The Lovesac pany(LOVE) - 2025 Q4 - Annual Results

Financial Performance - Fourth quarter net sales were $241.5 million, a decrease of 3.6% compared to the prior year period[5] - Fiscal year net sales totaled $680.6 million, down 2.8% from fiscal 2024, primarily due to a 9.3% decrease in omni-channel comparable net sales[6] - Net income for the fourth quarter increased to $35.3 million, or $2.13 per diluted share, representing a 14.1% increase compared to the prior year[9] - Net income for the thirteen weeks ended February 2, 2025, was $35.31 million, up from $30.95 million in the prior year, marking an increase of 14.5%[27] - Net income for the fifty-two weeks ended February 2, 2025, was $11,556,000, a decrease of 51.6% compared to $23,861,000 for the fifty-three weeks ended February 4, 2024[29] Profitability Metrics - Gross profit for the fourth quarter was $145.8 million, with a gross margin of 60.4%, an increase of 70 basis points year-over-year[5] - Gross profit for the same period was $145.78 million, representing a gross margin of 60.5%, compared to a gross profit of $149.64 million and a gross margin of 59.8% in the prior year[27] - Operating income increased to $47.60 million for the thirteen weeks ended February 2, 2025, compared to $40.38 million in the prior year, reflecting a growth of 17.5%[27] - EBITDA for the fifty-two weeks ended February 2, 2025, was $28,359,000, down 33.3% from $42,679,000 for the fifty-three weeks ended February 4, 2024[31] - Adjusted EBITDA for the fifty-two weeks ended February 2, 2025, was $47,787,000, a decrease of 11.6% compared to $54,020,000 for the fifty-three weeks ended February 4, 2024[31] Expenses and Costs - Total operating expenses decreased by 10.1% in the fourth quarter, leading to an operating income of $47.6 million, with an operating margin of 19.7%[9] - Selling, general and administrative expenses decreased to $67.62 million for the thirteen weeks ended February 2, 2025, compared to $76.30 million in the prior year, a reduction of 11.4%[27] - Cash paid for taxes increased to $8,447,000 for the fifty-two weeks ended February 2, 2025, from $1,810,000 for the fifty-three weeks ended February 4, 2024[29] - Equity-based compensation for the fifty-two weeks ended February 2, 2025, was $8,009,000, compared to $4,461,000 for the fifty-three weeks ended February 4, 2024[31] Assets and Liabilities - Cash and cash equivalents as of February 2, 2025, were $83.7 million, a decrease from $87.0 million as of February 4, 2024[13] - Total current assets increased to $246.60 million as of February 2, 2025, compared to $214.45 million as of February 4, 2024, reflecting a growth of 15%[25] - Total liabilities rose to $315.90 million as of February 2, 2025, compared to $264.68 million as of February 4, 2024, indicating an increase of 19.4%[25] - The company reported a decrease in accumulated earnings to $25.85 million as of February 2, 2025, down from $34.40 million in the prior year[25] Future Outlook - The company expects fiscal 2026 net sales to be in the range of $700 million to $750 million[14] - Adjusted EBITDA for fiscal 2026 is projected to be between $48 million and $60 million[14] - Adjusted EBITDA guidance for fiscal 2026 is not provided due to the uncertainty of future charges and costs, which include equity-based compensation expenses[18] Strategic Initiatives - The company added 27 new showrooms during fiscal 2025, bringing the total showroom count to 257[6] - The company continues to focus on enhancing long-term shareholder value through strategic investments and operational improvements[21] Cash Flow and Investments - Net cash provided by operating activities for the fifty-two weeks ended February 2, 2025, was $38,977,000, down 48.9% from $76,441,000 for the fifty-three weeks ended February 4, 2024[29] - The net cash used in investing activities for the fifty-two weeks ended February 2, 2025, was $21,517,000, a decrease from $29,211,000 for the fifty-three weeks ended February 4, 2024[29] - The company repurchased common stock amounting to $19,929,000 during the fifty-two weeks ended February 2, 2025[29]