Lulu's Fashion Lounge Holdings, Inc.
For the period ended Jun 29, 2025. Filed Aug 13, 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.
Jun 29, 2025 · Filed Aug 13, 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 2025-03-30; filed 2025-05-14.
0001558370-25-007733
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent 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 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 118 previous paragraphs and 146 current paragraphs.
80 unchanged; 26 reworded; 36 added; 8 removed; 4 previous and 4 current paragraphs rearranged.
Tables are not compared: 17 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 (36)
Current report
Recent Developments
Current report
Transfer to Nasdaq Capital Market
Current 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.
Current report
Departure of Chief Financial Officer
Current 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.
Current report
Reverse Stock Split
Current 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.
Current report
Compliance with Nasdaq Continued Listing Standards
Current 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.
Current 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.
Current 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.
Current report
Amendment to Forbearance Agreement and Fifth Amendment to 2021 Credit Agreement, As Amended
Current 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.
Current report
Income Tax Benefit (Provision)
Current report
Income Tax Provision
Current report
Comparisons for the Twenty-Six Weeks Ended June 29, 2025 and June 30, 2024
Current report
Net Revenue
Current 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.
Current report
Cost of Revenue
Current report
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 report
Gross Profit
Current report
Selling and Marketing Expenses
Current report
General and Administrative Expenses
Current report
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 report
*Interest Expense
Current report
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 report
Income Tax Benefit (Provision)
Current 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.
Current report
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 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.
Current report
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
Current report
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.
Current report
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 report
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 report
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 report
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.
Removed paragraphs (8)
Previous report
Since our IPO, we have incurred significant legal, accounting, and other expenses that we did not incur as a private company. We expect that compliance with the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as rules and regulations subsequently implemented by the SEC, will continue to increase our legal and financial compliance costs and will make some activities more time-consuming and costly.
Previous report
Income Tax Benefit
Previous report
Income Tax Benefit
Previous report
rate was 9.4%. For further information on the 2021 Credit Agreement, as amended, see Note 5,Debt of the accompanying notes to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Previous report
The Fourth Credit Amendment reduced our Revolving Commitment to $7.5 million on April 30, 2025. Subsequent to March 30, 2025, we repaid $2.8 million of the revolving line of credit balance and reduced our outstanding letters of credit by $0.3 million on or before April 30, 2025. As of the filing date of this Quarterly Report on Form 10-Q, we had $7.3 million outstanding on the revolving line of credit and $0.2 million in outstanding letters of credit. The Fourth Credit Amendment provides for a further reduction of our Revolving Commitment to $6.0 million on May 31, 2025.
Previous report
During the thirteen weeks ended March 30, 2025, net cash provided by operating activities increased by $1.4 million, as compared to the same period in 2024. The increase was primarily due to receipt of a $3.4 million income tax refund which consisted of $0.4 million of interest accrued during the thirteen weeks ended March 30, 2025 and the related $3.0 million of prior year state income tax overpayments that were included in our income tax receivable at the end of fiscal year 2024, a $1.0 million increase in accrued expenses and other current liabilities primarily driven by an increase in return reserve, a $0.5 million increase related to other noncurrent liabilities driven by increased non-current deferred tax liabilities and a $0.2 million timing related increase in accrued inventory. This was partially offset by an increase of $2.4 million in our net loss after adjusting for non-cash items, a $0.6 million increase related to assets for recovery, a $0.3 million increase in accounts receivable pertaining to higher credit card receivables, a decrease of $0.2 million in accounts payable related to the timing of payments related to our credit card payables, anda $0.2 million decrease related to operating lease liabilities.
Previous report
During the thirteen weeks ended March 30, 2025, as compared to the same period in 2024, net cash used in investing activities increased by $0.4 million. This was attributable to $0.5 million lower capital expenditures for furniture, leasehold improvements, equipment, and construction in progress for our general operations, which was partially offset by $0.1 million invested in capitalized software development costs.
