Financial Performance - The Lovesac Company reported an Earnings Per Share (EPS) of -$0.45, surpassing the anticipated EPS of -$0.72, indicating better-than-expected performance despite the negative EPS [2][5] - The company unveiled a revenue of approximately $160.53 million, slightly exceeding the projected revenue of $160.42 million, demonstrating alignment with market expectations [2][5] Valuation Metrics - The Price-to-Sales ratio is about 0.44, suggesting favorable market valuation of the company's revenue [2] - The Enterprise Value to Sales ratio is around 0.68, indicating a reasonable valuation in relation to its sales [3] - The Enterprise Value to Operating Cash Flow ratio is notably high at approximately 101.13, suggesting a potentially high valuation relative to cash flow from operations [3] Financial Health - The company's Debt-to-Equity ratio is approximately 0.95, showcasing a balanced level of leverage [4] - With a Current Ratio of around 1.60, the company demonstrates a strong capability to cover its short-term liabilities with its short-term assets, indicating robust financial health [4]

Company Overview - The Lovesac Company (NASDAQ:LOVE) is known for its innovative and customizable furniture products, including sactionals and foam beanbag chairs [1] - The company operates through various channels such as its website, showrooms, and pop-up shops across the United States, allowing it to reach a diverse customer base and adapt to market changes [1] Analyst Sentiment - The consensus price target for Lovesac has decreased from $34.5 to $24 over the past year, indicating a more cautious outlook from analysts regarding the company's stock performance [2] - Analyst Maria Ripps from Canaccord Genuity has set a higher price target of $45, reflecting a more optimistic perspective on the company's future [2] Market Conditions and Strategic Initiatives - Market conditions, including changes in consumer spending, significantly affect Lovesac's sales and profitability [3] - Strategic initiatives such as new product launches and marketing strategies are crucial in shaping analysts' expectations for the company [3] - Economic factors like inflation and supply chain issues also play a role in influencing the company's performance and stock price targets [3] - Evaluating stock picks like Lovesac requires consideration of value, growth, and momentum trends [3]

Financial Data and Key Metrics Changes - Total net sales for the second quarter were $160.5 million, reflecting a year-over-year increase of 2.5% [5][33] - Gross margin decreased by 260 basis points to 56.4% of net sales compared to 59.0% in the prior year period, primarily due to increased transportation costs and higher promotional discounting [35][39] - Net loss for the quarter was $6.7 million, or negative $0.45 per common share, compared to a net loss of $5.9 million, or negative $0.38 per common share in the prior year period [39][41] Business Line Data and Key Metrics Changes - Sactionals net sales increased by 4.6%, while Sac net sales decreased by 22.5% [34] - Showroom net sales increased by $10.3 million, or 10.4%, driven by an increase in omnichannel comparable net sales [33] - Internet net sales decreased by $1.8 million, or 4.1% [33] Market Data and Key Metrics Changes - The overall furniture category is estimated to have declined approximately 4% for the comparable period, with the company gaining market share despite these headwinds [6][13] - Furniture spend was down 3.7% from May through July, with July showing the best performance of the three months [13] Company Strategy and Development Direction - The company is transitioning from a product-focused approach to a brand-focused strategy, with a brand evolution refresh underway [9][10] - The new product line, Snug by Lovesac, is positioned to capture a share of the $14 billion couch category and has been launched in over 100 showrooms [11][24] - The company aims to reach 3 million Lovesac households by 2030, focusing on long-term value creation and brand loyalty [17] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing challenges due to tariffs and competitive discounting but remains optimistic about market share gains and growth opportunities [15][16] - The company expects to mitigate tariff impacts through a four-point plan and anticipates a solid year of market share gains despite a declining category [16][33] - Future product launches and marketing strategies are expected to drive growth, with a focus on enhancing customer acquisition and brand awareness [19][20] Other Important Information - The company reported a healthy balance sheet with $34.2 million in cash and cash equivalents and no borrowings on its credit facility [39][40] - The exit from the Best Buy partnership was completed ahead of schedule and under budget, allowing for a more focused customer acquisition strategy [28] Q&A Session Summary Question: Anticipated changes to customer acquisition approach with brand evolution - Management indicated significant changes in marketing and customer acquisition strategies, with a focus on a new campaign featuring celebrity endorsements [48][49] Question: Partnerships for Snug by Lovesac - Management noted that Snug's simpler product design allows for potential distribution in non-Lovesac environments, emphasizing online sales as a primary channel [53][54] Question: Changes in EBITDA outlook - Management explained that increased tariffs and promotional activity have negatively impacted gross margins, leading to a revised EBITDA outlook [59][62] Question: Long-term growth outlook - Management confirmed that the long-term growth strategy remains intact despite current challenges, with plans to return to previous growth trajectories [70][71]

