The market expects Lovesac (LOVE) to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended April 2024. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report. On the other hand, if they miss, the s ...

About The Lovesac Company Based in Stamford, Connecticut, The Lovesac Company (NASDAQ: LOVE) is a technology driven company that designs, manufactures and sells unique, high-quality furniture derived through its proprietary Designed for Life approach which results in products that are built to last a lifetime and designed to evolve as customers' lives do. The current product offering is comprised of modular couches called Sactionals, premium foam beanbag chairs called Sacs, and the Sactionals StealthTech So ...

Built on a foundation of community and comfort, Lovesac products aim to bring family and friends together through extraordinary experiences at home. The Mother's Day Nomination program shifts the spotlight to the mother figures in our lives that support us throughout all stages of life. "At Lovesac, we recognize that mothers play an invaluable role in shaping our futures," said Shawn Nelson, Founder and CEO of Lovesac. "This Mother's Day, we are excited to give back and shine a light on these incredible mot ...

Lovesac store frontCourtesy of LovesacAs the furniture industry reels from a dramatic drop in consumer demand, Lovesac overcame market headwinds to report 7.5% growth in revenue in fiscal year 2024, reaching $700 million from $651 million the previous year.Lovesac’s LOVE advance is remarkable, given that furniture retail revenues dropped 5.7% in 2023 to $75.2 billion from an historic high of $80 billion in 2022. And the home furnishings retail sector continued to slide in the first quarter 2024 from previou ...

Part I [Business](index=5&type=section&id=Item%201.%20Business) Lovesac is a technology-driven furniture retailer specializing in modular Sactionals and Sacs, sold via an omni-channel platform Net Sales by Product (Fiscal Years 2022-2024) | Product | FY 2024 Sales % | FY 2023 Sales % | FY 2022 Sales % | | :--- | :--- | :--- | :--- | | Sactionals | 91.0% | 89.8% | 87.6% | | Sacs | 7.4% | 8.5% | 10.5% | Net Sales by Channel (Fiscal Years 2022-2024) | Channel | FY 2024 Sales % | FY 2023 Sales % | FY 2022 Sales % | | :--- | :--- | :--- | :--- | | Showrooms | 62.5% | 61.2% | 60.0% | | Ecommerce | 28.5% | 27.1% | 30.2% | | Other | 9.0% | 11.7% | 9.8% | - The company's supply chain is globally diversified, with manufacturing partners in the United States, China, Vietnam, Malaysia, Mexico, Taiwan, Indonesia, and India to mitigate concentration risk[37](index=37&type=chunk) - As of February 4, 2024, the company had **909 full-time** and **1,082 part-time** associates. The workforce was **55% female**, with women holding **46% of leadership roles**[56](index=56&type=chunk) - Lovesac has set long-term environmental goals, including reaching **zero waste** and **zero emissions by 2040** and repurposing **1 billion plastic bottles** in its products[47](index=47&type=chunk) [Risk Factors](index=11&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including growth management, supply chain reliance, internal control weaknesses, and cybersecurity threats - Business risks include the inability to manage growth, potential declines in discretionary consumer spending due to macroeconomic factors, and intense competition from a wide range of retailers[66](index=66&type=chunk)[71](index=71&type=chunk)[78](index=78&type=chunk) - The company is dependent on a **small number of third-party suppliers**, with manufacturing facilities located in countries like China, Vietnam, Malaysia, and Mexico, exposing it to supply chain, tariff, and geopolitical risks[88](index=88&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk) - Significant financial risks stem from a **restatement of prior financial statements** due to **material weaknesses in internal controls**. This has led to an **ongoing, non-public SEC investigation** and a putative **securities class action lawsuit** filed in December 2023[138](index=138&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk) - The company is subject to legal and regulatory risks, including unauthorized disclosure of sensitive data through security breaches, compliance with evolving data privacy laws (e.g., CCPA), and the need to protect its intellectual property[86](index=86&type=chunk)[149](index=149&type=chunk)[153](index=153&type=chunk) [Unresolved Staff Comments](index=35&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the SEC - None[182](index=182&type=chunk) [Cybersecurity](index=35&type=section&id=Item%201C.%20Cybersecurity) Lovesac manages cybersecurity risk through a formal strategy overseen by the CIO and Board's Audit Committee - The company's cybersecurity risk management program involves annual reviews of its IT control environment and engages third-party experts for risk assessments and penetration testing[184](index=184&type=chunk) - Oversight is provided by the Board of Directors and its Audit Committee, which receives **quarterly updates** from senior management, including the Chief Information Officer, on cybersecurity risks and initiatives[186](index=186&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk) - The Chief Information Officer, with **over 35 years of experience**, leads the assessment and management of cybersecurity risks[185](index=185&type=chunk) [Properties](index=36&type=section&id=Item%202.