on TikTok. Lulus is a registered trademark
of Lulu’s Fashion Lounge, LLC. All rights reserved.
Forward-Looking Statements
This press release contains “forward-looking
statements” within the Private Securities Litigation Reform Act of
1995. All statements other than statements of historical or current
fact included in this press release are forward-looking statements,
including but not limited to statements regarding our opportunities
for growth in the coming quarters and our financial outlook for the
fiscal year ending December 29, 2024. These statements are
neither promises nor guarantees, but involve known and unknown
risks, uncertainties and other important factors that may cause
Lulus’ actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements, including
but not limited to the following: risks related to our operations
and financial results; our ability to successfully maintain our
desired merchandise assortment or manage our inventory effectively;
demand for our products, including our ability to anticipate,
identify, measure, and respond quickly to fashion trends, customer
preferences and demands; our ability to anticipate, measure and
establish appropriate policies for customer merchandise returns;
general economic conditions, including inflation; our fluctuating
operating results; seasonality in our business; our ability to
acquire products on reasonable terms; our e-commerce business
model; our ability to attract and retain customers in a cost
effective manner; the strength of our brand; competition; fraud;
system interruptions; system security risks including security
breaches; and our ability to fulfill orders. These and other
important factors discussed under the caption “Risk Factors” in
Lulus’ Annual Report on Form 10-K for the fiscal year ended
December 31, 2023, and its other filings with the Securities and
Exchange Commission could cause actual results to differ materially
from those indicated by the forward-looking statements made in this
press release. Any such forward-looking statements represent
management’s estimates as of the date of this press release. While
Lulus may elect to update such forward-looking statements at some
point in the future, it disclaims any obligation to do so, except
as required by law, even if subsequent events cause its views to
change.
Use of Non-GAAP Financial Measures and Other Operating
Metrics
To supplement our condensed consolidated
financial statements, which are prepared and presented in
accordance with accounting principles generally accepted in the
United States of America (“GAAP”), we reference in this press
release and the accompanying tables the following non-GAAP
financial measures: Adjusted EBITDA, Adjusted EBITDA Margin, Net
Debt and Free Cash Flow. The presentation of this non-GAAP
financial information is not intended to be considered in isolation
or as a substitute for, or superior to, the financial information
prepared and presented in accordance with GAAP, and our non-GAAP
measures may be different from non-GAAP measures used by other
companies. We use these non-GAAP financial measures to evaluate our
operating performance, generate future operating plans and make
strategic decisions regarding the allocation of capital. Our
management believes that these non-GAAP financial measures provide
meaningful supplemental information regarding our performance and
liquidity by excluding certain expenses that may not be indicative
of our ongoing core operating performance. We believe that both
management and investors benefit from referring to these non-GAAP
financial measures in assessing our performance and when analyzing
historical performance and liquidity and when planning,
forecasting, and analyzing future periods. For a reconciliation of
these non-GAAP financial measures to GAAP measures, please see the
tables captioned “Reconciliation of Non-GAAP Financial Measures”
included at the end of this release. Definitions of our non-GAAP
financial measures and other operating metrics are presented below.
A reconciliation of Adjusted EBITDA guidance to net (loss) income
on a forward-looking basis cannot be provided without unreasonable
efforts, as we are unable to provide reconciling information with
respect to equity-based compensation expense and income tax, all of
which are adjustments to Adjusted EBITDA. We also use certain key
operating metrics, including Gross Margin, Active Customers,
Average Order Value, and Total Orders Placed.
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure
that we calculate as net (loss) income before interest expense,
income taxes, depreciation and amortization, adjusted to exclude
the effects of equity-based compensation expense. Adjusted EBITDA
is a key measure used by management to evaluate our operating
performance, generate future operating plans and make strategic
decisions regarding the allocation of capital. In particular, the
exclusion of certain expenses in calculating Adjusted EBITDA
facilitates operating performance comparisons on a period-to-period
basis and, in the case of exclusion of the impact of equity-based
compensation, excludes an item that we do not consider to be
indicative of our core operating performance.
