What the changes say
- Lulu's Fashion Lounge faces severe tariff hikes on Chinese goods reaching up to 152.5% in 2025.
- Liquidity is tight with $14.4 million borrowed under the 2025 Credit Agreement leaving $1.3 million in unused availability.
- A Schedule 13D filed by an activist stockholder in January 2026 adds legal and operational disruptions.
What changed since the prior 10-K
New
- NewRisks Related to Our Business
results of operations may be materially adversely affected. We anticipate that, as our market becomes increasingly competitive, maintaining, and enhancing our brand may become increasingly difficult and expensive
Negative publicity on social media or among our influencer network could harm brand awareness and reduce traffic to www.lulus.com or our mobile app.
- NewRisks Related to Our Business
advertising has increased, the cost for some of these services has also increased. A significant increase in the cost of the marketing providers upon which we rely could adversely impact our ability to attract customers cost effectively and harm our business, financial condition, results of operations, and prospects
Any ban or restriction on TikTok, heavily used for Gen Z marketing, could impair customer acquisition and engagement.
- NewRisks Related to Our Business
Changes in international trade regulation, including increases in tariff rates and the imposition of additional tariffs, could increase our costs and adversely impact our business
Incremental U.S. tariffs on goods imported from China reached 152.5% in 2025, increasing sourcing costs and disrupting planning.
- NewRisks Related to Our Business
A growing portion of our revenue is derived from wholesale partners, and changes in our relationships with, or the loss of, wholesale partners could adversely impact our financial condition and results of operations
A growing portion of our revenue comes from wholesale partners, and the loss or reduced purchases of any major partner could harm our financial condition.
- NewRisks Related to Our Indebtedness
As of December 28, 2025, the outstanding borrowing under the 2025 Credit Agreement was $14.4 million in addition to a $0.3 million letter of credit outstanding. After giving effect to the excess availability covenant and the outstanding letter of credit, the unused availability was $1.3 million
As of December 28, 2025, our 2025 Credit Agreement had $14.4 million in outstanding borrowings and only $1.3 million in unused availability.
- NewRisks Related to Our Growth
As we continue to pursue our international growth strategy, our success will largely depend on our ability to manage the unique challenges presented by international markets
Expanding our international sales exposes us to foreign regulatory, legal, and consumer preference challenges.
- NewRisks Related to Our Technology Infrastructure
online purchases, including by injecting malicious code or scripts on website pages or by gaining unauthorized access to payment systems. As an online retailer, we may be targeted with similar attempts
Malicious code, scripts, or cyberattacks on our payment systems or website could disrupt our operations as an online retailer.
- NewRisks Related to the Supply of Our Products
damage to, or increased costs in the manufacture of the merchandise we offer could result in higher prices to acquire the merchandise or non-delivery of merchandise altogether and could adversely affect our results of operations
Rising costs for cotton, synthetics, labor, and ocean freight can increase our manufacturing and sourcing expenses.
- NewRisks Related to Regulation, Taxation and Litigation
and defense obligations. Any legal claims or litigation could have a material adverse effect on our business, financial condition, and results of operations
Claims regarding unlicensed merchandise or online service provider liability could subject us to civil and criminal damages.
- NewRisks Related to Ownership of Our Common Stock
There could be a material disruption to our business as a result of activist stockholders or others
An activist stockholder filed a Schedule 13D on January 9, 2026, proposing changes that divert management time and increase costs.
- NewRisks Related to Ownership of Our Common Stock
We incurred goodwill impairment charges in the past and may incur goodwill or intangible asset impairment charges again in the future, which could adversely affect our business, financial condition and results of operations
We recorded a goodwill impairment charge of $28.4 million in the fourth quarter of 2024 due to declining stock price and net losses.
- NewRisks Related to Ownership of Our Common Stock
reporting unit exceeded the fair value, and a goodwill impairment charge of $28.4 million was recorded, while $7.0 million of goodwill remained on our consolidated balance sheet. No goodwill impairment was recorded for the year ended December 28, 2025
Further stock price declines or economic shifts could trigger additional goodwill or intangible asset impairment charges in 2026 or later.
