Lulu's Fashion Lounge Holdings, Inc.
For the period ended Sep 28, 2025. Filed Nov 12, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 28, 2025 · Filed Nov 12, 2025
LVLU$10.58+1.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-29; filed 2025-08-13.
0001558370-25-011371
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-28; filed 2025-11-12.
0001104659-25-110337
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 146 previous paragraphs and 134 current paragraphs.
85 unchanged; 30 reworded; 17 added; 28 removed; 3 previous and 2 current paragraphs rearranged.
Tables are not compared: 18 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
Appointment of Fractional Chief Financial Officer
Current report
On October 11, 2025, our Board of Directors appointed Heidi Crane as our fractional Chief Financial Officer (“Fractional CFO”), effective October 13, 2025.
Current report
Effective October 13, 2025, Crystal Landsem is no longer serving as Interim Chief Financial Officer, but will continue to serve as Chief Executive Officer. Ms. Landsem also continued to serve as the Company’s principal financial officer and principal accounting officer through the filing of this Quarterly Report on Form 10-Q for the third quarter ended September 28, 2025 with the Securities and Exchange Commission.
Current report
2025 Credit Agreement
Current report
On August 14, 2025, the Company and its subsidiaries (collectively, the “Borrowers”) entered into a Loan and Security Agreement with White Oak Commercial Finance, LLC, as Administrative Agent, and the lenders party thereto (the “2025 Credit Agreement”). The 2025 Credit Agreement is comprised of an asset-based revolving credit facility with a $20.0 million commitment, a $5.0 million uncommitted accordion and a $1.0 million sublimit for letters of credit. The initial funding of the 2025 Credit Agreement occurred on August 14, 2025, and the proceeds were used in part to repay approximately $6.0 million outstanding under the 2021 Credit Agreement. The 2025 Credit Agreement matures on August 14, 2028. On October 28, 2025, the Company entered into an amendement to the 2025 Credit Agreement, which included some clarifying and non-material changes to certain terms in the 2025 Credit Agreement.
Current report
Net revenue decreased in the thirteen weeks ended September 28, 2025 by $6.9 million, or 9%, compared to the same period of the prior year, primarily due to a 14% decrease in Total Orders Placed and higher return rate driven by higher mix of full price products and mix shift to assortment with higher return rates, partially offset by the impact of higher AOV.
Current report
Selling and marketing expenses, which are correlated to sales, decreased in the thirteen weeks ended September 28, 2025 by $0.7 million, or 4%, compared tothe same period of the prior year, primarilydue to lower online marketing costs and merchant processing fees of $0.8 million, partially offset by an additional campaign shoot and marketing software spend of $0.1 million.
Current report
Income Tax Provision
Current report
Income tax provision in the thirteen weeks ended September 28, 2025 increased by $0.1 million to a provision of $0.1 million, compared to an immaterial provision in the thirteen weeks ended September 29, 2024. The increase was primarily due to state income taxes and change in naked credits.
Current report
Comparisons for the Thirty-nine weeks ended September 28, 2025 and September 29, 2024
Current report
Income Tax Provision
Current report
Defaults”). On August 11, 2025, we entered into an amendment to the Forbearance Agreement and the fifth amendment to the 2021 Credit Agreement which extended the Forbearance Period and maturity date to August 22, 2025. Under the terms of the Forbearance Agreement, as amended, the Refinancing Transaction Milestones were due on the maturity date. No fees were paid in connection with the forbearance. The agreement was not entered into as a result of financial distress, but rather to provide additional time to finalize and execute the 2025 Credit Agreement.
Current report
On August 14, 2025, we entered into the 2025 Credit Agreement. The 2025 Credit Agreement is comprised of an asset-based revolving credit facility with a $20.0 million commitment, a $5.0 million uncommitted accordion and a $1.0 million sublimit for letters of credit. The amount that the Borrowers may borrow under the 2025 Credit Agreement is based on a borrowing base calculated based on advance rates for various assets serving as collateral for the 2025 Credit Agreement. Borrowings under the 2025 Credit Agreement bear interest at a rate equal to the 30-day SOFR rate plus 3.95%. The 2025 Credit Agreement is secured by a first-priority security interest in and lien upon all tangible and intangible personal property of the Borrowers now owned or acquired in the future. The 2025 Credit Agreement includes covenants that limit the Borrowers’ ability to incur indebtedness, to create liens or other encumbrances, to make certain payments and investments, to engage in transactions with affiliates, to guarantee indebtedness and to sell or otherwise dispose of assets and merge or consolidate with other entities. The 2025 Credit Agreement also includes a financial covenant for minimum excess availability under the 2025 Credit Agreement. It also requires us to maintain lockbox accounts and cash management arrangements under the control of the Administrative Agent, who has full dominion and control over each Collection Account and all Deposit Accounts (except Excluded Accounts). Outstanding borrowings are classified as current liabilities, however, the 2025 Credit Agreement does not mature until August 14, 2028. On October 28, 2025, weentered into an amendment to the 2025 Credit Agreement, which clarified the terms related to the manner in which interest is calculated, provides us greater flexibility with respect to the location of our corporate headquarters and extends the amount of time to produce our borrowing base reports (the "Amendment to the 2025 Credit Agreement"). The foregoing description of the Amendment to the 2025 Credit Agreement is qualified in its entirety by reference to the full text of the Amendment to the 2025 Credit Agreement, a copy of which is filed as Exhibit 10.3 to this Quarterly Report on Form 10-Q and incorporated herein by reference.