Previous report
During the thirteen weeks ended March 30, 2025, net cash used by financing activities increased by $0.6 million compared to the same period in 2024. The increase was primarily due to lower net borrowings of $10.0 million on our 2021 Credit Agreement, as amended, a $0.2 million increase related to the 2024 Repurchase Program and a $0.1 million decrease in proceeds received from issuance of common stock under our ESPP, partially offset by a $9.0 million decrease in repayments on our revolving facility, a $0.4 million increase in finance lease payments and a $0.3 million decrease in withholding tax payments related to vesting of RSUs.
Reworded paragraphs (26)
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 the 2024 10-K and Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q for the quarter ended March 30, 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, 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*.*
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 and regulations, directives (including 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
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.
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 weeks ended March 30, 2025, and March 31, 2024, the Company incurred net losses of $8.0 million and $5.7 million, respectively. As of March 30, 2025, we had total cash and cash equivalents of $8.6 million and $10.1 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 thirteen weeks ended March 30, 2025, we borrowed no amounts under the 2021 Credit Agreement, as amended, and repaid $3.0 million of the outstanding balance. Subsequent to March 30, 2025 and through the filing date of this Quarterly Report on Form 10-Q, the Company repaid an additional $2.8 million of the revolving line of credit balance and reduced its outstanding letters of credit by $0.3 million. See Note 5,Debt of the accompanying notes to our condensed consolidated financial statements for 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. 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.
Previous wording
We are actively seeking alternative debt financing and will continue 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. 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
Current wording
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 wording
Adjusted EBITDA is a non-GAAP financial measure that we calculate as net loss before interest expense, income taxes, depreciation and amortization adjusted to exclude the effects of equity-based compensation expense and other non-routine expenses. Adjusted EBITDA is a key measure used by management to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. We believe that adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors and others in understanding and evaluating our operating results and in comparing operating results across periods. We view Free Cash Flow as an important indicator of our liquidity because it measures the amount of cash we generate.
Current wording
Adjusted EBITDA is a non-GAAP financial measure that we calculate as net loss before interest expense, income taxes or benefit, depreciation and amortization adjusted to exclude the effects of equity-based compensation expense and other non-routine expenses. Adjusted EBITDA is a key measure used by management to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. We believe that Adjusted EBITDA and Adjusted EBITDA Margin provide useful information to investors and others in understanding and evaluating our operating results and in comparing operating results across periods. We view Free Cash Flow as an important indicator of our liquidity because it measures the amount of cash we generate.
Previous wording
Due to these limitations, Adjusted EBITDA, Adjusted EBITDA Margin, and Free Cash Flow should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP measures only supplementally. As noted in the table below, Adjusted EBITDA includes adjustments to exclude the impact of depreciation and amortization, interest expense, income taxes, equity-based compensation and goodwill impairment. It is reasonable to expect that some of these items will occur in future periods. However, we believe these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our business and may complicate comparisons of our internal results of operations and results of operations of other companies over time. In addition, Adjusted EBITDA includes adjustments for other items that we do not expect to regularly record. Each of the normal recurring adjustments and other adjustments described in this paragraph and in the following reconciliation table help management with a measure of our core operating performance over time by removing items that are not related to day-to-day operations. Adjusted EBITDA Margin is a non-GAAP financial measure that we calculate as Adjusted EBITDA (as defined above) as a percentage of our net revenue.
Current wording
Due to these limitations, Adjusted EBITDA, Adjusted EBITDA Margin, and Free Cash Flow should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP measures only supplementally. As noted in the table below, Adjusted EBITDA includes adjustments to exclude the impact of depreciation and amortization, interest expense, income taxes, and equity-based compensation. It is reasonable to expect that some of these items will occur in future periods. However, we believe these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our business and may complicate comparisons of our internal results of operations and results of operations of other companies over time. In addition, Adjusted EBITDA includes adjustments for other items that we do not expect to regularly record. Each of the normal recurring adjustments and other adjustments described in this paragraph and in the following reconciliation table help management with a measure of our core operating performance over time by removing items that are not related to day-to-day operations. Adjusted EBITDA Margin is a non-GAAP financial measure that we calculate as Adjusted EBITDA (as defined above) as a percentage of our net revenue.