Dropped
- DroppedRisks Related to Our Business
in violation of applicable regulations. For example, in some cases, the FTC has sought enforcement action where an endorsement has failed to clearly and conspicuously disclose a financial relationship between an influencer and an advertiser
- DroppedRisks Related to Our Business
International trade disputes and tariffs imposed by the U.S. Government or a global trade war could adversely impact our business
- DroppedRisks Related to Our Indebtedness
In November 2021, we entered into a Credit Agreement (the “2021 Credit Agreement”) with Bank of America (the “lender”) to provide a Revolving Facility (the “2021 Revolving Facility”) that provided for borrowings up to $50.0 million with a maturity date of November 15, 2024
- DroppedRisks Related to Our Growth
We may not be able to manage our growth effectively, and such growth may adversely affect our corporate culture
- DroppedRisks Related to Our Industry
our competitors and entry of new competitors or expansion of existing competitors into our markets could have a material adverse effect on our business, financial condition, and results of operations
- DroppedRisks Related to Our Technology Infrastructure
by insurance or is in excess of insurance coverage would increase our operating expenses and reduce our net income, if any, or increase our net loss
- DroppedRisks Related to the Supply of Our Products
in significant future charges or disruptions in our operations, and we may not achieve the expected benefits from these changes, which could result in an adverse impact on our operating results, cash flows and financial condition
FTC enforcement actions for influencer disclosures and negative social media commentary.
- DroppedRisks Related to the Supply of Our Products
We plan to increase the number of direct sourcing relationships with manufacturers overseas but have limited experience in this type of sourcing arrangement, which may expose us to new risks and have a material adverse effect on our business, financial condition, and results of operations
- DroppedRisks Related to the Supply of Our Products
items that we contract to manufacture, as well as AB 701 (the “Warehouse Quotas Law”), which requires us to ensure that quotas do not interfere with warehouse worker meal and rest periods under California’s wage orders
- DroppedRisks Related to the Supply of Our Products
Our current and future products may experience quality problems from time to time that could result in negative publicity, litigation, product recalls and warranty claims, which could result in decreased net revenue and harm to our brand
- DroppedRisks Related to Regulation, Taxation and Litigation
U.S. import taxation levels may increase and could harm our business
Trade disputes and potential tariffs following the U.S. presidential transition.
- DroppedRisks Related to Our Company and Our Ownership Structure
Operating and managing a public company presents new challenges
- DroppedRisks Related to Ownership of Our Common Stock
We have received notice of delisting from Nasdaq
Reworded
- 100% rewrittenRisks Related to Our Indebtedness
We have outstanding borrowings and we may incur additional indebtedness in the future, which may require us to use a portion of our cash flow to service debt and limit our financial and operating flexibility
Replaced the 2021 Bank of America facility with the new August 2025 White Oak Commercial Finance credit agreement providing a $20 million revolving facility at SOFR plus 3.95%.
- 96% rewrittenRisks Related to Ownership of Our Common Stock
Our common stock market price and trading volume could decline if securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business
Updated to reflect that limited analysts currently cover Lulu's common stock, impacting trading volume and share price appreciation.
Was: If securities analysts or industry analysts downgrade our shares, publish negative research or reports, or do not publish reports about our business, our share price and trading volume could decline
- 94% rewrittenRisks Related to Our Business
If we are unable to continue connecting with our target customer base through effective marketing channels, it could have a material adverse effect on our business, financial condition, and results of operations
Added acknowledgment that despite multi-channel marketing efforts, customer acquisition remains significantly dependent on key digital platforms and third-party channels.
- 79% rewrittenRisks Related to Ownership of Our Common Stock
Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial results or financial condition
Retained standard accounting complexity disclosures while updating reference footnotes for the current Form 10-K.
- 78% rewrittenRisks Related to the Supply of Our Products
We have two distribution facilities and disruptions to the operations at these locations could have a material adverse effect on our business, financial condition, and results of operations
Removed mention of the closed Chico, California facility consolidation and focused strictly on operational dependence on the California and Pennsylvania distribution centers.
