Lovesac Reports 4.3% Net Sales Increase, Net Loss Improves in Latest Quarter

The Lovesac Company reported a net sales increase of 4.3% for the thirteen weeks ended May 4, 2025, reaching $138.4 million compared to $132.6 million in the same period last year. The growth was primarily driven by an 18.2% rise in showroom sales, which accounted for $96.5 million, while internet sales decreased by 8.9% to $33.3 million. The company also experienced a significant decline in other sales, which fell by 40.5% to $8.6 million, largely due to a strategic decision to halt barter transactions during the current period. Despite the increase in sales, the company reported a net loss of $10.8 million, an improvement from the $12.9 million loss in the prior year.

In terms of operational metrics, Lovesac's customer base saw a 1.2% increase in new customers, contrasting with a 5.7% decline in the previous year. The company operated 267 showrooms as of May 4, 2025, an increase from 246 showrooms a year earlier, reflecting its ongoing expansion strategy. The company’s gross profit rose by 3.2% to $74.4 million, although the gross margin decreased slightly to 53.7% from 54.3% due to higher promotional discounting and increased costs in transportation.

The company has made strategic decisions to enhance its product offerings, including the launch of the Sactionals Reclining Seat and the AnyTable, which are designed to complement its existing modular couch line. Additionally, Lovesac has discontinued its partnership with Best Buy, which is expected to result in an 8% reduction in workforce as the company focuses on strengthening its physical and e-commerce presence. This decision is part of a broader initiative to streamline operations and reduce costs, with anticipated expenses related to the exit estimated between $1.7 million and $2.1 million.

Financially, Lovesac's cash and cash equivalents decreased significantly to $26.9 million from $83.7 million at the end of the previous quarter, primarily due to increased cash used in operating activities, which totaled $41.4 million. The company’s total liabilities also decreased to $282.5 million from $315.9 million, reflecting a reduction in current liabilities. Looking ahead, Lovesac remains cautious about macroeconomic factors such as inflation and consumer spending, which could impact future performance. The company believes that its current cash position and available credit will be sufficient to meet its operational needs over the next year.