Financial Data and Key Metrics Changes - Third-quarter net sales were $150.2 million, slightly below guidance by about $1 million, but showed a year-over-year growth despite a declining market [4][5] - Adjusted EBITDA loss for the quarter was $6.0 million compared to an adjusted EBITDA of $2.7 million in the prior year [38] - Net loss for the quarter was $10.6 million, or -$0.72 per share, compared to a net loss of $4.9 million, or -$0.32 per share in the prior year [38][39] - Gross margin decreased by 240 basis points to 56.1% due to increased tariffs and transportation costs [5][36] Business Line Data and Key Metrics Changes - Showroom net sales increased by $11.7 million, or 12.8%, to $102.7 million, driven by the addition of 17 new showrooms [34] - Internet net sales decreased by $7.6 million, or 16.9%, to $37.3 million [34] - Sactionals net sales decreased by 1.0%, while Sacs' net sales decreased by 9.0%, but other net sales, including the new Snug platform, increased by 126.3% [35] Market Data and Key Metrics Changes - Total omnichannel comparable net sales decreased by 1.2% for the quarter, offset by contributions from new and non-comparable touchpoints [6] - The overall market category is estimated to have declined approximately 2% for the comparable quarter and 4% year to date [5] Company Strategy and Development Direction - The company is focusing on brand evolution and optimizing its marketing strategy to better position itself in the market [9][10] - Plans to slow the expansion of physical stores in the coming year to refine the omnichannel strategy [15] - The company aims to launch a new high-end sectional sofa platform in mid-2026, targeting higher-end consumers [12][13] Management's Comments on Operating Environment and Future Outlook - Management noted that macro conditions are challenging, with consumer uncertainty affecting lower dollar volume transactions [4][16] - Despite a strong performance during Black Friday and Cyber Monday, management remains cautious due to tough comparisons in the upcoming months [16][60] - The company expects fiscal 2026 to be a year of modest market share gains despite a down category [16][41] Other Important Information - The company welcomed a new Chief Technology Officer to support digital transformation initiatives [17][18] - The "Loved by Lovesac" re-commerce program is being rolled out, offering discounts of 20%-25% compared to new products [46][47] Q&A Session Summary Question: Can you talk about the discount to the consumer for the Loved by Lovesac re-commerce efforts? - The discount level is around 20%-25% compared to buying at full price, with two grades for the products [46] Question: Can you provide insights on the P&L impacts for fiscal 2027? - The company is focusing on harvesting the brand and making more money off existing infrastructure while preparing for a significant launch in early 2027 [51][54] Question: Where is the revenue weakness coming from? - Revenue weakness is primarily from smaller setups of Sactionals, with a noted improvement in lower-end transaction sizes [64][65] Question: How long do you expect the marketing overhaul to take to see impacts? - Immediate impacts are being seen in Q4, with ongoing improvements expected in Q1 and Q2 next year [69][71]

Core Viewpoint - Lovesac Company reported a wider quarterly loss and softer sales than expected, leading to a decline in stock price and a tightened full-year outlook due to higher costs and weaker comparable sales [1] Financial Performance - The company reported quarterly sales of $150.166 million, a slight increase of 0.2% year over year, but below the expected $154.146 million [2] - Gross profit fell by 3.9% year over year to $84.2 million, with gross margin decreasing by 240 basis points to 56.1% [3] - The operating loss for the third quarter was $15.8 million, compared to $7.7 million in the prior year [3] Cash Position - As of November 2, 2025, the cash and cash equivalents balance was $23.7 million, down from $61.7 million a year ago, with total merchandise inventory at $129.7 million [4] Outlook - The fiscal 2026 GAAP earnings outlook was cut to a range of 15 cents to 49 cents per share, down from 52 cents to $1.05, and below the analyst estimate of 85 cents [5] - The revenue forecast for fiscal 2026 was trimmed to $685 million to $705 million, compared to the earlier projection of $710 million to $740 million and the consensus estimate of $713.56 million [5] - For the fourth quarter, the company expects GAAP earnings of $1.88 to $2.22 per share, below the analyst estimate of $2.33, and projects revenue of $236 million to $256 million, compared to the consensus forecast of $260.47 million [6] Strategic Goals - The CEO stated the goal of reaching three million Lovesac households by 2030, indicating long-term growth ambitions [7]

