The Lovesac pany(US:LOVE)2020-09-09 19:38Financial Data and Key Metrics Changes - The company reported a 28.7% increase in net sales to $61.9 million, driven by a 387% growth in e-commerce sales [9][35] - Adjusted EBITDA was positive at $2.2 million, compared to an adjusted EBITDA loss of $3.3 million in the same quarter last year [10][43] - The net loss was $1.1 million or a loss of $0.08 per share, an improvement from a net loss of $4.8 million or a loss of $0.33 per share in the prior year [43] Business Line Data and Key Metrics Changes - Sactionals sales increased by 39.7%, while Sacs sales decreased by 18.3% due to reduced Costco pop-up shops [38] - Other category sales, including decorative pillows and blankets, saw a significant increase of 188.5% [38] Market Data and Key Metrics Changes - The company experienced a 58.9% decrease in showroom sales due to COVID-19 related closures [36] - Comparable sales increased by 72.4% in the quarter, reflecting the impact of the pandemic on other sales channels [37] Company Strategy and Development Direction - The company is focusing on strategic investments in infrastructure to support growth and enhance customer experience [12][23] - Plans to open 7 to 10 new showrooms in the second half of the year, with a total of 15 to 18 new showrooms expected by year-end [15][28] - The company is leveraging its e-commerce platform and enhancing its omni-channel experience to capture market share [11][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to drive strong year-on-year growth despite ongoing uncertainties related to COVID-19 [15][45] - The company anticipates a challenging third quarter with adjusted EBITDA losses between $10 million and $11 million, but expects a return to profitability in the fourth quarter [46][47] Other Important Information - The company ended the quarter with a strong cash position of nearly $55 million [10][44] - The launch of a new e-commerce platform is expected to improve customer engagement and streamline operations [30] Q&A Session Summary Question: Inventory position and supply chain pressures - Management stated there are no inventory concerns and that they have managed through the COVID crisis effectively [50][51] Question: Online sales growth trajectory - E-commerce sales saw significant increases, especially in areas where showrooms were closed, and management noted a shift in customer shopping behavior [53] Question: Deferred expenses and their impact - The majority of the $5 million in deferred expenses will be accounted for in the third quarter, with some shifting to the fourth quarter [54] Question: Real estate strategy and showroom openings - The company is adopting a "touch point strategy" to optimize showroom openings and reduce capital expenditures [61] Question: Marketing strategy for Labor Day - Management reported high ROI from marketing efforts leading into Labor Day and expects to maintain consistent marketing spending [67]