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Lulu's Fashion Lounge Holdings (LVLU)
NASDAQ:LVLU
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Lulu's Fashion Lounge Holdings
(NASDAQ:LVLU)
Rating:44Neutral
Price Target:
$0.50
▲( 21.95% Upside)
Positive Factors
Business Trends
Management noted trends in the business saw steady monthly improvement in Q1, which has continued into Q2, while return rates were down YoY for the third consecutive quarter.
Profitability
Management expects a positive inflection in profitability in Q2.
Negative Factors
Financial Performance
Q1 missed on both top and bottom-line, largely due to opex deleverage on the lower sales volume despite cost reduction efforts driving a ~12% decrease in total opex, while gross margin contracted more than expected as well.
Lulu's Fashion Lounge Holdings (LVLU) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$17.56M
Dividend YieldN/A
Average Volume (3M)126.75K
Price to Earnings (P/E)―
Beta (1Y)0.63
Revenue Growth-11.33%
EPS Growth-183.48%
CountryUS
Employees580
SectorConsumer Cyclical
Sector Strength74
IndustryApparel - Retail
Share Statistics
EPS (TTM)-0.19
Shares Outstanding42,942,380
10 Day Avg. Volume85,446
30 Day Avg. Volume126,749
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)1.25
Price to Sales (P/S)0.00
P/FCF Ratio-62.95
Enterprise Value/Market Cap2.97
Enterprise Value/Revenue0.04
Enterprise Value/Gross Profit0.40
Enterprise Value/Ebitda-0.56
Forecast
1Y Price Target
$1.00Price Target Upside143.90% Upside
Rating ConsensusHold
Number of Analyst Covering2
Lulu's Fashion Lounge Holdings Business Overview & Revenue Model
Company DescriptionLulu's Fashion Lounge Holdings (LVLU) is a leading online retailer specializing in young women's fashion. The company offers a wide range of apparel, shoes, accessories, and dresses, catering to contemporary fashion trends. Lulu's is known for its stylish and affordable products, targeting fashion-conscious consumers seeking trendy and versatile options.
How the Company Makes MoneyLulu's Fashion Lounge Holdings generates revenue primarily through its e-commerce platform by selling fashion products directly to consumers. The company's key revenue streams include online sales of clothing, footwear, and accessories. Lulu's utilizes a direct-to-consumer model, which allows it to maintain competitive pricing and a broad selection of fashion-forward merchandise. Significant partnerships with fashion influencers and strategic marketing initiatives also contribute to driving sales and expanding brand reach. Additionally, the company leverages data analytics to optimize inventory and personalize customer experiences, further enhancing its revenue potential.
Lulu's Fashion Lounge Holdings Financial Statement Overview
Summary
Lulu's Fashion Lounge Holdings is facing significant financial challenges, with declining revenues and profitability impacting the income statement. The balance sheet reveals high financial leverage and weakened equity, posing risks to financial health. While the company is generating some operating cash flow, overall cash flow management remains a concern. Continued focus on cost management, debt reduction, and revenue stabilization is essential for improving financial stability.Income Statement
Lulu's Fashion Lounge Holdings has experienced a steep revenue decline of 11.05% from 2023 to 2024. The gross profit margin decreased to 41.23% in 2024 from 41.73% in 2023, indicating a slight erosion in cost efficiency. The company faced significant losses, with a net profit margin of -17.49% for 2024. This negative trend in profitability, combined with declining EBIT and EBITDA margins, reflects challenges in managing operational costs and achieving profitability.45
Neutral
Balance Sheet
The company's financial leverage has increased, with a debt-to-equity ratio of 2.94 in 2024, highlighting significant reliance on debt financing. The equity position has weakened, with a return on equity (ROE) of -413.58% due to losses. The equity ratio stands at 12.35%, indicating a low proportion of equity financing, which poses a risk to financial stability.35