Financial Data and Key Metrics Changes - Third-quarter net sales were $150.2 million, slightly below guidance by about $1 million, but still reflecting a year-over-year growth despite a challenging macro environment [4][5] - Adjusted EBITDA loss for the quarter was $6.0 million compared to an adjusted EBITDA of $2.7 million in the prior year period [37] - Net loss for the quarter was $10.6 million, or -$0.72 per share, compared to a net loss of $4.9 million, or -$0.32 per share in the prior year [37][38] - Gross margin decreased by 240 basis points to 56.1% due to increased transportation and tariff costs [34] Business Line Data and Key Metrics Changes - Showroom net sales increased by $11.7 million, or 12.8%, to $102.7 million, driven by the addition of 17 new showrooms [32] - Internet net sales decreased by $7.6 million, or 16.9%, to $37.3 million [32] - Sactionals net sales decreased by 1.0%, while Sacs' net sales decreased by 9.0%, but other net sales, including the new Snug platform, increased by 126.3% [33] Market Data and Key Metrics Changes - The overall category is estimated to have declined approximately 2% for the comparable quarter and 4% year to date, while the company achieved modest market share gains [5][16] - The company noted a slight improvement in category trends, with low to mid-single-digit declines recently compared to previous months [15] Company Strategy and Development Direction - The company is focusing on optimizing its brand positioning and marketing strategies to enhance customer acquisition and retention [8][20] - Plans to slow the expansion of physical stores in the coming year to refine its omnichannel strategy [15] - The company aims to launch a new high-end sectional sofa platform in mid-2026, targeting higher-end consumers [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding consumer spending and macroeconomic conditions, particularly in lower dollar volume transactions [4][15] - Despite challenges, management is optimistic about the upcoming holiday season and has seen strong growth during Black Friday and Cyber Monday [16][40] - The company anticipates fiscal 2026 to be a year of modest market share gains, with net sales estimated between $685 million and $705 million [40][41] Other Important Information - The company welcomed a new Chief Technology Officer to support digital transformation initiatives [17][18] - The "Loved by Lovesac" re-commerce program is being rolled out, offering discounts of 20%-25% compared to new products [44][45] Q&A Session Summary Question: Can you talk about the discount to the consumer for the Loved by Lovesac re-commerce efforts? - The discount is around 20%-25% compared to buying new products, with two grades for the condition of items [44][45] Question: Can you provide insights on the revenue weakness in the quarter? - Revenue weakness primarily came from smaller setups of Sactionals, with a noted improvement in lower-end transaction sizes [56] Question: What are the expected impacts on P&L for fiscal 2027? - The company is focusing on leveraging existing infrastructure and products to enhance profitability while preparing for a significant new product launch [48][49]

分组1 - Lovesac reported a quarterly loss of $0.72 per share, slightly worse than the Zacks Consensus Estimate of a loss of $0.70, and a significant increase from a loss of $0.32 per share a year ago, indicating an earnings surprise of -2.86% [1] - The company posted revenues of $150.17 million for the quarter ended October 2025, missing the Zacks Consensus Estimate by 2.37%, and showing a slight increase from year-ago revenues of $149.9 million [2] - Lovesac shares have declined approximately 41.9% since the beginning of the year, contrasting with the S&P 500's gain of 17.1% [3] 分组2 - The earnings outlook for Lovesac is uncertain, with current consensus EPS estimates at $2.22 on revenues of $258.13 million for the coming quarter, and $0.57 on revenues of $710.84 million for the current fiscal year [7] - The Retail - Home Furnishings industry, to which Lovesac belongs, is currently ranked in the bottom 39% of over 250 Zacks industries, suggesting potential underperformance compared to higher-ranked industries [8] - The estimate revisions trend for Lovesac was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expectations of underperformance in the near future [6]

