LVLU Stock Forecast & Price Target

Lulus Fashion Lounge Holdings Inc. has demonstrated a solid financial performance, evidenced by an 80 basis point expansion in gross margin to 45.5%, driven by reduced markdown sales and an enhanced product mix. The company's new and novelty sales experienced significant growth, rising 55% year-over-year, which, alongside a 5.9% increase in average order value (AOV) to $143, underscores strong consumer demand. Furthermore, despite a decline in total operating expenses, the company effectively managed costs with a 40 basis point deleverage to 46.6%, indicating efficient operational management and positioning for future profitability.

Lulus Fashion Lounge has experienced a significant decline in active customers, which fell by 10% year-over-year to 2.7 million, reflecting a broader downward trend in customer engagement. Total sales also demonstrated a downward trajectory, with a 13.3% year-over-year decline in the second quarter to $92.0 million, followed by a lesser but still negative 3.1% drop in the third quarter to $80.5 million. Furthermore, the company's management anticipates continued challenges, projecting single-digit year-over-year declines in fourth quarter comparables, indicating persistent weakness in revenue generation.