Current report
The initial funding of the 2025 Credit Agreement occurred on August 14, 2025, and the proceeds were used in part to repay approximately $6.0 million outstanding under the 2021 Credit Agreement. In connection with entering into the 2025 Credit Agreement and the repayment in full of all outstanding obligations under the 2021 Credit Agreement, the 2021 Credit Agreement, along with the related Forbearance Agreement, as amended, were terminated.
Current report
As of September 28, 2025, under the 2025 Credit Agreement, the outstanding borrowing was $9.2 million, and after giving effect to the excess availability covenant, the unused availability was $6.8 million. During the thirty-nine weeks ended September 28, 2025, we borrowed $51.4 million and repaid $42.2 million under the 2025 Credit Agreement and had a weighted average interest rate of 8.3%. As of September 28, 2025, we had a $0.3 million letter of credit outstanding with Bank of America. See Note 5,Debt within the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q for further information on the 2025 Credit Agreement, as amended.
Current report
The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We alleviated the substantial doubt about our ability to continue as a going concern as a result of successfully entering into the 2025 Credit Agreement, among other factors. Actual results of operations will depend on numerous factors, many of which are beyond our control, as further discussed in Part I, Item 1A, “Risk Factors” included in our 2024 10-K and Part II, Item 1A, “Risk Factors” of our Quarterly Reports on Form 10-Q for the quarters ended March 30, 2025 and June 29, 2025.
Current report
During the thirty-nine weeks ended September 29, 2024, net cash provided by operating activities was $5.1 million, which consisted of a net loss of $23.4 million, partially offset by non-cash charges of $17.2 million and a net change of $11.3 million in operating assets and liabilities. The non-cash charges were primarily comprised of $6.2 of equity-based compensation expense, $4.1 million of depreciation and amortization, $3.8 million of deferred income taxes, and $3.0 million of non-cash lease expense. The net change in operating assets and liabilities was primarily driven by a $19.2 million increase in accrued expenses primarily driven by an increase in return reserve of $7.5 million, an increase in stored value liabilities of $2.9 million due to lower redemption rates, an increase in our non-routine legal reserve accrual of $4.8 million, increase in accrued inventory of $4.0 million related to purchases in line with the increase in sales, and an increase in miscellaneous accruals of $1.3 million offset by a decrease in accrued compensation and benefits of $1.4 million, and a $2.5 million increase in accounts payable due to the timing of payments. These increases were partially offset by a $3.3 million increase in prepaid and other assets, a $3.0 million increase in inventory, a $2.9 million decrease in operating lease liabilities and a $1.7 million decrease in assets for recovery.
Removed paragraphs (28)
Previous report
Transfer to Nasdaq Capital Market
Previous report
On May 27, 2025, we submitted an application for a transfer from the Nasdaq Global Market to the Nasdaq Capital Market which was approved and became effective as of the opening of business on June 10, 2025. The transfer to the Nasdaq Capital Market addressed a deficiency with the minimum of $10 million of stockholders’ equity required for continued listing on the Nasdaq Global Market. The Nasdaq Capital Market requires a minimum of $2.5 million of stockholders’ equity for continued listing.
Previous report
Departure of Chief Financial Officer
Previous report
On May 30, 2025, Tiffany R. Smith notified us of her decision to resign as Chief Financial Officer, effective June 30, 2025 (the “Transition Date”). Following the Transition Date, Ms. Smith continued to serve in an advisory position with us through the filing of this Quarterly Report on Form 10-Q for the fiscal quarter ended June 29, 2025, to ensure an orderly transition of her duties. Ms. Smith’s resignation was for personal reasons and did not arise from any disagreement on any matter relating to the operations, policies, financial results or accounting practices of the Company. Our Board of Directors is conducting a search process with the assistance of a leading executive search firm to identify our next Chief Financial Officer. In the interim, our Board of Directors appointed Crystal Landsem to serve as the Company’s Interim Chief Financial Officer, effective as of the Transition Date, and she will hold the position of Interim Chief Financial Officer until a successor Chief Financial Officer is appointed. For avoidance of doubt, Ms. Landsem will also continue to serve as Chief Executive Officer, a position she has held with the Company since March 6, 2023.
Previous report
Reverse Stock Split
Previous report
On June 11, 2025, the Company’s Board of Directors approved a 1-for-15 reverse stock split (the “Reverse Stock Split”) of the Company’s common stock, par value $0.001 per share. On June 26, 2025, the Company filed a Certificate of Amendment to the Company’s amended and restated certificate of incorporation with the Secretary of State of the State of Delaware to effect the Reverse Stock Split. As a result, each stockholder of record on June 26, 2025 received one share of common stock for every fifteen shares held on the record date. All share, equity award, and per share amounts presented herein have been retroactively adjusted to reflect this Reverse Stock Split. The Reverse Stock Split was effective for purposes of trading on the Nasdaq Capital Market as of the opening of business on July 7, 2025.
Previous report
Compliance with Nasdaq Continued Listing Standards
Previous report
We were previously notified on February 27, 2025 that we were not in compliance with Nasdaq Listing Rule 5450(a)(1) because our common stock had failed to maintain a minimum bid price of $1.00 per share for a period of thirty (30) consecutive business days.
Previous report
Pursuant to the Nasdaq Notice, Nasdaq notified us that for 10 consecutive business days from July 7 to July 18, 2025, the closing bid price of our common stock was at $1.00 per share or greater, and as such, we had regained compliance with the Minimum Bid Price Requirement.