Financial Data and Key Metrics Changes - Total net sales for the second quarter were $160.5 million, reflecting a year-over-year increase of 2.5% [5][34] - Gross margin decreased by 260 basis points to 56.4% of net sales compared to 59.0% in the prior year period, primarily due to increased transportation costs and higher promotional discounting [36][39] - Net loss for the quarter was $6.7 million, or -$0.45 per common share, compared to a net loss of $5.9 million, or -$0.38 per common share in the prior year period [39][41] Business Line Data and Key Metrics Changes - Sactionals net sales increased by 4.6%, while Sac net sales decreased by 22.5% [35] - Showroom net sales increased by $10.3 million, or 10.4%, driven by an increase in omnichannel comparable net sales [34] - Internet net sales decreased by $1.8 million, or 4.1% [34] Market Data and Key Metrics Changes - The overall furniture category is estimated to have declined approximately 4% for the comparable period [6] - Furniture spend was down 3.7% from May through July, with July being the best month [13] Company Strategy and Development Direction - The company is transitioning from a product-focused approach to a brand-focused strategy, with a brand evolution refresh underway [9][10] - The new product line, Snugg by Lovesac, aims to capture the $14 billion couch category and has been launched in over 100 showrooms [11][24] - The company is focused on leveraging brand equity and expanding into new product categories while maintaining profitability [10][17] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing headwinds in the furniture category but expressed confidence in achieving growth through strategic initiatives [5][16] - The company anticipates a full-year furniture category decline of mid-single digits but expects to grow net sales within its original guidance [14][41] - Management highlighted the importance of maintaining a strong balance sheet and flexibility to invest in growth despite external pressures [7][39] Other Important Information - The company has successfully exited its partnership with Best Buy ahead of schedule and under budget [28] - A four-point mitigation plan has been implemented to address tariff pressures, including cost management and manufacturing diversification [32][34] Q&A Session Summary Question: Anticipated changes to customer acquisition approach during brand evolution - Management indicated significant changes in brand and marketing strategies, including a new campaign for Snugg featuring a popular celebrity [48][49] Question: Partnerships or distribution strategies for Snugg - Management noted that Snugg's simpler product nature allows for potential partnerships outside of Lovesac-owned environments, with a focus on online sales [53][54] Question: Changes in EBITDA outlook due to tariffs and promotional activity - Management explained that increased tariffs and the need for higher promotional discounts have negatively impacted gross margins, leading to a revised EBITDA outlook [58][61] Question: Long-term growth outlook and product launches - Management confirmed that while there are exciting products to launch in the near term, significant new room launches are expected to take longer than initially anticipated [66][67] Question: Levers for expanding gross margins - Management discussed historical improvements in gross margins and outlined measures to return to high margin levels, despite current challenges [72][73]

Financial Data and Key Metrics Changes - Total net sales for Q2 2026 were $160.5 million, reflecting a year-over-year increase of 2.5% [4][31] - Gross margin decreased by 260 basis points to 56.4% compared to 59.0% in the prior year, primarily due to increased transportation costs and higher promotional discounting [33][36] - Net loss for the quarter was $6.7 million, or negative $0.45 per share, compared to a net loss of $5.9 million, or negative $0.38 per share in the prior year [36][41] Business Line Data and Key Metrics Changes - Showroom net sales increased by $10.3 million, or 10.4%, to $109.1 million, driven by a 0.9% increase in omnichannel comparable net sales and the addition of 16 new showrooms [31] - Internet net sales decreased by $1.8 million, or 4.1%, to $42.5 million [31] - Sactionals net sales increased by 4.6%, while Sac net sales decreased by 22.5% [32] Market Data and Key Metrics Changes - The overall furniture category is estimated to have declined approximately 4% for the comparable period, with the company gaining market share despite these headwinds [5][11] - Furniture spend was down 3.7% from May through July, with July showing the best performance of the three months [11] Company Strategy and Development Direction - The company is transitioning from a product-focused approach to a brand-focused strategy, with a brand evolution refresh aimed at building a multifaceted home brand [7][8] - The new product line, Snug by Lovesac, is positioned to capture a significant share of the $14 billion couch category, with a marketing campaign featuring celebrity Britney Snow [9][21] - The company aims to reach 3 million Lovesac households by 2030, focusing on long-term value creation and brand loyalty [15] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing challenges due to tariffs and competitive discounting but remains optimistic about market share gains and growth despite a declining category [12][14] - The company expects to achieve net sales of $710 to $740 million for the full year, with adjusted EBITDA between $42 and $55 million [40][41] - Management emphasized the importance of maintaining a strong balance sheet and flexibility to invest in growth [5][37] Other Important Information - The company has successfully exited its partnership with Best Buy ahead of schedule and under budget, allowing for a more focused customer acquisition strategy [25][34] - The company is implementing a four-point mitigation plan to address tariff impacts, including cost management and manufacturing diversification [29][30] Q&A Session Summary Question: Anticipated changes to customer acquisition approach with brand evolution - Management indicated that significant changes in marketing effectiveness and customer acquisition strategies are expected, particularly with the launch of the Snug campaign and the onboarding of a new CMO [45][46] Question: Details on Snug by Lovesac partnerships and distribution - Management stated that while it is too early to discuss specific partnerships, the Snug product line's simpler nature allows for broader distribution opportunities beyond Lovesac-owned locations [49][50] Question: Changes in EBITDA outlook due to tariffs and promotional activity - Management explained that increased tariffs and the need for higher promotional discounts have negatively impacted the EBITDA outlook, with a focus on managing controllable expenses [54][57] Question: Levers to expand gross margins moving into Q4 - Management highlighted historical improvements in gross margins and outlined measures to return to high margin levels, including operational efficiencies and strategic pricing [68]