- 75% rewrittenRisks Related to Our Growth
We may not be able to manage our growth effectively, and such growth may adversely affect our existing resources and cause us to encounter challenges we have not faced before
Updated net revenue figures from $316 million in 2024 to $282 million in 2025 to reflect recent financial performance.
Was: Our current growth plans may place a strain on our existing resources and could cause us to encounter challenges we have not faced before
- 71% rewrittenRisks Related to the Supply of Our Products
Any failure by us or our suppliers to comply with product safety, labor or other laws, our Vendor and Supplier Code of Conduct, or our standard terms and conditions, or to provide safe factory conditions for their workers may damage our reputation and brand and harm our business
Retained product safety and CPSC regulation disclosures regarding voluntary removals and recalls.
- 64% rewrittenRisks Related to the Supply of Our Products
Our business, including our costs and supply chain, is subject to risks associated with sourcing, manufacturing, and warehousing
Retained core sourcing and price fluctuation risks associated with third-party suppliers and direct factory relationships.
- 62% rewrittenRisks Related to Our Business
We rely on third parties to drive traffic to our platform, which could negatively affect our business, financial condition, cash flows, and results of operations
- 61% rewrittenRisks Related to Our Industry
The global apparel industry is subject to intense pricing pressure
- 56% rewrittenRisks Related to Our Merchandise and Inventory
If new trade restrictions are imposed or existing trade restrictions become more burdensome, our ability to source imported merchandise efficiently and cost effectively could be materially adversely affected
- 50% rewrittenRisks Related to Regulation, Taxation and Litigation
We may be subject to liability and other risks if we, our suppliers or the manufacturers of our merchandise infringe upon the trademarks, copyrights or other intellectual property rights of third parties, including the risk that we could acquire merchandise from our suppliers without the full right to sell it
- 49% rewrittenRisks Related to Our Technology Infrastructure
The use of technology based on artificial intelligence presents risks relating to confidentiality, creation of inaccurate and flawed outputs and emerging regulatory risk, any or all of which may adversely affect our business and results of operations
- 49% rewrittenRisks Related to the Supply of Our Products
Many of our third-party suppliers and manufacturers are based in China, which exposes us to risks inherent in doing business there
- 44% rewrittenRisks Related to Our Business
We may not accurately forecast income and appropriately plan our expenses
- 40% rewrittenRisks Related to Our Business
Our efforts to acquire or retain customers may not be successful, which could prevent us from maintaining or increasing our sales
- 38% rewrittenRisks Related to Our Business
We are subject to payment-related risks that could increase our operating costs, expose us to fraud or theft, subject us to potential liability and potentially disrupt our business
- 35% rewrittenRisks Related to Our Business
If we fail to provide high-quality customer support or have significant changes to policies and/or services, third party or otherwise, it could have a material adverse effect on our business, financial condition, and results of operations
- 31% rewrittenRisks Related to Ownership of Our Common Stock
We expect that our stock price will fluctuate significantly, which could cause the value of investments in our common stock to decline, and investors may not be able to resell their shares at a price at or above the price for which they purchased them
- 30% rewrittenRisks Related to Our Merchandise and Inventory
If we are not able to successfully maintain our desired merchandise assortment or manage our inventory effectively, we may be unable to attract a sufficient number of customers or sell sufficient quantities of our merchandise, which could result in excess inventories, markdowns, and foregone sales
- 30% rewrittenRisks Related to Our Business
Use of social media, influencers, affiliate marketing, email, SMS, podcast advertisements, promotional partnerships and direct mail may adversely impact our brand and reputation or subject us to fines or other penalties
- 30% rewrittenRisks Related to Our Merchandise and Inventory
Merchandise returns and damages could harm our business
- 27% rewrittenRisks Related to Regulation, Taxation and Litigation
We are subject to data security and privacy risks that could negatively affect our results, operations or reputation
- 22% rewrittenRisks Related to Regulation, Taxation and Litigation
If our suppliers fail to comply with applicable laws, including a failure to use acceptable labor practices, or if our suppliers suffer disruptions in their businesses, we could suffer adverse business consequences
- 20% rewrittenRisks Related to Ownership of Our Common Stock
We are an emerging growth company, smaller reporting company, and non-accelerated filer, and the reduced disclosure requirements applicable to these statuses may make our common stock less attractive to investors
Was: We are an emerging growth company and smaller reporting company, and the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies may make our common stock less attractive to investors
All 78 risk factors
Headings as the filing states them, in filing order.