Previous report
On July 21, 2025, we received a notice (the “Nasdaq Notice”) from The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that we had regained compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”) for continued listing on The Nasdaq Capital Market.
Previous report
Amendment to Forbearance Agreement and Fifth Amendment to 2021 Credit Agreement, As Amended
Previous report
On August 11, 2025, we entered into the Forbearance Amendment with the Administrative Agent and Lenders. Pursuant to the terms of the Forbearance Amendment, the Administrative Agent and Lenders agreed to amend the definition of “Forbearance Termination Event” set forth in the Forbearance Agreement to replace “August 15, 2025” with “August 22, 2025”. The Forbearance Amendment also amended the definition of “Maturity Date” set forth in the 2021 Credit Agreement, as amended, to replace “August 15, 2025” with “August 22, 2025”. We are currently negotiating a new asset-based revolving credit facility.
Previous report
We are actively seeking alternative debt financing and continuing to take certain cash conservation measures, including adjustments to marketing and other fixed and variable costs and capital spend to meet our obligations as needed. While we are currently negotiating a new asset-based revolving credit facility, there can be no assurances that we will be able to close such credit facility in a timely manner on acceptable terms, if at all. As the ability to raise additional debt financing is outside of management’s control, we cannot conclude that management’s plans will be effectively implemented within twelve months from the date the condensed consolidated financial statements are issued. Accordingly, we have concluded that these plans do not alleviate substantial doubt about our ability to continue as a going concern. The condensed consolidated financial statements do not reflect any adjustments that might result from the outcome of this uncertainty.
Previous report
Income Tax Benefit (Provision)
Previous report
Selling and marketing expenses decreased in the thirteen weeks ended June 29, 2025 by $2.9 million, or 12%, compared tothe same period of the prior year, due to lower online marketing costs of $2.4 million, lower merchant processing fees of $0.3 million, and lower campaign shoots and website spend of $0.2 million.
Previous report
Comparisons for the Twenty-Six Weeks Ended June 29, 2025 and June 30, 2024
Previous report
Net revenue decreased in the twenty-six weeks ended June 29, 2025 by $23.6 million, or 14%, compared to the twenty-six weeks ended June 30, 2024. The decrease is primarily the result of a 17% decrease in Total Orders Placed and lower AOV, partially offset by lower return rates, compared to the twenty-six weeks ended June 30, 2024.
Previous report
Income Tax Benefit (Provision)
Previous report
Our income tax provision in the twenty-six weeks ended June 29, 2025 decreased by $5.8 million to an immaterial benefit position, compared to aprovision of $5.8 million in the twenty-six weeks ended June 30, 2024. The decrease was primarily due to the establishment of valuation allowance in 2024.
Previous report
On July 22, 2024, we entered into an amendment to the 2021 Credit Agreement (the “First Credit Amendment”)which extended the maturity date to August 15, 2025 and reduced the Revolving Commitment (as defined in the 2021 Credit Agreement) to $15.0 million, with a further reduction to $10.0 million on or about March 31, 2025. The First Credit Amendment also reduced the previous letters of credit sublimit from $7.5 million to $5.0 million.
Previous report
On November 12, 2024, we entered into a second amendment to the 2021 Credit Agreement (the “Second Credit Amendment”)which extended our reporting deadline for our financial statements and covenant compliance certificate for the third quarter 2024 to December 16, 2024, and required us to test the financial covenants no later than December 16, 2024. The Second Credit Amendment prohibited us from requesting any additional borrowing or letter of credit extension until the financial statements and the compliance certificate for the third quarter of 2024 were delivered. We successfully delivered the third quarter financial statements and the compliance certificate on December 16, 2024.
Previous report
On December 13, 2024, we entered into a third amendment to the 2021 Credit Agreement (the “Third Credit Amendment”). The Third Credit Amendment provided a limited waiver for us to comply with the financial covenants for the period of four fiscal quarters ended on or about September 30, 2024. Under the Third Credit Amendment, we are required to, among other things, not permit unrestricted cash and cash equivalents, as determined on a consolidated basis and tested weekly, to be less than certain specified minimum amounts. The Third Credit Amendment also requires the payment of certain consent fees and increases the interest rates payable under the amended 2021 Credit Agreement for periods commencing on or after December 13, 2024 and February 1, 2025, as described in Note 5,Debt within the accompanying Notes to the Condensed Consolidated Financial Statements. Pursuant to the Third Credit Amendment, there was no financial covenant test for the quarter ended September 29, 2024.
Previous report
On March 27, 2025, we entered into a fourth amendment to the 2021 Credit Agreement (the “Fourth Credit Amendment”). The Fourth Credit Amendment provided a limited waiver for us to comply with the financial covenants for the period of four fiscal quarters ended on or about December 31, 2024. It also suspends measurement of the Consolidated
Previous report
Total Leverage Ratio and Consolidated Fixed Charge Covenant Ratio for the fiscal quarter ended on or about March 31, 2025. The Fourth Credit Amendment prohibits the Company from requesting any further borrowings under the 2021 Credit Agreement, as amended. The Fourth Credit Amendment includes a timeline of milestones for a refinancing transaction with a third-party lender, and limits our ability to further enter into certain transactions, including certain liens, dispositions, investments, debt and restricted payments. The Fourth Credit Amendment also requires the payment of the remaining portion of the consent fee payable under the Third Credit Amendment and increases the interest rates payable under the 2021 Credit Agreement, as amended, for periods commencing on or after March 27, 2025, as described in Note 5,Debt within the accompanying Notes to the Condensed Consolidated Financial Statements. Although we have secured these limited waivers, we cannot guarantee that we will be able to satisfy all of the necessary conditions or that we will not incur another covenant violation in the future.