Previous wording
A reconciliation to non-GAAP Free Cash Flow from net cash provided by operating activities for the thirteen weeks ended March 30, 2025 and March 31, 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 twenty-six weeks ended June 29, 2025 and June 30, 2024 is as follows:
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 March 30, 2025, we served 2.6 million Active Customers compared to 2.8 million for the trailing 12 months ended March 31, 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 June 29, 2025, we served 2.5 million Active Customers compared to 2.7 million for the trailing 12 months ended June 30, 2024.
Previous wording
amortization, and repairs and maintenance related to our distribution facilities; and charges related to inventory shrinkage, damages, and our allowance for excess or obsolete inventory. Cost of revenue is primarily driven by growth in orders placed by customers, the mix of the product available for sale on our site, and transportation costs related to inventory receipts from our suppliers. We expect our cost of revenue to fluctuate as a percentage of net revenue primarily due to how we manage our inventory and merchandise mix.
Current wording
Cost of revenue consists of the product costs of merchandise sold to customers; shipping and handling costs, including all inbound, outbound, and return shipping expenses; rent, insurance, business property tax, utilities, depreciation and amortization, and repairs and maintenance related to our distribution facilities; and charges related to inventory shrinkage, damages, and our allowance for excess or obsolete inventory. Cost of revenue is primarily driven by growth in orders placed by customers, the mix of the product available for sale on our site, and transportation costs related to inventory receipts from our suppliers. We expect our cost of revenue to fluctuate as a percentage of net revenue primarily due to how we manage our inventory and merchandise mix.
Previous wording
The benefit 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 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.
Previous wording
The Company regularly assesses the realizability of deferred tax assets and records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized. In assessing the realizability of our deferred tax assets, we weigh all available positive and negative evidence. This evidence includes, but is not limited to, historical earnings, scheduled reversal of taxable temporary differences, tax planning strategies and projected future taxable income.
Current wording
The Company regularly assesses the realizability of deferred tax assets and records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized. In assessing the realizability of our deferred tax assets, we weigh all available positive and negative evidence. This evidence includes, but is not limited to, historical earnings, scheduled reversal of taxable temporary differences, tax planning strategies and projected future taxable income. Due to the weight of objectively verifiable negative evidence, the Company established a valuation allowance of $14.9 million as of December 29, 2024 and the same position for the period ended June 29, 2025.
Previous wording
Net revenue decreased in the thirteen weeks ended March 30, 2025 by $13.1 million, or 17%, compared to the thirteen weeks ended March 31, 2024 primarily due to a 17% decrease in Total Orders Placed and the impact of lower AOV offset by lower return rates.
Current 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.
Previous wording
Cost of revenue decreased in the thirteen weeks ended March 30, 2025 by $6.3 million, or 14% compared to the same period of the prior year. The decrease in cost of revenue was primarily driven by the impact of lower revenue, partly offset by higher outbound shipping costs.
Current wording
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.
Previous wording
Gross profit decreased in the thirteen weeks ended March 30, 2025 by $6.8 million, or 21% 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 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.
Previous wording
General and administrative expenses decreased in the thirteen weeks ended March 30, 2025 by $3.1 million or 15%, compared tothe same period of the prior year. The decrease was primarily due to a $1.4 million decrease in fixed labor driven byreduced fixed headcount resulting from our cost reduction measures, a $0.5 million decrease in variable labor and benefits associated with lower sales volume, partly offset by temporary ramp up costs related to the consolidation of our West Coast distribution facilities, a $0.5 million decrease in equity-based compensation expense, a $0.5 million decrease in D&O liability insurance and legal and professional fees, a $0.1 million decrease in occupancy primarily related to rent and facility expenses and a $0.1 million decrease in software, supplies and travel.
Current 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.
Previous wording
Interest expense increased in the thirteen weeks ended March 30, 2025 by $0.2 million, or 51%, compared tothe same period of the prior year. The increase is attributable tohigher interest rates, partially offset by lower average borrowings.
Current 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.
