Lulu's Fashion Lounge Q2 revenue falls on fewer orders and higher returns
LVLU•Outlook
- Company reaffirms 2026 outlook for positive Adjusted EBITDA, compared with $(1.2) mln in 2025
- Company expects 2026 net revenue growth trend to improve year-over-year versus 11% decrease in 2025
- Lulus forecasts 2026 capital expenditures of $2.0 mln to $2.5 mln, in line with 2025
Quarterly results
- US women's apparel retailer's Q2 revenue fell 17% yr/yr, driven by fewer orders and higher returns
- Gross margin expanded 330 bps yr/yr to 48.6%, highest Q2 rate since 2021
- Net loss narrowed and adjusted EBITDA turned positive, reflecting improved profitability and inventory management
Result drivers and key details
- ORDER DECLINE AND RETURNS - Revenue fell due to a 17% decrease in total orders placed and higher return rates, partially offset by a slight increase in average order value and wholesale revenue
- MARGIN EXPANSION - Gross margin rose 330 bps yr/yr to 48.6%, attributed to disciplined inventory management and aligning assortment with customer demand
- WHOLESALE GROWTH - Wholesale business nearly doubled yr/yr, helping offset weaker direct channel sales
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