Previous report
All capitalized terms used above and not otherwise defined herein are defined in the 2021 Credit Agreement, as amended.
Previous report
During the twenty-six weeks ended June 29, 2025, we did not borrow any amount under the 2021 Credit Agreement, as amended, and repaid $7.3 million of the outstanding balance. As of June 29, 2025, we had $0.2 million in letters of credit outstanding. The effective interest rate on the $5.8 million outstanding balance as of June 29, 2025, was 41.3% and 21.5% during the thirteen and twenty-six weeks ended June 29, 2025, respectively, which was inclusive of $0.7 million in one-time fees related to the 2021 Credit Agreement, as amended. As of June 29, 2025, the weighted-average interest rate was 10.4%. See Note 5,Debt within the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q for further information on the 2021 Credit Agreement, as amended.
Previous report
On August 11, 2025, the Company entered into the Forbearance Amendment with the Administrative Agent and Lenders. Pursuant to the terms of the Forbearance Amendment, the Administrative Agent and Lenders agreed to amend the definition of “Forbearance Termination Event” set forth in the Forbearance Agreement to replace “August 15, 2025” with “August 22, 2025”. The Forbearance Amendment also amended the definition of “Maturity Date” set forth in the 2021 Credit Agreement, as amended, to replace “August 15, 2025” with “August 22, 2025. The Company is currently negotiating a new asset-based revolving credit facility.
Previous report
As of June 29, 2025, we had cash and cash equivalents of $1.5 million. During the thirteen and twenty-six weeks ended June 29, 2025, we took certain cost reduction and cash conservation measures, adjustments to marketing spend, and other fixed, variable, and capital spend. We are actively seeking alternative debt financing and continuing to take certain cash conservation measures, including adjustments to marketing and other fixed and variable costs and capital spend to meet our obligations as needed. While we are currently negotiating a new asset-based revolving credit facility, there can be no assurances that we will be able to close such credit facility in a timely manner on acceptable terms, if at all. As the ability to raise additional debt financing is outside of management’s control, we cannot conclude that management’s plans will be effectively implemented within twelve months from the date the condensed consolidated financial statements are issued. Accordingly, we have concluded that these plans do not alleviate substantial doubt about our ability to continue as a going concern. The condensed consolidated financial statements do not reflect any adjustments that might result from the outcome of this uncertainty. Actual results of operations will depend on numerous factors, many of which are beyond our control, as further discussed in Part I, Item 1A, “Risk Factors” included in our 2024 10-K, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended March 30, 2025 and Part II, Item 1A,“Risk Factors” in this Quarterly Report on Form 10-Q for the quarter ended June 29, 2025.
Reworded paragraphs (30)
Previous wording
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and related notes as disclosed in our Annual Report on Form 10-K for the fiscal year ended December 29, 2024, filed with the Securities and Exchange Commission (“SEC”) on March 27, 2025 (the “2024 10-K”). This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in Item I, Part 1A, “Risk Factors” in our 2024 10-K, Part II, Item 1A, “Risk Factors” in the Quarterly Report on Form 10-Q for the quarter ended March 30, 2025, and in Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q for the quarter ended June 29, 2025. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise*.*
Current wording
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and related notes as disclosed in our Annual Report on Form 10-K for the fiscal year ended December 29, 2024, filed with the Securities and Exchange Commission (“SEC”) on March 27, 2025 (the “2024 10-K”). This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in Item I, Part 1A, “Risk Factors” in our 2024 10-K and Part II, Item 1A, “Risk Factors” in the Quarterly Reports on Form 10-Q for the quarters ended March 30, 2025 and June 29, 2025. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise*.*
Previous wording
Changing macroeconomic factors, including inflation, interest rates, student loan repayment resumption, tariffs or bans, world events, wars and domestic and international conflicts, existing and future laws, regulations and directives and executive orders, and overall consumer confidence with respect to current and future economic conditions have directly impacted our sales as discretionary consumer spending levels and shopping behavior fluctuate with these factors. We have responded to these factors by taking appropriate pricing, promotional and other actions to stimulate customer demand. These factors are expected to continue to have an impact on our business, results of operations, our growth and financial condition.
Current wording
impacted our sales as discretionary consumer spending levels and shopping behavior fluctuate with these factors. We have responded to these factors by taking appropriate pricing, promotional and other actions to stimulate customer demand. These factors are expected to continue to have an impact on our business, results of operations, our growth and financial condition.
Previous wording
The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. During the thirteen and twenty-six weeks ended June 29, 2025, the Company incurred net losses of $3.0 million and $11.0 million, respectively. As of June 29, 2025, we had $1.5 million in cash and cash equivalents and $5.8 million in outstanding amounts under the credit agreement with Bank of America for the Company’s revolving facility (“2021 Credit Agreement”), as amended, classified within total current liabilities. During the twenty-six weeks ended June 29, 2025, the Company did not borrow any amount under the 2021 Credit Agreement, as amended, and repaid $7.3 million of the outstanding balance. See Note 5,Debt within the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Qfor further information on the 2021 Credit Agreement, as amended.
Current wording
The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We alleviated the substantial doubt about our ability to continue as a going concern as a result of successfully entering into the 2025 Credit Agreement, as disclosed in Note 5,Debtin the accompanying Notes to the Condensed Consolidated Financial Statements, among other factors.