Adjusted EBITDA Margin
Adjusted EBITDA Margin is
a non-GAAP financial measure that we calculate as
Adjusted EBITDA (as defined above) as a percentage of our net
revenue.
Active Customers
We define Active Customers as the number of
customers who have made at least one purchase across our platform
in the prior 12-month period. We consider the number of Active
Customers to be a key performance metric on the basis that it is
directly related to consumer awareness of our brand, our ability to
attract visitors to our digital platform, and our ability to
convert visitors to paying customers. Active Customer counts are
based on de-duplication logic using customer account and guest
checkout name, address, and email information.
Average Order Value
We define Average Order Value (“AOV”) as the sum
of the total gross sales before returns across our platform in a
given period, plus shipping revenue, less discounts and markdowns,
divided by the Total Orders Placed (as defined below) in that
period. AOV reflects average basket size of our customers. AOV may
fluctuate as we continue investing in the development and
introduction of new Lulus merchandise and as a result of our
promotional discount activity.
Free Cash Flow
Free Cash Flow is a non-GAAP financial measure
that we calculate as net cash provided by (used in) operating
activities less cash used for capitalized software development
costs and purchases of property and equipment. We view Free Cash
Flow as an important indicator of our liquidity because it measures
the amount of cash we generate.
Gross Margin
We define Gross Margin as gross profit as
a percentage of our net revenue. Gross profit is equal to our
net revenue less cost of revenue. Certain of our competitors and
other retailers report cost of revenue differently than we do. As a
result, the reporting of our gross profit and Gross Margin may not
be comparable to other companies.
Net Debt
Net Debt is defined as total debt, which
currently consists of the revolving line of credit, less cash and
cash equivalents. We consider Net Debt to be an important
supplemental measure of our financial position, which allows us to
analyze our leverage.
Total Orders Placed
We define Total Orders Placed as the number of
customer orders placed across our platform during a particular
period. An order is counted on the day the customer places the
order. We do not adjust the number of Total Orders Placed for any
cancellation or return that may have occurred subsequent to a
customer placing an order. We consider Total Orders Placed as a key
performance metric on the basis that it is directly related to our
ability to attract and retain customers as well as drive purchase
frequency. Total Orders Placed, together with AOV, is an indicator
of the net revenue we expect to generate in a particular
period.
LULU’S FASHION LOUNGE
HOLDINGS, INC.KEY OPERATING AND FINANCIAL
METRICS(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Quarters Ended |
|
Fiscal Years Ended |
|
|
December 31, 2023 |
|
January 1, 2023 |
|
December 31, 2023 |
|
January 1, 2023 |
|
|
(13 weeks) |
|
(13 weeks) |
|
(52 weeks) |
|
(52 weeks) |
|
|
(In thousands, except Average Order Value
and percentages) |
|
Gross Margin |
|
|
39.1 |
% |
|
|
37.3 |
% |
|
|
41.7 |
% |
|
|
43.5 |
% |
Net income (loss) |
|
$ |
(7,230 |
) |
|
$ |
(5,246 |
) |
|
$ |
(19,334 |
) |
|
$ |
3,725 |
|
Adjusted EBITDA |
|
$ |
(1,976 |
) |
|
$ |
(972 |
) |
|
$ |
3,231 |
|
|
$ |
29,096 |
|
Adjusted EBITDA Margin |
|
|
(2.6 |
)% |
|
|
(1.1 |
)% |
|
|
0.9 |
% |
|
|
6.6 |
% |
Average Order Value |
|
$ |
136 |
|
|
$ |
119 |
|
|
$ |
133 |
|
|
$ |
131 |
|
Active Customers |
|
|
2,830 |
|
|
|
3,223 |
|
|
|
2,830 |
|
|
|
3,223 |
|
Note: Refer to “Use of Non-GAAP Financial Measures and Other
Operating Metrics” section above for definitions of these
metrics.