Core Viewpoint - Lovesac reported a quarterly loss of $0.45 per share, which was better than the Zacks Consensus Estimate of a loss of $0.72, indicating a positive earnings surprise of +37.50% [1] - The company has shown mixed performance in revenue, with $160.53 million reported for the quarter, slightly missing the consensus estimate by 0.2% [2] Financial Performance - The loss per share of $0.45 compares to a loss of $0.38 per share a year ago, indicating a deterioration in year-over-year performance [1] - Over the last four quarters, Lovesac has surpassed consensus EPS estimates four times and topped revenue estimates two times [2] Stock Performance - Lovesac shares have declined approximately 12.3% since the beginning of the year, contrasting with the S&P 500's gain of 11.1% [3] - The current Zacks Rank for Lovesac is 3 (Hold), suggesting that the stock is expected to perform in line with the market in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is -$0.27 on revenues of $154.51 million, while for the current fiscal year, it is $0.90 on revenues of $706.8 million [7] - The trend of earnings estimate revisions is mixed ahead of the earnings release, which could influence future stock performance [6] Industry Context - The Retail - Home Furnishings industry, to which Lovesac belongs, is currently ranked in the bottom 15% of over 250 Zacks industries, which may negatively impact stock performance [8]

Core Insights - The Lovesac Company reported a second-quarter loss of $0.45 per share, which was better than the anticipated loss of $0.71 per share, while quarterly sales increased by 2.5% year-over-year to $160.53 million, slightly exceeding the forecast of $160.23 million [1][3] Financial Performance - Gross profit for the second quarter decreased by 1.9% year-over-year to $90.6 million, with gross margin declining by 260 basis points to 56.4% [3][4] - Adjusted EBITDA fell by 44.1% to $837,000, and the company reported an operating loss of $8.8 million, slightly higher than the $8.4 million loss from the previous year [4] - The cash and equivalents balance as of August 3 was $34.2 million, down from $72.1 million in the same period last year, while total merchandise inventory at the end of the quarter was $124.0 million [4] Guidance and Outlook - Lovesac revised its fiscal 2026 GAAP EPS guidance to a range of $0.52-$1.05, down from $0.80-$1.36, and below the consensus estimate of $1.04 [5] - The company narrowed its fiscal 2026 sales forecast to $710 million-$740 million, compared to the previous range of $700 million-$750 million and an estimate of $726 million [5] Market Reaction - Following the earnings report, Lovesac shares fell by 14.89% to $17.66 in premarket trading [5]

Group 1 - U.S. stock futures are higher, with Dow futures gaining approximately 0.2% [1] - Lovesac Co reported a quarterly loss of 45 cents per share, which was better than the analyst consensus estimate of 71 cents loss per share [1] - Lovesac's quarterly sales reached $160.530 million, exceeding the analyst consensus estimate of $160.229 million [1] Group 2 - Lovesac reduced its FY2026 GAAP EPS guidance from a range of $0.80-$1.36 to $0.52-$1.05 [2] - Lovesac shares fell 13% to $18.05 in pre-market trading following the guidance cut [2] Group 3 - Avidity Biosciences, Inc. experienced a 20.1% decline to $37.08 after announcing a $500 million common stock offering [4] - Veritone, Inc. dropped 18.7% to $2.96 due to the pricing of a $25 million public offering [4] - Lesaka Technologies Inc saw a 15.8% decrease to $3.98 following its fourth-quarter results [4] - Murano Global Investments Plc fell 14.8% to $3.50 after a previous 18% drop [4] - QMMM Holdings Ltd decreased 13.2% to $95.01 after a 47% decline on Wednesday [4] - CI&T Inc. fell 9.8% to $4.53 after a 3% decline on Wednesday [4] - Enovix Corp dropped 7.1% to $8.50 after announcing a $300 million convertible notes offering [4] - KT Corp fell 4% to $18.95 in pre-market trading [4]

U.S. stock futures were higher this morning, with the Dow futures gaining around 0.2% on Thursday.Shares of Lovesac Co LOVE fell sharply in pre-market trading after the company posted results for its second quarter.Lovesac reported quarterly losses of 45 cents per share which beat the analyst consensus estimate of losses of 71 cents per share. The company reported quarterly sales of $160.530 million which beat the analyst consensus estimate of $160.229 million.Lovesac slashed its FY2026 GAAP EPS guidance fr ...

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 August 3, 2025 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 | | --- | --- | ...