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A reconciliation to non-GAAP Free Cash Flow from net cash provided by operating activities for the thirteen and twenty-six weeks ended June 29, 2025 and June 30, 2024 is as follows:
Current wording
A reconciliation to non-GAAP Free Cash Flow from net cash provided by operating activities for the thirteen and thirty-nine weeks ended September 28, 2025 and September 29, 2024 is as follows:
Previous wording
Our financial condition and results of operations have been, and will continue to be, affected by a number of factors that present significant opportunities for us but also pose risks and challenges, including what is discussed below. See Part I, Item 1A, “Risk Factors” in our 2024 10-K and Part II, Item 1A,“Risk Factors” of this Quarterly Report on Form 10-Q for the quarter ended June 29, 2025.
Current wording
Our financial condition and results of operations have been, and will continue to be, affected by a number of factors that present significant opportunities for us but also pose risks and challenges, including what is discussed below. See Part I, Item 1A, “Risk Factors” in our 2024 10-K and Part II, Item 1A,“Risk Factors” of our Quarterly Reports on Form 10-Q for the quarters ended March 30, 2025 and June 29, 2025.
Previous wording
Our continued success depends in part on our ability to retain and drive repeat purchases from our existing customers. We monitor retention across our entire customer base. Our goal is to attract and convert visitors into Active Customers and foster relationships that drive repeat purchases. During the trailing 12 months ended June 29, 2025, we served 2.5 million Active Customers compared to 2.7 million for the trailing 12 months ended June 30, 2024.
Current wording
Our continued success depends in part on our ability to retain and drive repeat purchases from our existing customers. We monitor retention across our entire customer base. Our goal is to attract and convert visitors into Active Customers and foster relationships that drive repeat purchases. During the trailing 12 months ended September 28, 2025, we served 2.4 million Active Customers compared to 2.7 million for the trailing 12 months ended September 29, 2024.
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Interest expense consists of interest expense related to the revolving facility under the 2021 Credit Agreement, as amended.
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Interest expense consists of interest expense related to the 2021 Credit Agreement and the 2025 Credit Agreement, as amended.
Previous wording
The benefit (provision) for income taxes represents federal, state, and local income taxes. The effective rate differs from the statutory rate primarily due tothe establishment of a deferred tax asset valuation allowance as the Company could not provide sufficient positive evidence that the deferred taxes will be more-likely-than-not realized in the future. Our effective tax rate will change from quarter to quarter based on recurring and nonrecurring factors including, but not limited to, enacted tax legislation, state and local income taxes, and tax audit settlements.
Current wording
The provision for income taxes represents federal, state, and local income taxes. The effective rate differs from the statutory rate primarily due tothe establishment of a deferred tax asset valuation allowance as the Company could not provide sufficient positive evidence that the deferred taxes will be more-likely-than-not realized in the future. Our effective tax rate will change from quarter to quarter based on recurring and nonrecurring factors including, but not limited to, enacted tax legislation, state and local income taxes, and tax audit settlements.
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Cost of revenue decreased in the thirteen weeks ended June 29, 2025 by $5.5 million, or 11% compared to the same period of the prior year, primarily driven by the impact of lower net revenue.
Current wording
Cost of revenue decreased in the thirteen weeks ended September 28, 2025 by $7.6 million, or 15% compared to the same period of the prior year, primarily driven by the impact of lower net revenue, reduced sales volumes of markdown and discounted items, and improved costs.
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Gross profit decreased in the thirteen weeks ended June 29, 2025 by $5.0 million, or 12% compared to the same period of the prior year, primarily driven by the impact of the lower volume of sales.
Current wording
Gross profit increased in the thirteen weeks ended September 28, 2025 by $0.7 million, or 2% compared to the same period of the prior year, primarily driven by higher product margin driven from lower markdown sales and discounts, improved product costing, and higher sales mix driven from higher margin product assortment, partially offset by the impact of the lower volume of sales.
Previous wording
General and administrative expenses decreased in the thirteen weeks ended June 29, 2025 by $3.9 million or 18%, compared tothe same period of the prior year. The decrease was primarily due to a $1.0 million decrease in fixed labor driven byreduced fixed headcount, a $0.8 million decrease in equity-based compensation expense, a $0.6 million decrease in variable labor and benefits associated with lower sales volume, a $0.5 million decrease in directors and officers (“D&O”) liability insurance and legal and professional fees and a $0.4 million decrease in software, supplies and travel.
Current wording
General and administrative expenses decreased in the thirteen weeks ended September 28, 2025 by $3.5 million or 18%, compared tothe same period of the prior year. The decrease was primarily due to a $1.7 million decrease in fixed labor and benefits costs driven byreduced fixed headcount, a $1.1 million decrease in equity-based compensation expense, a $0.5 million decrease in variable labor and benefits associated with lower sales volume, a $0.4 million decrease in liability insurance and legal and professional fees and a $0.3 million decrease insoftware, occupancy, depreciation and amortization. The foregoingwas partially offset by a $0.4 million increase in non-routine items accruals, and a $0.1 million increase inboard-related fees.
Previous wording
Interest expense increased in the thirteen weeks ended June 29, 2025 by $0.6 million, or 218%, compared tothe same period of the prior year. The increase is attributable tohigher interest rates and higher average borrowings.
Current wording
Interest expense increased in the thirteen weeks ended September 28, 2025 by $0.2 million, or 79%, compared tothe same period of the prior year. The increase is primarily attributable to higher average borrowings and write-off of the 2021 Credit Agreement amortization.
