CHICO, Calif., March 31, 2022 (GLOBE NEWSWIRE) Lulu’s Fashion Lounge Holdings, Inc. (“Lulus”) (Nasdaq: LVLU) today reported financial results for the fourth quarter and full year ended January 2, 2022.

David McCreight, CEO of Lulus, said:

“Our excellent fourth quarter results concluded a very exciting 2021 in which we completed our initial public offering and fully paid off our term loan, providing us a very strong balance sheet and greater flexibility to invest in our business going forward. Thanks to the tremendous work of the LuCrew, we had a record-breaking fourth quarter for certain of our key operational and financial metrics.

• Q4 net revenue was up 78% year-over-year.
• Q4 gross margin increased 200 basis points to 44.9% while gross profit increased 86% year-over-year.
• Q4 net loss of $8.8 million was due to the acceleration of stock-based compensation concurrent with our IPO; however, we achieved Adjusted EBITDA of $6.4 million compared to a loss of $0.1 million in the same period last year.
• Strong financial metrics in 2021 and Q4 were achieved through growth in Average Order Values (“AOV”) for both new and repeat customers, as well as growth in Active Customers. AOV in Q4 increased to $121 compared to $99 in the prior year, an increase of 22%. Active Customers increased to 2.8 million compared to 2.0 million in the prior year, an increase of 38%.

Our deep relationships with our customers have also driven increases in our customer satisfaction metrics. We look forward to continuing to engage with and delight both new and existing customers with high-quality products at affordable price points to carry them through their everyday lives, as well as their most special occasions. Finally, we are excited about our current and future investments in technology and operations to continue driving strong and profitable growth.”

Fourth Quarter 2021 Earnings:

• Incurred a net loss per share of $4.69, which was greater than the prior period net loss per share of $0.24, due to the impact of the following one-time, non-cash items triggered by our IPO:  (1) a deemed dividend related to the conversion of convertible preferred stock, (2) a stock dividend issued concurrently with the IPO, and (3) accelerated stock-based compensation expenses.
• Removing the impact of the aforementioned one-time, non-cash items, our Adjusted Diluted Net Loss per Share was $0.03, compared to the prior year period Adjusted Diluted Net Loss per Share of $0.24.

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

Balance Sheet Highlights:

• Total debt decreased to $25.0 million of revolver borrowings as of January 2, 2022, a decrease of 78.4% compared to January 3, 2021.
• Net Debt amounted to $13.6 million, which was comprised of cash and cash equivalents of $11.4 million less revolver borrowings of $25.0 million as of January 2, 2022, a decrease of 86.4% compared to January 3, 2021.
• Cash from operating activities amounted to $26.9 million for the year ended January 2, 2022, an increase of 454% compared to the prior year period.

Full Year 2021 Highlights:

• Net revenue growth of 51%.
• Gross margin increase of 270 basis points and gross profit increase 60% over the prior year.
• Net income of $2.0 million, compared to a loss of $19.3 million in the prior year.
• Adjusted EBITDA of $41.4 million, compared to $18.9 million in the prior year.
• Net loss per share of $6.08, which was greater than the prior year net loss per share of $1.13, due to the impact of the following one-time, non-cash items triggered by our IPO:  (1) a deemed dividend related to the conversion of convertible preferred stock, (2) a stock dividend issued concurrently with the IPO, and (3) accelerated stock-based compensation.
• Removing the impact of the aforementioned one-time, non-cash items, our Adjusted Diluted Earnings per Share was $0.57, compared to the prior year period Adjusted Diluted Net Loss per share of $0.13.

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 $480 million and $490 million, which represents between 28% and 30% growth over 2021 net revenue.
• Adjusted EBITDA is expected to be between $48.5 million and $50 million, which represents growth of 17% and 21% over 2021. This equates to an expected Adjusted EBITDA Margin of 10.1% and 10.2%, as compared to 11.0% in 2021; the decrease is primarily driven by approximately $4.5 million of incremental expenses related to being a public company for the full year of 2022 compared to less than two months of public company expenses in 2021.
• As a result of paying down our long-term debt following the IPO, we expect reported interest expense to be $0.9 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 sales outlook factors in anticipated headwinds resulting from unknown future impacts related to COVID-19.