Lulu’s Fashion Lounge Holdings Inc

Company Overview: Lulu’s Fashion Lounge Holdings, Inc. (Lulus) is a women’s fashion brand in the United States primarily serving Millennial and Generation Z (Gen Z) women. The Company is focused on giving its customers what they want by using data coupled with human insight to deliver an assortment of luxury fashion.

As per our previous US Daily Report published on ‘LVLU’ on 10^th April 2023, Kalkine provided a ‘Speculative Buy’ stance on the stock at USD 2.03 based on “price action and technical indicators analysis” and the stock price has now moved down by ~34.97% since then.

Noted below are the details of support and resistance levels provided in our previous report:

LVLU’s Daily Chart

In Fiscal Year 2023, LVLU faced significant challenges as evidenced by a multitude of negative metrics. The company experienced a substantial 19% decrease in net revenue, amounting to USD 355.2 million, primarily driven by an 18% decline in Total Orders Placed, compounded by elevated return rates despite marginally higher Average Order Value (“AOV”) compared to the previous year. Active Customers dwindled by 12% to 2.8 million, marking a notable decrease from 3.2 million in 2022. Gross Margin saw a concerning decline of 180 basis points, resulting in a gross profit decrease of 23% compared to the previous year. The company reported a net loss of USD 19.3 million, a stark contrast to the net income of USD 3.7 million in 2022. Adjusted EBITDA plummeted to USD 3.2 million from USD 29.1 million in the previous fiscal year, reflecting a significant downturn in operational performance. Considering the above-mentioned fundamentals, current trading levels, risks associated, and volatile market conditions on the back of higher interest rates, a ‘Sell’ rating is assigned to the “LVLU” at the current market price of USD1.32 (as of 11 April 2024, 06:50 am PDT).  

Note: This report may be updated with details around fundamental and technical analysis, price/ chart in due course, as appropriate

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is April 11, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’