Previous wording
Net revenue decreased in the thirteen weeks ended June 29, 2025 by $10.4 million, or 11%, compared to the same period of the prior year, primarily due to a 16% decrease in Total Orders Placed, partially offset by the impact of higher AOV and lower return rates.
Current wording
Net revenue decreased in the thirty-nine weeks ended September 28, 2025 by $30.5 million, or 12%, compared to thesame period of the prior year. The decrease is primarily the result of a 16% decrease in Total Orders Placed, partially offset by the impact of higher AOV and lower return rates.
Previous wording
Cost of revenue decreased in the twenty-six weeks ended June 29, 2025 by $11.8 million, or 13%, compared to the same period of the prior year, which was primarily driven by the impact of lower net revenue.
Current wording
Cost of revenue decreased in the thirty-nine weeks ended September 28, 2025 by $19.4 million, or 13%, compared to the same period of the prior year, which was primarily driven by the impact of lower net revenue.
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Gross profit decreased in the twenty-six weeks ended June 29, 2025 by $11.8 million, or 16% compared to the same period of the prior year, which was primarily driven by the impact of the lower volume of sales.
Current wording
Gross profit decreased in the thirty-nine weeks ended September 28, 2025 by $11.0 million, or 11% compared to the same period of the prior year, which was primarily driven by the impact of the lower volume of sales.
Previous wording
Selling and marketing expenses decreased in the twenty-six weeks ended June 29, 2025 by $4.7 million, or 11%, compared to the same period of the prior year, due to lower online marketing costs of $3.5 million, lower performance and awareness marketing spend of $0.6 million, and lower merchant processing fees of $0.6 million, partly due to the lower volumeof sales.
Current wording
Selling and marketing expenses, which are corelated to sales, decreased in the thirty-nine weeks ended September 28, 2025 by $5.4 million, or 9%, compared to the same period of the prior year, due to lower marketing costs of $4.7 million and lower merchant processing fees of $0.7 million.
Previous wording
General and administrative expenses decreased in the twenty-six weeks ended June 29, 2025 by $6.9 million or 16%, compared to the same period of the prior year. The decrease was primarily due to a $2.3 million decrease in fixed labor costs due to reduced headcount, a $1.4 million decrease in equity-based compensation expense, a $1.1 million decrease in variable labor and benefits costs primarily associated with lower sales volume and operational efficiencies, a $0.9 million decrease in D&O insurance costs, and a $0.5 million decrease in software expenses.
Current wording
General and administrative expenses decreased in the thirty-nine weeks ended September 28, 2025 by $10.5 million or 17%, compared to the same period of the prior year. The decrease was primarily due to a $4.1 million decrease in fixed labor and benefits costs due to reduced headcount, a $2.6 million decrease in equity-based compensation expense, a $1.5 million decrease in variable labor and benefits costs primarily associated with lower sales volume and operational efficiencies, a $1.3 million decrease inliability insurance and legal and professional fees, a $0.6 million decrease in software expenses, and a $0.4 million decrease in occupancy, depreciation and amortization.
Previous wording
Interest expense increased in the twenty-six weeks ended June 29, 2025 by $0.8 million, compared to the same period of the prior year. The increase is attributable to higher average borrowings and higher interest rates.
Current wording
Interest expense increased in the thirty-nine weeks ended September 28, 2025 by $1.0 million, or 106%, compared to the same period of the prior year. The increase is primarily attributable to higher average borrowings and write-off of the 2021 Credit Agreement amortization.
Previous wording
Income tax provision in the thirteen weeks ended June 29, 2025 decreased by $6.2 million to a provision of $0.1 million, compared to a provision of $6.3 million in the thirteen weeks ended June 30, 2024. The decrease was primarily due to the establishment of valuation allowance in 2024.
Current wording
Our income tax provision in the thirty-nine weeks ended September 28, 2025 was $0.1 million, which was a decrease of $5.7 million compared to aprovision of $5.8 million in the thirty-nine weeks ended September 29, 2024. The decrease was primarily due to the establishment of a valuation allowance in 2024.
Previous wording
revenue is typically highest in the second and third quarters due to the increased demand for event dresses in the spring and summer. Net revenue is typically the lowest in the first and fourth quarters when event dresses are less in demand. The seasonality of our business has resulted in variability in our total net revenue quarter-to-quarter. We believe that this seasonality has affected and will continue to affect our results of operations.
Current wording
We experience moderate seasonal fluctuations in aggregate sales volume during the year. Seasonality in our business does not follow that of traditional retailers, such as a typical concentration of revenue in the holiday quarter. Our net revenue is typically highest in the second and third quarters due to the increased demand for event dresses in the spring and summer. Net revenue is typically the lowest in the first and fourth quarters when event dresses are less in demand. The seasonality of our business has resulted in variability in our total net revenue quarter-to-quarter. We believe that this seasonality has affected and will continue to affect our results of operations.
Previous wording
Our primary sources of liquidity and capital resources are cash generated from operating activities as we have no further access to borrowings under our 2021 Credit Agreement, as amended. Our primary requirements for liquidity and capital are inventory purchases, payroll and general operating expenses, capital expenditures associated with our distribution facilities, capitalized software and debt service requirements.
Current wording
Our primary sources of liquidity and capital resources are cash generated from operating activities and our 2025 Credit Agreement, as amended. Our primary requirements for liquidity and capital are inventory purchases, payroll and general operating expenses, capital expenditures associated with our distribution facilities, capitalized software and debt service requirements.