Risks Related to Our Business
- 01results of operations may be materially adversely affected. We anticipate that, as our market becomes increasingly competitive, maintaining, and enhancing our brand may become increasingly difficult and expensiveNew
- 02Our efforts to acquire or retain customers may not be successful, which could prevent us from maintaining or increasing our sales40% rewritten
- 03We may be unable to maintain a high level of engagement with our customers and increase their spending with us, which could harm our business, financial condition, cash flows, or results of operations
- 04Our success depends on our ability to anticipate, identify, measure, and respond quickly to new and rapidly changing fashion trends, customer preferences and demands and other factors
- 05We rely on third parties to drive traffic to our platform, which could negatively affect our business, financial condition, cash flows, and results of operations62% rewritten
- 06advertising has increased, the cost for some of these services has also increased. A significant increase in the cost of the marketing providers upon which we rely could adversely impact our ability to attract customers cost effectively and harm our business, financial condition, results of operations, and prospectsNew
- 07Certain of our key operating metrics are subject to inherent challenges in measurement and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business
- 08Use of social media, influencers, affiliate marketing, email, SMS, podcast advertisements, promotional partnerships and direct mail may adversely impact our brand and reputation or subject us to fines or other penalties30% rewritten
- 09If we are unable to continue connecting with our target customer base through effective marketing channels, it could have a material adverse effect on our business, financial condition, and results of operations94% rewritten
- 10We may not accurately forecast income and appropriately plan our expenses44% rewritten
- 11If we fail to provide high-quality customer support or have significant changes to policies and/or services, third party or otherwise, it could have a material adverse effect on our business, financial condition, and results of operations35% rewritten
- 12Changes in international trade regulation, including increases in tariff rates and the imposition of additional tariffs, could increase our costs and adversely impact our businessNew
- 13 A growing portion of our revenue is derived from wholesale partners, and changes in our relationships with, or the loss of, wholesale partners could adversely impact our financial condition and results of operationsNew
- 14Our business is affected by seasonality, which could result in fluctuations in our results of operations
- 15We are subject to payment-related risks that could increase our operating costs, expose us to fraud or theft, subject us to potential liability and potentially disrupt our business38% rewritten
- 16Our cash could be adversely affected if the financial institutions in which we hold our cash fail
- 17We may incur significant losses from customer and/or credit card fraud and theft
Risks Related to Our Indebtedness
- 18We have outstanding borrowings and we may incur additional indebtedness in the future, which may require us to use a portion of our cash flow to service debt and limit our financial and operating flexibility100% rewritten
- 19As of December 28, 2025, the outstanding borrowing under the 2025 Credit Agreement was $14.4 million in addition to a $0.3 million letter of credit outstanding. After giving effect to the excess availability covenant and the outstanding letter of credit, the unused availability was $1.3 millionNew
Risks Related to Our Growth
- 20The estimates of market opportunity and forecasts of market growth included in this Annual Report on Form 10-K may prove to be inaccurate, and even if the markets in which we compete achieve the forecasted growth, our business may not grow at similar rates, or at all
- 21Our past results may not be indicative of future results
- 22We have a history of net losses and we may not be able to achieve or maintain profitability in the future
- 23We may not be able to successfully implement our growth strategy
- 24We may not be able to manage our growth effectively, and such growth may adversely affect our existing resources and cause us to encounter challenges we have not faced before75% rewritten
- 25As we continue to pursue our international growth strategy, our success will largely depend on our ability to manage the unique challenges presented by international marketsNew
Risks Related to Our Industry
- 26The global apparel industry is subject to intense pricing pressure61% rewritten
- 27We rely on consumer discretionary spending and may be adversely affected by economic downturns and other macroeconomic conditions or trends
Risks Related to Our Merchandise and Inventory
- 28If we are not able to successfully maintain our desired merchandise assortment or manage our inventory effectively, we may be unable to attract a sufficient number of customers or sell sufficient quantities of our merchandise, which could result in excess inventories, markdowns, and foregone sales30% rewritten
