The Lovesac Company reported a decrease in net sales for fiscal year 2025, totaling $680.6 million, down 2.8% from $700.3 million in fiscal 2024. This decline was attributed to a 9.3% drop in omni-channel comparable net sales, despite the opening of new showrooms. The company's showroom sales decreased by 2.6%, while internet sales saw a slight decline of 1.7%. The overall decrease in sales was partially offset by a 1.4% increase in new customer transactions, although this was significantly lower than the 13.3% growth seen in the previous fiscal year.
Gross profit for the year was $397.8 million, reflecting a marginal decrease of 0.8% from the prior year, but gross margin improved to 58.5%, up from 57.3%. This improvement was primarily driven by a reduction in inbound transportation costs, although it was partially offset by increased promotional discounting and higher outbound transportation costs. Selling, general, and administrative expenses rose by 6.5% to $281.5 million, largely due to increased payroll and equity-based compensation, as well as costs associated with a settlement with the SEC.
Lovesac's operational metrics indicate a strategic focus on expanding its showroom presence, with a total of 257 showrooms as of February 2, 2025. The company opened five additional Best Buy shop-in-shop locations, contributing to its omni-channel strategy. However, the company also faced challenges, including a decrease in barter transactions and lower productivity from temporary online pop-up shops. The company’s workforce included 920 full-time and 1,104 part-time associates, reflecting its commitment to maintaining a robust operational structure.
Looking ahead, Lovesac aims to continue its growth trajectory by investing in new showroom openings and enhancing its product offerings, including recent launches such as the PillowSac Accent Chair and Sactionals Reclining Seat. The company remains focused on its "Designed for Life" philosophy, which emphasizes sustainability and adaptability in its product lines. Despite the challenges posed by macroeconomic factors, including inflation and consumer spending patterns, Lovesac is optimistic about its ability to leverage its unique product offerings and omni-channel sales strategy to drive future growth.
About Lovesac Co
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