Previous wording
In November 2021, we entered into the 2021 Credit Agreement that provided for borrowings up to $50.0 million with a maturity date of November 15, 2024.
Current wording
On November 15, 2021, we entered into the 2021 Credit Agreement with Bank of America (the “lender”)to provide a revolving facility that provided for borrowings up to $50.0 million with a maturity date of November 15, 2024. The 2021 Credit Agreement was amended subsequently by five amendments which modified a number of terms, including extending the maturity date to August 22, 2025, reducing and ultimately prohibiting further borrowings, revising the applicable interest rates, revising or providing limited waivers of compliance with certain financial covenants, and adding covenants related to achieving a refinancing transaction. The interest rates in effect under the 2021 Credit Agreement, as amended, during the thirteen and thirty-nine weeks ended September 28, 2025 were as follows:(a) in the case of Base Rate Loans, the Base Rate plus (i) 5% (increased from a margin of 4%), (b) in the case of Term SOFR Loans, Term SOFR (subject to a credit spread adjustment of 10 basis points) plus (i) 6% (increased from a margin of 5%), and (c) the Letter of Credit Fee of (i) 6% (increased from 5%).
Previous wording
On June 23, 2025, we entered into a Forbearance Agreement (the “Forbearance Agreement”) related to the 2021 Credit Agreement, as amended, with the lenders party thereto and Bank of America, N.A., as administrative agent (the “Administrative Agent”), and Swing Line Lender and an L/C Issuer (the “Lenders”). Pursuant to the terms of the Forbearance Agreement, the Administrative Agent and Lenders agreed that they would forbear, during the Forbearance Period (as defined below), from exercising any and all rights and remedies with respect to or arising out of the events of default that occurred as a result of the Company’s failure to comply with certain Refinancing Transaction Milestones by the specified dates under Sections 6.19(a), (c) and (d) of the 2021 Credit Agreement, as amended (collectively, the “Acknowledged Defaults”). The forbearance period (the “Forbearance Period”) under the Forbearance Agreement will expire on the earliest date that one of the following events occurs: (a) any Event of Default other than an Event of Default constituting the Acknowledged Defaults; (b) the breach by the Borrower of any covenant or provision of the Forbearance Agreement; or (c) 11:59 p.m. (Eastern time) on August 15, 2025 (the “Forbearance Termination Events”). Under the terms of the Forbearance Agreement, the Refinancing Transaction Milestones shall be due on the Maturity Date. Additionally, during the Forbearance Period, the minimum liquidity otherwise required to be maintained pursuant to the 2021 Credit Agreement, as amended, is $1,000,000, and to the extent the minimum liquidity prior to the Effective Date was below the required threshold, any resulting Default or Event of Default was waived. Pursuant to the Forbearance Agreement, the Company also agreed to provide additional financial and operational reports to the Administrative Agent during the Forbearance Period, including monthly unaudited financial statements and reports related to accounts receivable, accounts payable and inventory. The Forbearance Agreement also provides for mandatory prepayments in the event that Total Revolving Outstandings exceed the difference of 55% of the net book value of inventory less 50% of the store value credit liability. The Company will pay a one-time forbearance fee of $100,000.00 (the “Forbearance Fee”), fully earned and non-refundable as of the Effective Date and payable in immediately available funds upon the earlier of (a) the Maturity Date, and (b) the occurrence of a Forbearance Termination Event; provided, that, if all Obligations (other than the Forbearance Fee) have been paid in full on or prior to the Maturity Date, the Forbearance Fee shall be cancelled and waived.
Current wording
On June 23, 2025, we entered into a Forbearance Agreement (the “Forbearance Agreement”) related to the 2021 Credit Agreement with the lenders party thereto and Bank of America, N.A., as administrative agent (the “Administrative Agent”), and Swing Line Lender and an L/C Issuer (the “Lenders”). Pursuant to the terms of the Forbearance Agreement, the Administrative Agent and Lenders agreed that they would forbear, during the Forbearance Period (as defined in the Forbearance Agreement), from exercising any and all rights and remedies with respect to or arising out of the events of default that occurred as a result of the Company’s failure to comply with certain Refinancing Transaction Milestones by the specified dates under Sections 6.19(a), (c) and (d) of the 2021 Credit Agreement (collectively, the “Acknowledged
Previous wording
On May 3, 2024, our Board of Directors authorized a stock repurchase program to repurchase up to $2.5 million of our common stock (the “2024 Repurchase Program”). During the thirteen and twenty-six weeks ended June 29, 2025, we repurchased 73,333 shares and 89,471 shares, respectively, of common stock in open market transactions pursuant to a 10b5-1 purchase plan. As of June 29, 2025, there was $1.3 million available under the 2024 Repurchase Program authorization.
Current wording
On May 3, 2024, our Board of Directors authorized a stock repurchase program to repurchase up to $2.5 million of our common stock (the “2024 Repurchase Program”). During the thirteen and thirty-nine weeks ended September 28, 2025, we repurchased 34,463 shares and 123,934 shares, respectively, of common stock in open market transactions
Previous wording
During the twenty-six weeks ended July 2, 2024, net cash provided by operating activities was $10.6 million, which consisted of a net loss of $16.5 million, partially offset by non-cash charges of $12.7 million and a net change of $14.4 million in operating assets and liabilities. The non-cash charges were primarily comprised of $4.1 of equity-based compensation expense, $3.8 million of deferred income taxes, $2.7 million of depreciation and amortization, and $2.0 million of non-cash lease expense. The net change in operating assets and liabilities was primarily driven by a $15.2 million increase in accrued expenses driven by an increase in return reserve and a $3.0 million increase in accounts payable due to the timing of payments. These increases were partially offset by a $2.2 million increase in inventory and a $1.9 million decrease in operating lease liabilities.