- 29Our ability to obtain merchandise on a timely basis at competitive prices could suffer as a result of any deterioration or change in our supplier relationships or events that adversely affect our suppliers or their ability to obtain financing for their operations
- 30If new trade restrictions are imposed or existing trade restrictions become more burdensome, our ability to source imported merchandise efficiently and cost effectively could be materially adversely affected56% rewritten
- 31Merchandise returns and damages could harm our business30% rewritten
Risks Related to Our Technology Infrastructure
- 32online purchases, including by injecting malicious code or scripts on website pages or by gaining unauthorized access to payment systems. As an online retailer, we may be targeted with similar attemptsNew
- 33We continually update, augment and add technology systems, which could potentially disrupt our operations and have a material adverse effect on our business, financial condition, and results of operations
- 34We may not be able to successfully implement these new systems or, if implemented, we may still face unexpected disruptions or cost overruns in the future, any of which could have a material adverse effect on our business, financial condition, and results of operations
- 35Our business relies heavily on email, SMS and other messaging services, and any restrictions on the sending of emails or messages or an inability to timely deliver such communications could materially adversely affect our business, financial condition, and results of operations
- 36Some of our software and systems contain open source software, which may pose particular risks to our proprietary applications
- 37The use of technology based on artificial intelligence presents risks relating to confidentiality, creation of inaccurate and flawed outputs and emerging regulatory risk, any or all of which may adversely affect our business and results of operations49% rewritten
- 38Government regulation of the Internet and eCommerce is evolving and unfavorable changes or failure by us to comply with these regulations could substantially harm our business and results of operations
Risks Related to the Supply of Our Products
- 39Our business, including our costs and supply chain, is subject to risks associated with sourcing, manufacturing, and warehousing64% rewritten
- 40damage to, or increased costs in the manufacture of the merchandise we offer could result in higher prices to acquire the merchandise or non-delivery of merchandise altogether and could adversely affect our results of operationsNew
- 41We have two distribution facilities and disruptions to the operations at these locations could have a material adverse effect on our business, financial condition, and results of operations78% rewritten
- 42Many of our third-party suppliers and manufacturers are based in China, which exposes us to risks inherent in doing business there49% rewritten
- 43Any failure by us or our suppliers to comply with product safety, labor or other laws, our Vendor and Supplier Code of Conduct, or our standard terms and conditions, or to provide safe factory conditions for their workers may damage our reputation and brand and harm our business71% rewritten
- 44We rely upon independent third-party transportation providers for substantially all of our merchandise shipments and any disruptions or increased transportation costs could have a material adverse effect on our business, financial condition, and results of operations
Risks Related to Regulation, Taxation and Litigation
- 45We may be subject to liability and other risks if we, our suppliers or the manufacturers of our merchandise infringe upon the trademarks, copyrights or other intellectual property rights of third parties, including the risk that we could acquire merchandise from our suppliers without the full right to sell it50% rewritten
- 46and defense obligations. Any legal claims or litigation could have a material adverse effect on our business, financial condition, and results of operationsNew
- 47A failure to comply with current laws, rules and regulations or changes to such laws, rules and regulations and other legal uncertainties may adversely affect our business, financial performance, results of operations or business growth
- 48We may be unable to protect our trademarks or other intellectual property rights
- 49We are subject to data security and privacy risks that could negatively affect our results, operations or reputation27% rewritten
- 50If our suppliers fail to comply with applicable laws, including a failure to use acceptable labor practices, or if our suppliers suffer disruptions in their businesses, we could suffer adverse business consequences22% rewritten
- 51Changes in laws, including employment laws and laws related to our merchandise, could make conducting our business more expensive or otherwise cause us to change the way we do business, which could have a material adverse effect on our business, financial condition, and results of operations