Financial Performance - Net sales for the thirteen weeks ended November 2, 2025, were $150,166, a slight increase from $149,905 for the same period in 2024, representing a growth of 0.2%[20] - Gross profit for the thirty-nine weeks ended November 2, 2025, was $249,215, compared to $252,053 for the same period in 2024, indicating a decrease of 1.1%[20] - The net loss for the thirteen weeks ended November 2, 2025, was $10,551, compared to a net loss of $4,930 for the same period in 2024, reflecting an increase in losses of 114%[20] - Operating loss for the thirty-nine weeks ended November 2, 2025, was $39,581, compared to $33,950 for the same period in 2024, an increase of 16.5%[20] - For the thirteen weeks ended November 2, 2025, total net sales were $150.2 million, a slight increase from $149.9 million for the same period in 2024[40] - The company reported a net cash used in operating activities of $34,093 for the thirty-nine weeks ended November 2, 2025, compared to $5,046 for the same period in 2024, indicating a significant increase in cash outflow[24] - For the thirty-nine weeks ended November 2, 2025, total net sales were $449.069 million, compared to $439.138 million for the same period in 2024, representing a 2.1% increase[75] - The basic and diluted net loss per share for the thirteen weeks ended November 2, 2025, was $0.72, compared to $0.32 for the same period in 2024, indicating a significant decline in earnings per share[48] Assets and Liabilities - Total current assets decreased from $246,597 as of February 2, 2025, to $185,986 as of November 2, 2025, a decline of 24.5%[18] - Total liabilities decreased from $315,895 as of February 2, 2025, to $306,207 as of November 2, 2025, a reduction of 3.4%[18] - Cash and cash equivalents dropped significantly from $83,734 as of February 2, 2025, to $23,722 as of November 2, 2025, a decrease of 71.6%[18] - As of November 2, 2025, customer deposit liabilities amounted to $8.7 million, down from $11.3 million as of February 2, 2025[38] - As of November 2, 2025, the company's borrowing availability under the line of credit was $36,000,000, up from $32,600,000 as of February 2, 2025, indicating improved liquidity[58] Sales Channels - Showroom sales accounted for $102.7 million, representing a 12.1% increase from $91.0 million in the prior year[40] - Internet sales decreased to $37.3 million from $44.9 million, a decline of 16.9% year-over-year[40] - Net sales from showrooms constituted 68.4% and 60.7% of total net sales for the thirteen weeks ended November 2, 2025, and November 3, 2024, respectively[88] - Ecommerce sales represented 24.8% and 29.9% of total net sales for the thirteen weeks ended November 2, 2025, and November 3, 2024, respectively[88] - Other net sales, including pop-up-shop sales, accounted for 6.8% and 9.4% of total net sales for the thirteen weeks ended November 2, 2025, and November 3, 2024, respectively[90] Expenses - Research and development expenses were $2.3 million for both the thirteen weeks ended November 2, 2025, and November 3, 2024[34] - Shipping and handling costs increased to $31.3 million for the thirteen weeks ended November 2, 2025, compared to $26.1 million in the prior year, reflecting a 19.7% increase[36] - Total lease expense for the thirty-nine weeks ended November 2, 2025, was $31,490,000, an increase from $30,086,000 for the same period in 2024, reflecting a year-over-year increase of approximately 4.7%[49] - Selling, general and administrative (SG&A) expenses rose by $3.2 million, or 4.5%, with SG&A as a percentage of net sales increasing to 49.9% from 47.9%[110] - Advertising and marketing expenses are projected to rise as the company drives net sales growth[101] Equity and Stock - The company incurred $8,201 in equity-based compensation for the thirty-nine weeks ended November 2, 2025, compared to $6,687 for the same period in 2024, an increase of 22.6%[24] - The company recognized equity-based compensation expense of $2.4 million for the thirteen weeks ended November 2, 2025, compared to $2.8 million for the same period in 2024[66] - The total unrecognized equity-based compensation cost related to unvested RSU and PSU awards was approximately $20.3 million as of November 2, 2025[67] - The company repurchased and retired 306,325 shares of common stock for $6.0 million during the thirty-nine weeks ended November 2, 2025[70] - As of November 2, 2025, approximately $14.1 million remained available for future purchases under the share repurchase program[71] Legal and Compliance - The company has been involved in multiple legal proceedings, including a derivative action that was settled on October 2, 2025, concluding the litigation[54] - There were no material changes in internal control over financial reporting during the quarter ended November 2, 2025[147] Future Outlook - The company expects gross profit to increase as net sales grow and scale economics are realized with manufacturing partners[97] - Selling, general and administrative expenses are expected to increase as the company continues to grow its business[100] - The company continues to monitor inflationary pressures and their impact on costs, implementing pricing strategies and productivity improvements[144] - Macroeconomic factors such as inflation and elevated interest rates have negatively impacted demand, contributing to a slowdown in business[85]