Previous wording
Income tax benefit in the thirteen weeks ended March 30, 2025 decreased by $0.5 million to a benefit of $0.1 million, compared to a benefit of $0.6 million in the thirteen weeks ended March 31, 2024.
Current 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.
Previous wording
Selling and marketing expenses decreased in the thirteen weeks ended March 30, 2025 by $1.8 million, or 10%, compared tothe same period of the prior year, due to lower online marketing costs of $1.0 million, lower performance and awareness marketing spend of $0.5 million, and lower merchant processing fees of $0.3 million, partly due to the lower volume of sales.
Current 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.
Previous 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.
Current 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.
Previous wording
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. Pursuant to the Third Credit Amendment, there was no financial covenant test for the quarter ended September 29, 2024.
Current wording
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 wording
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 Total Leverage Ratio and Consolidated Fixed Charge Covenant Ratio for the fiscal quarter ending 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. 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.
Current wording
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 wording
During the thirteen weeks ended March 30, 2025, the Company borrowed no amounts under the 2021 Credit Agreement, as amended, and repaid $3.0 million of the outstanding balance. As of March 30, 2025, the Company had $0.5 million in letters of credit outstanding. The weighted average interest rate on the $10.1 million outstanding balance as of March 30, 2025, was 10.2%, and during the thirteen weeks ended March 30, 2025, the effective interest
Current wording
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 wording
As of March 30, 2025, we had cash and cash equivalents of $8.7 million. During the thirteen weeks ended March 30, 2025, we took certain cost reduction and cash conservation measures, adjustments to marketing spend, and other fixed, variable, and capital spend. We will continue to take certain cost reduction and cash conservation measures to meet our obligations as needed. As the ability to raise additional debt financing is outside of our control, we cannot conclude that our 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 relating to 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 and Part II, Item 1A,“Risk Factors” in this Quarterly Report on Form 10-Q for the quarter ended March 30, 2025.
Current wording
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.
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 weeks ended March 30, 2025, we repurchased 242,068 shares of common stock in open market transactions pursuant to a 10b5-1 purchase plan. As of March 30, 2025, there was $1.8 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 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.
Previous wording
The actual timing, number, and value of shares repurchased in the future will be determined at our discretion and will depend on a number of factors, including market conditions, applicable legal requirements, our capital needs, and whether there is a better alternative use of capital. Repurchases will be funded from our existing cash and cash equivalents, or future cash flow. The 2024 Repurchase Program may be modified, suspended, or terminated at any time. For further information on the 2024 Repurchase Program, see Note 2,Significant Accounting Policies, of the accompanying notes to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Current wording
The actual timing, number, and value of shares repurchased in the future will be determined at our discretion and will depend on a number of factors, including market conditions, applicable legal requirements, our capital needs, and whether there is a better alternative use of capital. Repurchases will be funded from our existing cash and cash equivalents, or future cash flow. The 2024 Repurchase Program may be modified, suspended, or terminated at any time. For further information on the 2024 Repurchase Program, see Note 2,Significant Accounting Policies, within the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.
Previous wording
Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates” in our 2024 10-K and the notes to the
Current wording
Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates” in our 2024 10-K and the notes to the audited consolidated financial statements appearing elsewhere in our 2024 10-K. There have been no significant changes to our critical accounting policies and estimates as disclosed in our 2024 10-K.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
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.
Current report — wording carried from elsewhere
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 report — wording carried from 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
Current report — wording carried from elsewhere
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
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
are issued. Accordingly, we have concluded that these plans do not alleviate substantial doubt about the Company's 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 — wording carried elsewhere
Cost of revenue consists of the product costs of merchandise sold to customers; shipping and handling costs, including all inbound, outbound, and return shipping expenses; rent, insurance, business property tax, utilities, depreciation and
Previous report — wording carried elsewhere
Due to the weight of objectively verifiable negative evidence, the Company established a valuation allowance of $14.9 million as of December 29, 2024 and the same position for the period ended March 30, 2025.
Previous report — wording carried elsewhere
audited consolidated financial statements appearing elsewhere in our 2024 10-K. There have been no significant changes to our critical accounting policies and estimates as disclosed in our 2024 10-K.