- 52Amendments to existing tax laws, rules or regulations or enactment of new unfavorable tax laws, rules or regulations could have an adverse effect on our business, financial condition, and results of operations
- 53The application of indirect taxes could adversely affect our business and results of operations
- 54Regulations related to conflict minerals may cause us to incur additional expenses and could limit the supply and increase the costs of certain metals used in the manufacturing of our products
Risks Related to Our Company and Our Ownership Structure
- 55We may require additional capital to support business growth and this capital might not be available or may be available only by diluting existing stockholders
- 56Concentration of ownership among our existing executive officers, directors and principal stockholders may prevent new investors from influencing significant corporate decisions
- 57Anti-takeover provisions in our amended and restated certificate of incorporation and bylaws and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock
- 58These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board of Directors, which is responsible for appointing the members of our management
- 59Lulu’s Fashion Lounge Holdings, Inc. is a holding company with no operations of its own and, as such, it depends on its subsidiaries for cash to fund its operations and expenses, including future dividend payments, if any
Risks Related to Ownership of Our Common Stock
- 60We expect that our stock price will fluctuate significantly, which could cause the value of investments in our common stock to decline, and investors may not be able to resell their shares at a price at or above the price for which they purchased them31% rewritten
- 61 There could be a material disruption to our business as a result of activist stockholders or others New
- 62Short sellers of our stock may be manipulative and may drive down the market price of our common stock
- 63Our common stock market price and trading volume could decline if securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business96% rewritten
- 64Future sales of our common stock in the public market could cause the market price of our common stock to decrease significantly
- 65Certain of our outstanding shares of common stock are “restricted securities,” as defined under Rule 144 under the Securities Act and eligible for sale in the public market subject to the requirements of Rule 144
- 66We cannot guarantee that the 2024 Repurchase Program will enhance long-term stockholder value. Stock repurchases could also increase the volatility of the trading price of our stock and could diminish our cash reserves
- 67We do not intend to pay dividends on our common stock and, consequently, the ability of common stockholders to achieve a return on investment will depend on appreciation, if any, in the price of our common stock
- 68Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial results or financial condition79% rewritten
- 69We incurred goodwill impairment charges in the past and may incur goodwill or intangible asset impairment charges again in the future, which could adversely affect our business, financial condition and results of operationsNew
- 70reporting unit exceeded the fair value, and a goodwill impairment charge of $28.4 million was recorded, while $7.0 million of goodwill remained on our consolidated balance sheet. No goodwill impairment was recorded for the year ended December 28, 2025New
- 71There are claims made against us from time to time that can result in litigation that could distract management from our business activities and result in significant liability or damage to our brand
- 72We depend on our senior management personnel and may not be able to retain or replace these individuals or recruit additional personnel, which could have a material adverse effect on our business, financial condition, and results of operations
- 73Our results of operations could be adversely affected by natural disasters, public health crises, political crises, or other catastrophic events
- 74Climate change and increased focus by governmental and non-governmental organizations, customers, consumers and investors on sustainability issues, including those related to climate change, may adversely affect our business and financial results and damage our reputation
- 75We are an emerging growth company, smaller reporting company, and non-accelerated filer, and the reduced disclosure requirements applicable to these statuses may make our common stock less attractive to investors20% rewritten
- 76Failure to achieve and maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business, financial condition, and results of operations
- 77The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain executive management and qualified board members
- 78A global health emergency, epidemic or pandemic could have a material adverse effect on our business
Other Lulu's Fashion Lounge Holdings 10-Ks
- FY2024 10-K risk factors79 risks
Customer acquisition costs and repeat purchase engagement dominate Lulu's fashion e-commerce risk profile.
Filed Mar 27, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.