%20Properties) The company leases all its properties, including corporate offices and 230 showrooms across the U.S - The company's principal executive offices are leased in Stamford, CT (**22,480 sq ft**) and St. George, UT (**10,696 sq ft**)[189](index=189&type=chunk) - Lovesac leases retail space for **230 showrooms** throughout the majority of U.S. states[189](index=189&type=chunk) [Legal Proceedings](index=36&type=section&id=Item%203.%20Legal%20Proceedings) This section refers to Note 7 of the financial statements for a description of the company's legal proceedings - Information regarding legal proceedings is detailed in Note 7 to the financial statements[190](index=190&type=chunk) [Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[191](index=191&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=37&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under "LOVE"; it retains earnings for growth and does not pay dividends - The company's common stock is traded on **Nasdaq** under the symbol **"LOVE"**[194](index=194&type=chunk) - The company has **never paid cash dividends** and does not intend to pay them in the foreseeable future, retaining earnings for growth[195](index=195&type=chunk) Cumulative Total Stockholder Return Comparison (2/1/2019 - 2/4/2024) | Company/Index | Feb 1, 2019 | Feb 4, 2024 | | :--- | :--- | :--- | | The Lovesac Company | $100.00 | $96.97 | | Russell 2000 | $100.00 | $139.82 | | S&P 500 | $100.00 | $199.42 | [[Reserved]](index=38&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and not applicable - Not applicable[200](index=200&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes the company's financial condition and results, highlighting sales growth, gross margin improvement, and decreased operating income [Results of Operations (Fiscal 2024 vs. 2023)](index=41&type=section&id=7.1%20Results%20of%20Operations) Fiscal 2024 saw net sales increase by **7.5%** to **$700.3 million**, gross margin improve by **450 basis points**, but operating income declined due to higher expenses Key Financial Results (Fiscal 2024 vs. 2023) (in thousands) | Metric | Fiscal 2024 (in thousands) | Fiscal 2023 (in thousands) | Change % | | :--- | :--- | :--- | :--- | | Total Net Sales | $700,265 | $651,179 | 7.5% | | Gross Profit | $401,043 | $343,651 | 16.7% | | Gross Margin | 57.3% | 52.8% | +450 bps | | Operating Income | $30,076 | $36,966 | (18.6)% | | Net Income | $23,861 | $26,488 | (9.9)% | - The increase in net sales was driven by new showroom openings, with **46 openings** and **11 closures** during fiscal 2024, resulting in **230 total showrooms**[224](index=224&type=chunk)[226](index=226&type=chunk) - The **450 basis point increase** in gross margin was primarily driven by a **670 basis point decrease** in inbound transportation costs, partially offset by a **100 basis point decrease** in product margin from higher promotional discounting[229](index=229&type=chunk) - SG&A expenses increased by **$48.3 million (22.4%)**, driven by higher employment costs (**$21.3M**), increased overhead including professional fees for the financial restatement (**$18.6M**), and higher selling-related expenses (**$6.0M**)[230](index=230&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=7.2%20Liquidity%20and%20Capital%20Resources) The company's liquidity is strong, with cash and equivalents at **$87.0 million** driven by operating cash flow, and an undrawn **$40.0 million** credit facility Cash Flow Summary (in thousands) | Cash Flow Activity | Fiscal 2024 | Fiscal 2023 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $76,441 | $(21,375) | | Net cash used in investing activities | $(29,211) | $(25,549) | | Net cash used in financing activities | $(3,727) | $(1,935) | | **Cash and cash equivalents at end of period** | **$87,036** | **$43,533** | - The company believes cash from operations, its credit facility, and existing cash balances are sufficient to meet working capital and capital expenditure needs for at least the next 12 months[235](index=235&type=chunk) - As of February 4, 2024, the company had no outstanding borrowings under its **$40.0 million credit facility** and had **$36.0 million of availability**[245](index=245&type=chunk) [Critical Accounting Policies and Estimates](index=44&type=section&id=7.3%20Critical%20Accounting%20Policies%20and%20Estimates) Management identifies critical accounting policies involving significant estimates, including Barter Arrangements, Impairment of Long-Lived Assets, and Merchandise Inventories - The company has a barter arrangement to exchange open-box inventory for media credits. In fiscal 2024, it recognized **$12.3 million** in barter sales. Estimating the fair value of these credits is a critical estimate[249](index=249&type=chunk) - Long-lived assets, primarily showroom property and equipment, are reviewed for impairment if events indicate the carrying amount may not be recoverable. **No impairment charges** were recognized in fiscal 2024 or 2023[250](index=250&type=chunk)[251](index=251&type=chunk) - Merchandise inventories are carried at the lower of cost or net realizable value, with cost determined on a weighted-average basis. The company adjusts for obsolescence based on historical trends and future sales estimates[252](index=252&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks, primarily from interest rate fluctuations and inflation, which it mitigates through pricing and cost controls - The primary interest rate risk is from the floating-rate revolving line of credit, though **no material impact** on results is anticipated[259](index=259&type=chunk) - The company experienced inflationary pressures in fiscal 2024 and monitors its effects, using pricing strategies and cost reductions to minimize impact[260](index=260&type=chunk) [Financial Statements and Supplementary Data](index=46&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited financial statements and notes, with an unqualified audit opinion on both financials and internal controls Balance Sheet Summary (in thousands) | Account | Feb 4, 2024 | Jan 29, 2023 | | :--- | :--- | :--- | | **Total Assets** | **$482,180** | **$408,626** | | Total Current Assets | $214,448 | $187,715 | | Merchandise Inventories, net | $98,440 | $119,627 | | **Total Liabilities** | **$264,684** | **$215,532** | | Total Current Liabilities | $106,356 | $82,041 | | **Total Stockholders' Equity** | **$217,496** | **$193,094** | Statement of Operations Summary (in thousands) | Account | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 | | :--- | :--- | :--- | :--- | | Net Sales | $700,265 | $651,179 | $498,239 | | Gross Profit | $401,043 | $343,651 | $273,532 | | Operating Income | $30,076 | $36,966 | $40,578 | | **Net Income** | **$23,861** | **$26,488** | **$47,488** | | Diluted EPS | $1.45 | $1.66 | $2.96 | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=46&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports that there have been no changes in or disagreements with its accountants on any matter of accounting principles or practices, or financial statement disclosure - None[262](index=262&type=chunk) [Controls and Procedures](index=46&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, having successfully remediated previously identified material weaknesses as of February 4, 2024 - Management concluded that disclosure controls and procedures were **effective** as of the end of the period covered by this report (February 4, 2024)[264](index=264&type=chunk) - The previously disclosed material weaknesses related to an ineffective control environment have been **fully remediated** as of February 4, 2024[267](index=267&type=chunk)[268](index=268&type=chunk) - Remediation actions included enhancing the accounting function with experienced hires, updating the reporting structure, and implementing improved controls over manual journal entries and the transportation accrual process[268](index=268&type=chunk) - The independent registered public accounting firm, Deloitte & Touche LLP, issued an **unqualified opinion** on the effectiveness of the company's internal control over financial reporting as of February 4, 2024[271](index=271&type=chunk) [Other Information](index=50&type=section&id=Item%209B.%20Other%20Information) CEO Shawn D. Nelson adopted a Rule 10b5-1 trading plan for the potential sale of up to **42,000** shares of common stock, expiring December 11, 2024 - CEO Shawn D. Nelson adopted a Rule 10b5-1 trading plan for the sale of up to **42,000 shares** of common stock, effective from December 12, 2023, to December 11, 2024[277](index=277&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=50&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[278](index=278&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=51&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section provides information on the company's executive officers; further details will be incorporated by reference from the 2024 Proxy Statement Executive Officers (as of April 11, 2024) | Name | Age | Position | | :--- | :--- | :--- | | Shawn Nelson | 47 | Chief Executive Officer and Director | | Mary Fox | 51 | President and Chief Operating Officer | | Keith Siegner | 49 | Executive Vice President and Chief Financial Officer | - Additional required information will be incorporated by reference from the 2024 Proxy Statement[282](index=282&type=chunk) [Executive Compensation](index=52&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation will be incorporated by reference from the company's definitive 2024 Proxy Statement - The information required by this Item will appear in the 2024 Proxy Statement and is incorporated by reference herein[284](index=284&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=52&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section details securities authorized for issuance under equity compensation plans, with **996,749** securities remaining available Equity Compensation Plan Information (as of February 4, 2024) | Plan Category | Securities to be Issued Upon Exercise | Weighted-Average Exercise Price | Securities Remaining Available for Future Issuance | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by shareholders | 1,567,306 | $38.10 | 996,749 | - The remaining information required by this Item will be incorporated by reference from the 2024 Proxy Statement[287](index=287&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=53&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding related party transactions and director independence will be incorporated by reference from the company's definitive 2024 Proxy Statement - The information required by this Item will appear in the 2024 Proxy Statement and is incorporated by reference herein[288](index=288&type=chunk) [Principal Accounting Fees and Services](index=53&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services will be incorporated by reference from the company's definitive 2024 Proxy Statement - The information required by this Item will appear in the 2024 Proxy Statement and is incorporated by reference herein[289](index=289&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=54&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the documents filed as part of the Form 10-K report, including financial statements, audit reports, and an index of all exhibits - This section lists the financial statements and exhibits filed with the report. Financial statement schedules are omitted as they are not required, not applicable, or the information is included elsewhere[292](index=292&type=chunk)[293](index=293&type=chunk) [Form 10-K Summary](index=54&type=section&id=Item%2016.