Lulu's Fashion Lounge Holdings, Inc. Q3 FY2025 earnings call

• Special occasion continues to lead outperformance with formal and bridesmaids categories driving net sales growth. - First-time reorders of new products saw sequential and year-over-year growth, validating refined reorder and merchandising strategies. - Product margins improved for the fourth consecutive quarter, with a 500 basis point increase compared to the prior year period. - Gross margins expanded 450 basis points to 42.6% over the prior year period. - Return rates improved 110 basis points from the previous quarter. - Launched first fall brand campaign and leveraged editorial and influencer engagement. - Wholesale business is ramping up with triple-digit 7-figure year-over-year growth in wholesale revenue year to date. - OpEx declined 11% year over year, with fixed costs down 18%.

Special occasion and bridesmaids categories continue to outperform, with formal and bridesmaids categories driving ongoing year-over-year net sales growth. In Q3 2025, these product classes had a three-year CAGR of 9.5%. The casual wear and footwear assortments have continued to perform weaker and are being actively realigned towards a more curated event-focused assortment. Net revenue for the third quarter was approximately $73.6 million, a decrease of 9% year over year, driven by a 14% decrease in total orders placed partially offset by an 8% increase in average order value. Gross margin for the quarter was 42.6%, up 450 basis points year over year.

• Expect significant year-over-year improvement in adjusted EBITDA in 2025. - Continue to expect full-year capital expenditures to be approximately $2.5 million. - Remain focused on driving strong operational execution towards profitable growth. - Actively executing a multifaceted strategy to offset tariff-related costs including vendor collaboration, diversified sourcing, strategic pricing actions, and optimizing product assortment.

• Macroeconomic environment including impact of tariffs, consumer demand and return rates on the business. - Ability to realize the intended impact of cost reduction measures. - Risks detailed in the press release and SEC filings which could cause actual results to differ materially from forward-looking statements.

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