Lovesac Reports Slight Decline in Net Sales and Increased Net Loss for Quarter Ended May 3, 2026

The Lovesac Company reported a slight decline in net sales for the thirteen weeks ended May 3, 2026, totaling $138.2 million, down from $138.4 million in the same period last year. The decrease was attributed to the closure of Best Buy shop-in-shop locations and a 1.0% drop in omni-channel comparable net sales, despite new showroom openings. The company experienced a 7.1% increase in internet sales, which reached $35.7 million, while showroom sales rose by 0.6% to $97.1 million. However, sales from other channels, including pop-up shops and the Loved by Lovesac program, fell by 36.3% to $5.5 million.

The company's gross profit also decreased by 3.2% to $72.0 million, resulting in a gross margin of 52.1%, down from 53.7% in the prior year. This decline was primarily driven by increased inbound transportation and tariff costs, which rose by 380 basis points, and higher outbound transportation and warehousing costs. Operating expenses remained relatively stable, with a slight increase of 2.2% to $89.3 million, leading to an operating loss of $17.4 million compared to a loss of $15.0 million in the previous year. The net loss for the quarter was $11.1 million, slightly higher than the $10.8 million loss reported in the same period last year.

In terms of operational developments, Lovesac opened six new showrooms during the quarter, bringing the total to 281 locations across the United States. The company also reported a decrease in both repeat and new customer counts, down 1.2% and 2.5%, respectively. The decline in customer counts contrasts with the previous year, where repeat and new customers had increased by 23.0% and 1.2%, respectively. The company continues to focus on its omni-channel strategy, which includes a mix of showrooms, e-commerce, and other sales channels.

Looking ahead, Lovesac remains cautious about the macroeconomic environment, which includes factors such as inflation, elevated interest rates, and potential recessionary conditions that could impact consumer spending. The company is actively pursuing initiatives to increase domestic manufacturing to enhance supply chain reliability and mitigate tariff risks. Additionally, Lovesac has filed for refunds of previously paid tariffs, although the timing and amount of these refunds remain uncertain. The company believes that its current cash position of $57.0 million, along with available credit, will be sufficient to meet its working capital needs for the next 12 months.