Lovesac Reports $4.9 Million Net Loss and 2.7% Revenue Decline in Latest Quarter

The Lovesac Company reported a net loss of $4.9 million for the thirteen weeks ended November 3, 2024, compared to a loss of $2.3 million in the same period last year. Revenue for the quarter decreased by 2.7% to $149.9 million, down from $154.0 million in the prior year. The decline in sales was attributed to an 8.3% drop in omni-channel comparable net sales, although this was partially offset by new showroom openings. The company's gross profit for the quarter was $87.6 million, resulting in a gross margin of 58.5%, an increase from 57.4% in the previous year, primarily due to reduced inbound transportation costs.

For the thirty-nine weeks ended November 3, 2024, Lovesac's net sales totaled $439.1 million, a decrease of 2.4% from $449.8 million in the same period last year. The company experienced a significant increase in selling, general, and administrative (SG&A) expenses, which rose by 13.7% to $213.8 million, driven by higher payroll and professional fees. The operating loss for the thirty-nine weeks was $34.0 million, compared to a loss of $10.3 million in the prior year. The net loss for this period was $23.8 million, compared to $7.1 million in the previous year.

Lovesac has continued to expand its showroom presence, operating 258 showrooms as of November 3, 2024, an increase from 230 a year earlier. The company opened five new showrooms during the quarter, contributing to a 6.9% increase in new customer counts. However, showroom net sales decreased by 7.8% in the latest quarter, while internet sales increased by 12.1%, indicating a shift in consumer purchasing behavior towards online channels.

Strategically, Lovesac launched the AnyTable™ in September 2024, enhancing its product offerings alongside existing lines such as Sactionals and Sacs. The company also reported a significant increase in equity-based compensation expenses, reflecting its ongoing investment in talent and infrastructure. Despite the challenges posed by macroeconomic factors such as inflation and a weak housing market, Lovesac remains focused on its growth strategy, including the potential for further showroom openings and product innovations.

Looking ahead, Lovesac anticipates continued pressure on consumer spending due to economic uncertainties. The company has emphasized its commitment to managing costs and optimizing its operations to navigate these challenges. With $61.7 million in cash and cash equivalents as of the latest reporting date, Lovesac believes it has sufficient liquidity to meet its operational needs and support its growth initiatives over the next twelve months.