LULU’S FASHION LOUNGE
HOLDINGS, INC.RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES(Unaudited)
A reconciliation to non-GAAP Net Debt from Total
Debt as of December 31, 2023, and January 1, 2023, respectively, is
as follows:
|
|
|
|
|
|
|
|
|
As of |
|
|
December 31, 2023 |
|
January 1, 2023 |
|
|
(52 weeks) |
|
(52 weeks) |
|
|
(In thousands) |
Total Debt (1) |
|
$ |
(8,000 |
) |
|
$ |
(25,000 |
) |
Cash and cash equivalents |
|
|
2,506 |
|
|
|
10,219 |
|
Net Debt |
|
$ |
(5,494 |
) |
|
$ |
(14,781 |
) |
(1) Consists of the revolving
line of creditA reconciliation to non-GAAP Adjusted EBITDA from net
(loss) income for the thirteen and fifty-two weeks ended December
31, 2023 and January 1, 2023 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Quarters Ended |
|
Fiscal Years Ended |
|
|
December 31, 2023 |
|
January 1, 2023 |
|
December 31, 2023 |
|
January 1,
2023 |
|
|
(13 weeks) |
|
(13 weeks) |
|
(52 weeks) |
|
(52 weeks) |
|
|
(In thousands, except percentages) |
Net income (loss) |
|
$ |
(7,230 |
) |
|
$ |
(5,246 |
) |
|
$ |
(19,334 |
) |
|
$ |
3,725 |
|
Excluding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
|
1,273 |
|
|
|
1,154 |
|
|
|
4,819 |
|
|
|
4,134 |
|
Interest expense |
|
|
337 |
|
|
|
409 |
|
|
|
1,728 |
|
|
|
1,103 |
|
Income tax provision
(benefit) |
|
|
(684 |
) |
|
|
(1,131 |
) |
|
|
(1,676 |
) |
|
|
4,047 |
|
Equity-based compensation
expense (1) |
|
|
4,328 |
|
|
|
3,842 |
|
|
|
17,694 |
|
|
|
16,087 |
|
Adjusted EBITDA |
|
$ |
(1,976 |
) |
|
$ |
(972 |
) |
|
$ |
3,231 |
|
|
$ |
29,096 |
|
Net income (loss) margin |
|
|
(9.6 |
)% |
|
|
(5.8 |
)% |
|
|
(5.4 |
)% |
|
|
0.8 |
% |
Adjusted EBITDA margin |
|
|
(2.6 |
)% |
|
|
(1.1 |
)% |
|
|
0.9 |
% |
|
|
6.6 |
% |
(1) The thirteen weeks ended
December 31, 2023 and January 1, 2023 include equity-based
compensation expense for restricted stock unit (“RSU”) awards
granted during the period, as well as equity-based awards granted
in prior periods. The fifty-two weeks ended December 31, 2023
include equity-based compensation expense for performance stock
units and RSU awards granted during the period, accelerated expense
associated with the voluntary forfeiture of stock options, and
equity-based awards granted in prior periods. The fifty-two weeks
ended January 1, 2023 include equity-based compensation expense for
RSU awards granted during the period, as well as equity-based
awards granted in prior periods.A reconciliation to non-GAAP Free
Cash Flow from net cash provided by (used in) operating activities
for the thirteen and fifty-two weeks ended December 31, 2023 and
January 1, 2023 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Quarters Ended |
|
Fiscal Years Ended |
|
|
December 31, 2023 |
|
January 1, 2023 |
|
December 31, 2023 |
|
January 1, 2023 |
|
|
(13 weeks) |
|
(13 weeks) |
|
(52 weeks) |
|
(52 weeks) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities |
|
$ |
(5,679 |
) |
|
$ |
(10,134 |
) |
|
$ |
15,421 |
|
|
$ |
6,199 |
|
Capitalized software
development costs |
|
|
(505 |
) |
|
|
(631 |
) |
|
|
(2,055 |
) |
|
|
(2,500 |
) |
Purchases of property and
equipment |
|
|
(487 |
) |
|
|
(609 |
) |
|
|
(1,880 |
) |
|
|
(2,511 |
) |
Free Cash Flow |
|
$ |
(6,671 |
) |
|
$ |
(11,374 |
) |
|
$ |
11,486 |
|
|
$ |
1,188 |
|
Contact
Abbygail ReyesVice President,
Communicationsinvestors@lulus.com
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