%20Form%2010-K%20Summary) This optional disclosure section was not included in the Annual Report on Form 10-K - Optional disclosure not included in this Annual Report on Form 10-K[294](index=294&type=chunk)

Exhibit 99.1 THE LOVESAC COMPANY REPORTS FOURTH QUARTER AND FISCAL 2024 FINANCIAL RESULTS Fourth Quarter Net Sales Growth of 5.0% Fiscal Year Net Sales Growth of 7.5% STAMFORD, Conn., April 11, 2024 (GLOBE NEWSWIRE) -- The Lovesac Company (Nasdaq: LOVE) ("Lovesac" or the "Company"), the home furnishing brand best known for its Sactionals, The World's Most Adaptable Couch, today announced financial results for the fourth quarter and fiscal 2024, which ended February 4, 2024. Note: Lovesac's fourth quarter an ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 29, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38555 THE LOVESAC COMPANY (Exact name of registrant as specified in its charter) | Delaware | 32-0514958 | | --- | --- ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38555 THE LOVESAC COMPANY (Exact name of registrant as specified in its charter) | Delaware | 32-0514958 | | --- | --- | ...

Financial Data and Key Metrics Changes - Total sales increased by $11.8 million or 9.1% to $141.2 million in Q1 2024 compared to the prior year, driven by growth across all channels [101] - Adjusted EBITDA was a loss of $2.4 million for the quarter, reflecting ongoing investments in the business [76] - Gross margin decreased by 100 basis points to 50.1% of net sales, primarily due to higher promotional discounting [105] - Net loss for the quarter was $4.2 million or $0.28 per diluted share, compared to net income of $1.9 million or $0.12 per diluted share in the prior year [140] Business Line Data and Key Metrics Changes - Sactionals net sales increased by 11.2%, while Sacs net sales decreased by 10% [136] - Internet net sales increased by $8.9 million or 28.7% to $40.2 million, significantly outperforming the category [102] - Showroom net sales increased by $2.3 million or 2.9% to $83.6 million, driven by higher point-of-sale transactions [133] Market Data and Key Metrics Changes - The overall home category was reported to be down 20% in Q1, contrasting with the company's sales growth [75] - The company continues to capture market share in a fragmented upholstery category, with only low single-digit penetration despite significant growth [57] Company Strategy and Development Direction - The company aims to innovate continuously, with the recent launch of the Angled Side expected to drive significant upside among new and existing customers [77][125] - The focus remains on building a brand that resonates with consumers, leveraging a unique product platform that combines home and technology [58][118] - Investments in technology and research and development are prioritized to fuel growth and enhance customer experience [130] Management's Comments on Operating Environment and Future Outlook - Management remains cautiously optimistic about the future, despite a challenging macro environment impacting consumer spending [80][124] - The company expects to continue outperforming the category, with a strong focus on growth and ROI-driven investment discipline [112] - The competitive landscape is highly promotional, but the company has maintained promotional intensity below pre-pandemic levels, indicating strong demand for its products [82] Other Important Information - The company celebrated its 25th anniversary with a significant media campaign, generating over 3 billion impressions [34][97] - The company has a strong balance sheet with $45.1 million in cash and cash equivalents, positioning it well for future growth [141] Q&A Session Summary Question: Insights on consumer trends and discretionary spending - Management noted no significant trade-down trends, with a flat or slightly elevated mix of premium upgrades in purchases [24][25] Question: Update on tech and R&D investments - Investments in technology include optimizing inventory levels and enhancing customer service through AI platforms [27][29] Question: Brand awareness and social media engagement - Unaided brand awareness remains low, indicating a significant opportunity for growth, while aided awareness has increased substantially [16] Question: Gross margin and freight costs - Management expects a 200 basis points increase in gross margin due to lower freight costs, with benefits expected to fully materialize in Q4 [39][40] Question: Sales pull forward from Q2 to Q1 - A shift in demand was noted, with strong performance in Q1 leading to a pull forward of some projected demand from Q2 [45][46]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended January 29, 2023 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission File Number: 001-38555 THE LOVESAC COMPANY (Exact Name of Registrant as Specified in Its Charter) | Delaware | 32-05149 ...