Current wording
During the thirty-nine weeks ended September 28, 2025, net cash provided by operating activities was $5.1 million, which consisted of a net loss of $13.3 million, partially offset by non-cash charges of $11.1 million and a net change of $7.3 million in operating assets and liabilities. The non-cash charges were primarily comprised of $3.9 million of depreciation and amortization, $3.6 million of equity-based compensation expense, and $3.4 million of non-cash lease expense. The net change in operating assets and liabilities was primarily driven by a $10.6 million increase in accrued expenses primarily driven by increase in returns reserve and stored-value card liabilities; a $7.4 million increase in accounts payable related to purchases in line with the increase in sales; and a $3.0 million decrease in income tax receivable due to the receipt of state income tax refunds. These increases were partially offset by a $4.4 million increase in inventory, a $3.3 million decrease in operating lease liabilities, a $2.8 million decrease in assets for recovery and a $2.6 million increase in accounts receivable pertaining to higher credit card receivables.
Previous wording
Our primary investing activities have consisted of purchases of equipment to support our overall business growth and internally developed software for the continued development of our proprietary technology infrastructure. Purchases of property and equipment may vary from period to period due to the timing of the expansion of our operations. We have no material commitments for capital expenditures.
Current wording
Our primary investing activities have consisted of purchases of equipment to support our overall business growth and internally developed software for the continued development of our proprietary technology infrastructure. Purchases of property and equipment may vary from period to period due to the timing of the expansion or contraction of our operations. We have no material commitments for capital expenditures.
Previous wording
During the twenty-six weeks ended June 29, 2025, net cash used in investing activities decreased by $0.6 million as compared to the same period in 2024, primarily due to lower purchases of property and equipment.
Current wording
During the thirty-nine weeks ended September 28, 2025, net cash used in investing activities decreased by $0.8 million as compared to the same period in 2024, primarily due to lower purchases of property and equipment.
Previous wording
Financing activities consist primarily of borrowings and repayments related to our revolving facility under our 2021 Credit Agreement, as amended.
Current wording
Financing activities consist primarily of borrowings and repayments related to our revolving facility under our 2021 Credit Agreement and 2025 Credit Agreement.
Previous wording
During the twenty-six weeks ended June 29, 2025, cash used in financing activities was $8.8 million, primarily due to $7.3 million of repayments on our revolving facility, $0.7 million used in the repurchase of our common stock, and $0.6 million of principal payments on finance lease obligations.
Current wording
During the thirty-nine weeks ended September 28, 2025, cash used in financing activities was $6.0 million, primarily due to $42.2 million of repayments under our 2025 Credit Agreement, $13.1 million of repayments under our 2021 Credit Agreement, $0.9 million used in the repurchase of our common stock, and $1.0 million of principal payments on finance lease obligations, partially offset by $51.4 million of proceeds from borrowings under our 2025 Credit Agreement.
Previous wording
During the twenty-six weeks ended July 2, 2024, cash used in financing activities was $9.7 million, primarily due to $28.0 million of repayments on our revolving facility, $1.1 million of principal payments on finance lease obligations, and $0.8 million of withholding tax payments related to the vesting of equity-based awards, partially offset by $20.0 million of proceeds from borrowings on our revolving line of credit.
Current wording
During the thirty-nine weeks ended September 29, 2024, cash provided by financing activities was $1.1 million, primarily due to $31.5 million of proceeds from borrowings under our 2021 Credit Agreement which was partially offset by $28.0 million of repayments under our 2021 Credit Agreement, $1.4 million of principal payments on finance lease obligations, and $1.0 million of withholding tax payments related to the vesting of equity-based awards and $0.3 million used in the repurchase of our common stock.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Changing macroeconomic factors, including inflation, interest rates, student loan repayment resumption, tariffs or bans, world events, wars and domestic and international conflicts, existing and future laws, regulations and directives and executive orders, and overall consumer confidence with respect to current and future economic conditions have directly
Current report — wording carried from elsewhere
pursuant to a 10b5-1 purchase plan. As of September 28, 2025, there was $1.1 million available under the 2024 Repurchase Program authorization.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
We experience moderate seasonal fluctuations in aggregate sales volume during the year. Seasonality in our business does not follow that of traditional retailers, such as a typical concentration of revenue in the holiday quarter. Our net
Previous report — wording carried elsewhere
During the twenty-six weeks ended June 29, 2025, net cash provided by operating activities was $7.0 million, which consisted of a net loss of $11.0 million, partially offset by non-cash charges of $7.7 million and a net change of $10.3 million in operating assets and liabilities. The non-cash charges were primarily comprised of $2.8 of equity-based
Previous report — wording carried elsewhere
compensation expense, $2.6 million of depreciation and amortization, and $2.3 million of non-cash lease expense. The net change in operating assets and liabilities was primarily driven by a $20.5 million increase in accrued expenses driven by an increase in marketing cost, accrued inventory, and returns reserve; and a $3.0 million decrease in income tax receivable due to the receipt of state income tax refunds. These increases were partially offset by a $4.6 million decrease in accounts payable related to the timing of payments, a $3.3 million increase in inventory, and a $2.3 million decrease in operating lease liabilities.