Financial Performance - Q3 FY26 net sales increased by 0.2% to $150.2 million compared to Q3 FY25, driven by showroom growth despite declines in internet and other sales channels[1][3][7] - Showroom sales rose by 12.8% to $102.7 million, while internet sales decreased by 16.9% to $37.3 million in Q3 FY26[3][7] - Gross profit decreased by $3.4 million, or 3.9%, with gross margin declining 240 basis points to 56.1% due to increased transportation and tariff costs[3][7] - SG&A expenses increased by 4.5% to $75.0 million, primarily due to payroll and overhead costs[3][7] - The operating loss for Q3 FY26 was $15.8 million, compared to a loss of $7.7 million in the prior year, resulting in an operating margin of (10.5)%[3][7] - Net loss for Q3 FY26 was $10.6 million, or $(0.72) per share, compared to a net loss of $4.9 million, or $(0.32) per share, in Q3 FY25[3][7] - The operating loss for the thirteen weeks ended November 2, 2025, was $15.804 million, compared to a loss of $7.723 million in the prior year, indicating a significant increase in losses[22] - The net loss for the thirty-nine weeks ended November 2, 2025, was $28.041 million, compared to a net loss of $23.751 million for the same period in 2024, representing an increase of approximately 18%[22] - For the thirteen weeks ended November 2, 2025, the net loss was $10,551,000 compared to a net loss of $4,930,000 for the same period in 2024, representing a year-over-year increase in losses of approximately 114%[26] - The total net loss for the thirty-nine weeks ended November 2, 2025 was $28,041,000, compared to a net loss of $23,751,000 for the same period in 2024, indicating an increase in losses of about 18%[26] Cash and Assets - Cash and cash equivalents decreased to $23.7 million as of November 2, 2025, down from $61.7 million a year earlier[9] - Cash and cash equivalents decreased to $23.722 million as of November 2, 2025, down from $83.734 million at the beginning of the period[24] - Total current assets decreased to $185.986 million as of November 2, 2025, compared to $246.597 million as of February 2, 2025[20] - Total merchandise inventory increased to $129.7 million as of November 2, 2025, primarily due to increased freight capitalization and planned stock inventory[9] - Total liabilities as of November 2, 2025, were $306.207 million, a decrease from $315.895 million as of February 2, 2025[20] Future Outlook - The company aims to reach three million Lovesac households by 2030, focusing on product innovation and marketing evolution[2] - For the full year of fiscal 2026, the company expects net sales in the range of $685 million to $705 million and adjusted EBITDA between $37 million and $43 million[14] Expenses and Other Financial Metrics - The company reported a net cash used in operating activities of $34.093 million for the thirty-nine weeks ended November 2, 2025, compared to $5.046 million for the same period in 2024[24] - The company incurred $18.211 million in capital expenditures for property and equipment during the thirty-nine weeks ended November 2, 2025[24] - Interest income, net for the thirty-nine weeks ended November 2, 2025 was $(632,000), down from $(2,139,000) in the same period of 2024, indicating a decrease of approximately 70%[26] - Depreciation and amortization expenses for the thirty-nine weeks ended November 2, 2025 totaled $11,451,000, up from $10,924,000 in the same period of 2024, marking an increase of about 4.8%[26] - Equity-based compensation expenses for the thirty-nine weeks ended November 2, 2025 were $8,337,000, an increase from $6,748,000 in the same period of 2024, representing a growth of approximately 23.5%[26] Non-Recurring Expenses - The company reported a total of $3,397,000 in other non-recurring expenses for the thirteen weeks ended November 2, 2025, which included severance and professional fees related to financial statement restatements[27] - Other non-recurring expenses for the thirty-nine weeks ended November 2, 2025 included impairment charges related to the Best Buy partnership discontinuation[27] - The company incurred a loss on disposal of assets amounting to $2,000 for the thirteen weeks ended November 2, 2025, compared to $12,000 for the same period in 2024[27] Tax and Income - The income tax benefit for the thirteen weeks ended November 2, 2025 was $(5,047,000), compared to $(2,092,000) for the same period in 2024, reflecting an increase in tax benefits of approximately 141%[26]

