The Lovesac Company Reports Third Quarter Fiscal 2026 Financial Results

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].