Lulu's Fashion Lounge (LVLU) Q4 2025 earnings summary

Executive summary

• Achieved three consecutive quarters of positive adjusted EBITDA and four consecutive quarters of product margin expansion, driven by operational efficiencies and cost reductions.

• Event-driven categories, especially bridesmaid and special occasion wear, showed sustained demand and multi-year growth.

• Wholesale business delivered triple-digit year-over-year growth, expanding into major retail partners and launching on Amazon.

• Streamlined operations, consolidated distribution centers, and optimized inventory, resulting in improved margins and reduced return rates.

• Entered 2026 with a leaner cost structure, enhanced liquidity from a new asset-based credit facility, and net debt expected between $7.5M and $8M at Q1 end.

Financial highlights

• Q4 net revenue was $63M, down 5% year-over-year; full-year net revenue was $282.3M, down 11%.

• Q4 gross margin expanded 640 bps to 44.3%, highest since 2021; full-year gross margin up 200 bps to 43.2%.

• Q4 net loss improved to $0.4M from $31.9M loss last year; full-year net loss was $13.7M, improved from $55.3M.

• Q4 adjusted EBITDA was $2.6M (+4.2% margin), up from a $3.3M loss (-5% margin) last year; FY25 Adjusted EBITDA was $(1.2)M, up from $(9.7)M in FY24.

• Inventory at year-end was $32.4M, down 4.7% year-over-year.

Outlook and guidance

• FY26 Adjusted EBITDA expected to turn positive, with improved net revenue growth trend versus FY25's -11%.

• Capital expenditures projected at $2M–$2.5M for 2026, similar to 2025.

• Q1 2026 adjusted EBITDA expected to be negative due to seasonality and inventory clearance, but improved year-over-year.

• Net debt projected between $7.5M and $8M at end of Q1'26.