Negative
Cash Flow
The free cash flow has declined, showing a decrease of 88.67% from 2023 to 2024. The operating cash flow to net income ratio is positive, suggesting some level of operational cash generation despite losses. However, the free cash flow to net income ratio reflects challenges in converting earnings into cash, indicative of underlying cash management issues.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Mar 2023 | Mar 2022 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 315.89M | 355.18M | 439.65M | 375.63M | 248.66M | Gross Profit |
| 130.25M | 148.23M | 191.45M | 176.73M | 110.29M | EBIT |
| -52.39M | -20.21M | 8.74M | 22.34M | -4.67M | EBITDA |
| -46.20M | -14.46M | 16.27M | 23.93M | -1.32M | Net Income Common Stockholders |
| -55.29M | -19.33M | 3.73M | 2.04M | -19.30M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 4.46M | 2.51M | 10.22M | 11.40M | 15.55M | Total Assets |
| 108.20M | 149.44M | 167.20M | 113.78M | 105.08M | Total Debt |
| 39.35M | 39.08M | 58.50M | 25.00M | 115.56M | Net Debt |
| 34.89M | 36.57M | 48.28M | 13.60M | 100.01M | Total Liabilities |
| 94.83M | 88.49M | 102.31M | 69.25M | 140.63M | Stockholders Equity |
| 13.37M | 60.95M | 64.89M | 44.52M | -35.55M |
| Cash Flow | Free Cash Flow | |||
| 1.30M | 11.49M | 1.19M | 23.93M | 2.88M | Operating Cash Flow |
| 2.60M | 15.42M | 6.20M | 26.90M | 4.86M | Investing Cash Flow |
| -2.87M | -4.00M | -5.12M | -3.39M | -1.91M | Financing Cash Flow |
| 2.23M | -19.13M | -2.77M | -27.65M | 6.75M |
Lulu's Fashion Lounge Holdings Technical Analysis
Negative
0.41
Price Trends
0.43
Negative
0.63
Negative
1.00
Negative
Market Momentum
-0.01
Negative
47.90
Neutral
63.77
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LVLU, the sentiment is Negative. The current price of 0.41 is below the 20-day moving average (MA) of 0.41, below the 50-day MA of 0.43, and below the 200-day MA of 1.00, indicating a bearish trend. The MACD of -0.01 indicates Negative momentum. The RSI at 47.90 is Neutral, neither overbought nor oversold. The STOCH value of 63.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LVLU.
Lulu's Fashion Lounge Holdings Risk Analysis
Lulu's Fashion Lounge Holdings disclosed 72 risk factors in its most recent earnings report. Lulu's Fashion Lounge Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Lulu's Fashion Lounge Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
62 Neutral | $6.84B | 11.22 | 2.83% | 3.95% | 2.65% | -21.93% | |
61 Neutral | $537.08M | ― | -34.37% | ― | -13.14% | 44.84% | |
54 Neutral | $23.69M | ― | 47.49% | ― | 2.68% | 43.98% | |
49 Neutral | $233.05M | ― | -0.50% | ― | 1.57% | 98.64% | |
49 Neutral | $53.18M | ― | -72.29% | ― | -23.63% | 41.36% | |
44 Neutral | $17.56M | ― | -179.00% | ― | -11.33% | -183.48% | |
43 Neutral | $26.09M | ― | -37.62% | ― | -8.61% | -33.30% |
* Consumer Cyclical Sector Average
Performance Comparison
LVLU
Lulu's Fashion Lounge Holdings
0.41
-1.49
-78.42%
TLYS
Tilly's
0.86
-4.90
-85.07%
ZUMZ
Zumiez
11.91
-7.03
-37.12%
SFIX
Stitch Fix
4.17
1.87
81.30%
RENT
Rent the Runway
5.95
-18.78
-75.94%
BIRD
Allbirds
6.60
-5.69
-46.30%
Lulu's Fashion Lounge Holdings Earnings Call Summary
Earnings Call Date:May 14, 2025
(Q1-2025)
| % Change Since: -2.38%|
Next Earnings Date:Aug 13, 2025
Earnings Call Sentiment Neutral
The earnings call highlights significant achievements such as strong sales in occasion dresses, improved inventory management, and successful brand campaigns, alongside operational cost efficiencies and expected positive EBITDA. However, these were offset by challenges including a revenue decline, struggles in certain product categories, profitability pressures, and the withdrawal of fiscal guidance due to external uncertainties. Despite these challenges, the company shows promising signs of operational improvement and strategic focus.Q1-2025 Updates
Positive Updates
Strong Performance in Occasion Dresses
Sales momentum remained strong in occasion dresses, particularly in the bridesmaid category, driving healthy year-over-year net sales growth.
