Lulus Reports Excellent First Quarter 2022 Results and

Lulus Reports Excellent First Quarter 2022 Results and Record Quarterly Net Revenue

18
May '22

CHICO, Calif., May 17, 2022 (GLOBE NEWSWIRE) Lulu’s Fashion Lounge Holdings, Inc. (“Lulus” or the "Company") (Nasdaq: LVLU) today reported financial results for the first quarter ended April 3, 2022.

David McCreight, CEO of Lulus, said:

“We are pleased to report on another strong quarter, with Q1 2022 representing our highest quarterly net revenue in our history. Net revenue grew 62% and Adjusted EBITDA grew 84% over the same period last year. We delivered an all-time high Q1 gross margin rate of 47.3%, reinforcing our belief that Lulus is positioned well to continue to grow in spite of macro environment challenges, such as inflation and supply chain pressures.”

First Quarter 2022 Highlights:

Net revenue up 62%, compared to the same period last year.
Gross Margin increased 220 basis points to 47.3% while gross profit increased 70%, in each case compared to the same period last year.
Net income of $2.0 million, a $3.4 million increase compared to the same period last year.
Adjusted EBITDA of $9.9 million, an 84% increase compared to the same period last year.
Our strong cash flow model and balance sheet enabled us to pay down $10 million (40%) of our revolving line of credit during the quarter; resulting in a net cash position of $4.4 million, comprised of $19.4 million of cash partially offset by $15.0 million of borrowings on our revolving line of credit.
Net cash from operating activities amounted to $20.2 million for the quarter ended April 3, 2022, an increase of 22% compared to the same period last year.
Strong financial metrics were achieved through growth in Average Order Values (“AOV”) for both new and repeat customers, as well as growth in Active Customers. AOV increased to $133 from $111, an increase of 20% compared to the same period last year. Active Customers increased to 3.0 million from 1.9 million, an increase of 58% compared to the same period last year.
Diluted net income per share of $0.05, a $0.13 increase compared to the same period last year.


	Quarter Ended
	April 3, 2022			April 4, 2021			YoY Change
	(In thousands, except percentages)
Net revenue	$	111,902		$	68,967		62	%
Gross profit	$	52,978		$	31,113		70	%
Gross Margin*		47.3	%		45.1	%
Net income (loss) and comprehensive income (loss)	$	2,043		$	(1,375	)	NM
Adjusted EBITDA (non-GAAP financial measure)*	$	9,911		$	5,390		84	%
Net cash provided by operating activities	$	20,248		$	16,654		22	%
Active Customers*		3,000			1,900		58	%

NM – not meaningful
*Note: Refer to “Use of Non-GAAP Financial Measures and Other Operating Metrics” section below for definitions of these metrics.

Financial Outlook for Full Year 2022

We expect net revenue between $490 million and $500 million, which represents between 30% and 33% growth over 2021 net revenue.
Adjusted EBITDA is expected to be between $50 million and $51 million, which represents growth of between 21% and 23% over 2021.
As a result of paying down our long-term debt following our initial public offering, we expect reported interest expense to be $0.7 million, down from $12.8 million in 2021.
We expect capital expenditures to be between $5.0 and $7.0 million.

Lulus’ outlook is based on current indications for its business, which are subject to change. The net revenue and Adjusted EBITDA outlooks factor in anticipated headwinds resulting from unknown future impacts, including those related to COVID-19, inflation and supply chain pressures.


LULU’S FASHION LOUNGE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) (In thousands, except per share data)

	Quarter Ended
	April 3, 2022			April 4, 2021
Net revenue	$	111,902		$	68,967
Cost of revenue		58,924			37,854
Gross profit		52,978			31,113
Selling and marketing expenses		21,886			13,435
General and administrative expenses		27,834			15,089
Income from operations		3,258			2,589
Other income (expense), net:
Interest expense		(208	)		(3,807	)
Other income, net		54			6
Total other expense, net		(154	)		(3,801	)
Income (loss) before provision for income taxes		3,104			(1,212	)
Income tax provision		(1,061	)		(163	)
Net income (loss) and comprehensive income (loss)		2,043			(1,375	)
Allocation of undistributed earnings to participating securities		—			—
Net income (loss) attributable to common stockholders	$	2,043		$	(1,375	)
Net income (loss) per share attributable to common stockholders:
Basic	$	0.05		$	(0.08	)
Diluted	$	0.05		$	(0.08	)
Weighted average shares used to compute net income (loss) per share attributable to common stockholders:
Basic		38,098,073			17,462,283
Diluted		38,385,765			17,462,283


LULU’S FASHION LOUNGE HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share and per share data)

	April 3,		January 2,
	2022		2022
Assets
Current assets:
Cash and cash equivalents	$	19,433	$	11,402
Accounts receivable		7,861		5,649
Inventory, net		42,068		22,176
Asset for recovery		6,682		3,754
Income tax refund receivable		—		748
Prepaids and other current assets		5,095		5,364
Total current assets		81,139		49,093
Restricted cash		506		506
Property and equipment, net		3,885		3,231
Goodwill		35,430		35,430
Tradename		18,509		18,509
Intangible assets, net		2,452		2,244
Lease right-of-use assets (1)		30,914		—
Other noncurrent assets		5,365		4,763
Total assets	$	178,200	$	113,776
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	11,343	$	4,227
Accrued expenses and other current liabilities		38,724		21,948
Returns reserve		20,005		9,731
Stored-value card liability		7,292		7,240
Lease liabilities, current (1)		3,521		—
Total current liabilities		80,885		43,146
Revolving line of credit		15,000		25,000
Lease liabilities, noncurrent (1)		28,467		—
Other noncurrent liabilities		64		1,108
Total liabilities		124,416		69,254
Commitments and Contingencies