Lovesac Co
NASDAQ:LOVE
Lovesac Co
The Lovesac Co. is a technology driven, omni-channel company. The company is headquartered in Stamford, Connecticut and currently employs 607 full-time employees. The company went IPO on 2018-06-27. The firm's product offering consists of modular couches called Sactionals, foam beanbag chairs called Sacs, and their associated home decor accessories. The Sactionals are a couch system that consists of two components, seats and sides. The Sac product line offers approximately six different sizes ranging from 25 pounds to 95 pounds, with capacity to seat three-plus people on the larger model Sacs. The company also offers accessories that include Sactional-specific drink holders, Footsac blankets, decorative pillows, fitted seat tables and ottomans in varying styles and finishes, and Sactionals Power Hub. The firm markets and sells its products through 146 showrooms at various malls, lifestyle centers, kiosks, mobile concierges, and street locations in 39 states in the United States. The company also offers its products directly through its Website, www.lovesac.com.
The Lovesac Co. is a technology driven, omni-channel company. The company is headquartered in Stamford, Connecticut and currently employs 607 full-time employees. The company went IPO on 2018-06-27. The firm's product offering consists of modular couches called Sactionals, foam beanbag chairs called Sacs, and their associated home decor accessories. The Sactionals are a couch system that consists of two components, seats and sides. The Sac product line offers approximately six different sizes ranging from 25 pounds to 95 pounds, with capacity to seat three-plus people on the larger model Sacs. The company also offers accessories that include Sactional-specific drink holders, Footsac blankets, decorative pillows, fitted seat tables and ottomans in varying styles and finishes, and Sactionals Power Hub. The firm markets and sells its products through 146 showrooms at various malls, lifestyle centers, kiosks, mobile concierges, and street locations in 39 states in the United States. The company also offers its products directly through its Website, www.lovesac.com.
Revenue Miss: Q3 net sales were $150.2 million, about $1 million below the company’s guidance due to choppy consumer demand, especially in lower dollar transactions.
Gross Margin Pressure: Gross margin fell 240 basis points to 56.1%, impacted by higher tariffs, transportation costs, and increased promotions.
Continued Market Share Gains: Despite a challenging category, Lovesac achieved slight year-over-year sales growth and believes it gained market share in a segment that declined 2% in the quarter.
Strong Holiday Start: Black Friday and Cyber Monday sales were strong, including a record Cyber Monday, supporting positive comps quarter-to-date.
Strategic Shift: Lovesac is slowing physical store expansion, prioritizing product innovation (notably Snugg and an upcoming high-end platform), and accelerating domestic production.
Supply Chain Transformation: Domestic manufacturing of core Sactional inserts is set to begin this summer, aiming to achieve or improve on current gross margins.
Guidance Maintained: Full-year revenue expected between $685-$705 million, gross margin 56%-57%, and net income of $2-$8 million, reflecting caution due to macro uncertainty and promotional intensity.
Customer Programs Expanded: The recommerce (Loved by Lovesac) program is now in 27 states, with further enhancements and a trade-in program planned for next year.