Improved Inventory Management
Inventory management resulted in a 4% year-over-year inventory reduction, while product margins increased 100 basis points versus the prior year period.
Brand Campaign Success
Successful campaigns and partnerships increased customer engagement and brand awareness, leading to the highest brand equity score to date.
Significant Wholesale Growth
Triple-digit year-over-year growth in Q1 revenue from wholesale, driven by growth among major partners and momentum in specialty retail.
Operational Improvements
Operational improvements with a sequential increase in gross margin to 40.3% from 37.9% in Q4 2024, and a $900,000 gross margin growth quarter-over-quarter.
Cost Efficiency Gains
OpEx declined 12% year-over-year, with fixed costs down 16%, reflecting ongoing efficiencies and strengthening profitability.
Positive Adjusted EBITDA Expected
Expected return to positive adjusted EBITDA in the second quarter of 2025 following improvements in March.
Negative Updates
Decline in Net Revenue
Net revenue decreased by 17% year-over-year, driven by a decrease in total orders placed and average order value.
Challenges in Shoes and Separates
Shoes and separates businesses continued to drag on overall results, accounting for most of the year-over-year decline in net sales.
Profitability Pressure
Profitability remained pressured due to the timing of consolidation of distribution centers and related onetime costs.
Withdrawal of 2025 Guidance
Previously issued fiscal year 2025 guidance for net revenue and adjusted EBITDA was withdrawn due to heightened uncertainty related to trade policy and tariffs.
Net Loss Increase
Net loss worsened to $8 million from $5.7 million in the same period last year.
Higher Interest Expenses
Interest expense increased to $577,000 from $383,000 in Q1 2024.
Company Guidance
During Lulu's First Quarter 2025 Earnings Conference Call, the company outlined several key metrics and strategic initiatives. The call highlighted their focus on achieving a return to positive adjusted EBITDA in the coming quarter, with a significant emphasis on enhancing cash flow and reducing net debt, which decreased by $7.2 million since the end of Q4 2024. Gross margin improved to 40.3% in Q1 2025, up from 37.9% in Q4 2024, contributing to a $900,000 quarter-over-quarter gross margin growth. The company also reported a 4% year-over-year reduction in inventory levels, a 100 basis point improvement in product margins, and an increase in gross margin by 100 basis points compared to the previous year. Despite a 17% year-over-year decrease in net revenue to $64.2 million, strong performance in occasion dresses, particularly bridesmaid categories, drove positive momentum. Operating expenses were reduced by 12% year-over-year, with fixed costs declining by 16%, reflecting ongoing cost efficiencies. Additionally, Lulu's highlighted a strategic focus on product margin optimization, SKU management, and direct sourcing to mitigate risks associated with international trade policies and tariffs. They also experienced a triple-digit year-over-year growth in Q1 wholesale revenue, driven by partnerships and strong momentum in specialty retail. The call emphasized the importance of their Love Rewards loyalty program, which saw double-digit growth, and successful brand campaigns that boosted customer engagement and brand awareness. As they navigate macroeconomic uncertainties, Lulu's remains committed to strategic sourcing, pricing discipline, and vendor collaboration to support long-term growth and resilience.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.