Core Insights - The Lovesac Company reported a slight increase in net sales of 0.2% to $150.2 million for Q3 FY26 compared to Q3 FY25, driven primarily by showroom growth despite a decline in omni-channel comparable net sales [1][8]. Financial Performance - Net sales for the thirteen weeks ended November 2, 2025, were $150.2 million, a 0.2% increase from $149.9 million in the prior year [3]. - Showroom sales increased by 12.8% to $102.7 million, while internet sales decreased by 16.9% to $37.3 million [3]. - Gross profit decreased by 3.9% to $84.2 million, with a gross margin of 56.1%, down from 58.5% in the prior year [3][8]. - Total operating expenses rose by 4.9% to $100.0 million, with SG&A expenses increasing by 4.5% to $75.0 million [3][8]. - The company reported a net loss of $10.6 million, or $(0.72) per share, compared to a net loss of $4.9 million, or $(0.32) per share, in the prior year [3][8]. Year-to-Date Performance - For the thirty-nine weeks ended November 2, 2025, net sales increased by 2.3% to $449.1 million, driven by a 0.4% increase in omni-channel comparable net sales and the addition of 17 new showrooms [8]. - Gross profit for the year-to-date period decreased by 1.1% to $249.2 million, with a gross margin of 55.5% [8]. - The year-to-date net loss was $28.0 million, or $(1.91) per diluted share, compared to a net loss of $23.8 million, or $(1.53) per diluted share, in the prior year [8][13]. Strategic Initiatives - The CEO emphasized a focus on growth initiatives, including new product launches and marketing evolution, aiming for three million Lovesac households by 2030 [2]. - The company opened five new showrooms during Q3 FY26, maintaining a total of 275 showrooms [5][8]. Cash Flow and Inventory - As of November 2, 2025, cash and cash equivalents were $23.7 million, down from $61.7 million a year earlier [13]. - Total merchandise inventory increased to $129.7 million, primarily due to increased freight capitalization and planned stock inventory increases [13].

Core Viewpoint - The Lovesac Company is expected to report a significant quarterly loss and a slight increase in revenue compared to the previous year [1] Financial Performance - The company will release its third-quarter earnings results on December 11, with analysts predicting a loss of 46 cents per share, compared to a loss of 1 cent per share in the same quarter last year [1] - The consensus estimate for quarterly revenue is $154.17 million, which represents an increase from last year's revenue of $149.91 million [1] Stock Performance - Shares of Lovesac fell by 1.5%, closing at $13.74 [2] Analyst Ratings - Maxim Group analyst Tim Forte maintains a Buy rating with a reduced price target of $33, down from $38 [3] - DA Davidson analyst Michael Baker also maintains a Buy rating with a price target of $24 [3] - Canaccord Genuity analyst Maria Ripps keeps a Buy rating with a price target of $30 [3] - Oppenheimer analyst Brian Nagel has an Outperform rating with a price target of $35 [3] - Roth MKM analyst Matt Koranda maintains a Buy rating and raised the price target from $22 to $28 [3]

Core Insights - The Lovesac Company is set to release its third-quarter earnings results on December 11, with analysts predicting a loss of 46 cents per share compared to a loss of 1 cent per share in the same quarter last year [1] - The expected quarterly revenue for Lovesac is $154.17 million, which shows a slight increase from last year's revenue of $149.91 million [1] Analyst Ratings - Maxim Group analyst Tim Forte maintains a Buy rating with a revised price target of $33, down from $38 [3] - DA Davidson analyst Michael Baker also holds a Buy rating with a price target of $24 [3] - Canaccord Genuity analyst Maria Ripps maintains a Buy rating with a price target of $30 [3] - Oppenheimer analyst Brian Nagel has an Outperform rating with a price target of $35 [3] - Roth MKM analyst Matt Koranda maintains a Buy rating and has raised the price target from $22 to $28 [3] Stock Performance - Shares of Lovesac fell by 1.5%, closing at $13.74 [2]

Core Insights - Analysts project that Lovesac (LOVE) will report a quarterly loss of -$0.70 per share, reflecting a decline of 118.8% year over year, with revenues expected to reach $153.81 million, an increase of 2.6% from the same quarter last year [1] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating a reassessment of initial estimates by covering analysts [1][2] Revenue Estimates - 'Net Sales- Other' is projected to be $9.31 million, indicating a year-over-year decline of 33.5% [4] - 'Net Sales- Internet' is estimated at $43.54 million, reflecting a year-over-year decrease of 3% [4] - 'Net Sales- Showrooms' is expected to reach $101.01 million, showing an increase of 11% from the prior-year quarter [4] Showroom Metrics - The average prediction for 'Ending Showroom Count' is 278, up from 258 in the same quarter of the previous year [5] - Shares of Lovesac have increased by 4.3% over the past month, outperforming the Zacks S&P 500 composite, which moved up by 1.2% [5] - Lovesac holds a Zacks Rank 3 (Hold), suggesting it is expected to mirror overall market performance in the near future [5]