Lulus Q1 Revenue Drops 10% to $57.5M as Gross Margin Rises 480bps
First quarter net revenue fell 10% to $57.5M, driven by a 15% drop in orders despite a 4% rise in average order value to $142. Gross margin expanded 480bps to 45.1%, net loss narrowed to $4.1M from $8M, and net debt declined by $5.8M to $5.9M.
1. First Quarter Financial Performance
For the quarter ended March 29, 2026, net revenue totaled $57.5 million, down 10% year-over-year as total orders fell 15% despite a 4% rise in average order value to $142; active customers declined 11% to 2.3 million while wholesale revenue doubled from the prior-year period.
2. Margin Expansion and Profitability Gains
Gross margin expanded by 480 basis points to 45.1%, lifting gross profit to $25.9 million, while net loss narrowed to $4.1 million from $8.0 million a year earlier and Adjusted EBITDA improved by $3.2 million to a $1.5 million loss.
3. Balance Sheet Strength and Cash Flow
Inventory declined 17% to $33.1 million through disciplined assortment reset, and the company reduced total debt by $1.1 million and net debt by $5.8 million to $5.9 million; operating cash flow generated $6.9 million and free cash flow was $6.5 million.
4. Full-Year Outlook and Strategic Priorities
Management reaffirmed full-year guidance for positive Adjusted EBITDA and improving net revenue trend, with expectations for second quarter Adjusted EBITDA to turn positive and full-year capital expenditures of $2.0–$2.5 million.