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The Lovesac Co (LOVE)
:LOVE
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The Lovesac Company
(NASDAQ:LOVE)62Neutral
Positive Factors
Growth Strategy
Lovesac is reaping the benefits of years of strategic investment in product innovation, digital infrastructure, and customer acquisition, positioning itself to continue to take market share by driving long-term sustainable growth while generating profits and free cash flow.
Product Innovation
Lovesac demonstrated solid execution across its strategic roadmap, delivering several new product innovations during the quarter that are driving both repeat purchases and new customer acquisition.
Negative Factors
Revenue Outlook
Lovesac expects 4Q25 revenue to be down 4-12% y/y, and below consensus, highlighting ongoing category pressure.
The Lovesac Company (LOVE) vs. S&P 500 (SPY)
Market Cap
$274.40M
Dividend YieldN/A
Average Volume (3M)310.90K
Price to Earnings (P/E)49.9
Beta (1Y)2.09
Revenue Growth0.15%
EPS Growth-65.52%
CountryUS
Employees1,991
SectorConsumer Cyclical
Sector Strength53
IndustryHome and Homeware
Share Statistics
EPS (TTM)0.34
Shares Outstanding15,432,856
10 Day Avg. Volume402,266
30 Day Avg. Volume310,900
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.40
Price to Cash Flow (P/CF)-16.30
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$39.00Price Target Upside119.35% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
The Lovesac Company Business Overview & Revenue Model
Company DescriptionThe Lovesac Company, trading under the ticker symbol LOVE, is a high-end furniture retailer based in the United States. It specializes in designing and selling unique, modular furniture systems primarily for residential use. The company's flagship products include the 'Sactionals,' which are customizable and reconfigurable sectional sofas, and 'Sacs,' which are premium bean bag seats. Lovesac is known for its innovative use of technology and sustainable materials, striving to reduce waste and promote longevity in its furniture offerings.
How the Company Makes MoneyThe Lovesac Company generates revenue primarily through the direct sale of its furniture products, which are sold via its own branded showrooms, an e-commerce platform, and partnerships with third-party retailers. The company capitalizes on the premium pricing of its modular furniture systems, which attract a customer base seeking customizable and sustainable home solutions. Lovesac also engages in strategic partnerships and marketing collaborations to expand its market reach. Additionally, their focus on high-quality, durable products encourages repeat purchases and word-of-mouth referrals, further driving sales.
The Lovesac Company Financial Statement Overview
Summary
The Lovesac Company shows strong revenue growth and effective cost management, evidenced by stable gross margins. However, profitability pressures are reflected in declining net profit margins and return on equity. The balance sheet maintains moderate leverage, but there is room for improving equity strength. Cash flows are generally positive, yet growth inconsistency and lower free cash flow ratios highlight potential challenges in capital allocation. Overall, the company demonstrates growth potential but faces profitability and cash flow challenges.Income Statement
The Lovesac Company has demonstrated consistent revenue growth over recent years, with a notable increase from $320.7M in 2021 to $700.3M in 2024. The gross profit margin has remained healthy, currently at 57.24% for TTM, indicating effective cost management. However, the net profit margin has decreased, highlighting pressure on profitability. The TTM EBIT margin is strong at 9.96%, but the EBITDA margin is relatively low at 3.02%, suggesting higher depreciation or amortization expenses.75
Positive
Balance Sheet
The balance sheet shows a moderate debt-to-equity ratio of 0.93, indicating balanced leverage. The return on equity is declining, currently at 3.67% for TTM, which might suggest inefficiencies in generating profits from shareholders' equity. The equity ratio stands at 39.33%, reflecting a solid capital structure but with potential room for improvement in equity relative to total assets.70
Positive
Cash Flow
The cash flow position demonstrates resilience, with positive free cash flow in recent periods. However, the free cash flow growth rate has been inconsistent, with a significant decline from a previous positive trend. The operating cash flow to net income ratio of 7.12 for TTM is strong, indicating robust cash generation relative to net income, but the free cash flow to net income ratio is lower at 3.92, suggesting limited cash available after capital expenditures.65
Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 689.64M | 700.26M | 651.54M | 498.24M | 320.74M | 233.38M | Gross Profit |
| 394.73M | 388.44M | 345.83M | 273.35M | 174.77M | 116.69M | EBIT |
| 68.70M | 30.08M | 39.02M | 38.44M | 14.88M | -15.81M | EBITDA |
| 20.81M | 42.68M | 47.81M | 46.30M | 21.49M | -10.00M | Net Income Common Stockholders |
| 7.20M | 23.86M | 26.49M | 47.49M | 14.73M | -15.21M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 49.07M | 87.04M | 43.53M | 92.39M | 78.34M | 48.54M | Total Assets |
| 105.01M | 482.18M | 418.05M | 371.58M | 171.02M | 125.66M | Total Debt |
| 31.37K | 175.50M | 157.85M | 112.96M | 0.00 | 0.00 | Net Debt |
| -49.04M | 88.47M | 114.32M | 20.56M | -78.34M | -48.54M | Total Liabilities |
| 26.24M | 264.68M | 224.79M | 215.35M | 63.07M | 35.51M | Stockholders Equity |
| 78.77M | 217.50M | 193.26M | 156.23M | 107.95M | 90.15M |
| Cash Flow | Free Cash Flow | ||||
| 28.22M | 47.23M | -46.92M | 17.53M | 31.47M | -22.14M | Operating Cash Flow |
| 51.27M | 76.44M | -21.38M | 34.02M | 40.52M | -11.94M | Investing Cash Flow |
| -23.05M | -29.21M | -25.55M | -16.49M | -9.05M | -9.91M | Financing Cash Flow |
| -4.27M | -3.73M | -1.94M | -3.48M | -1.67M | 21.31M |
The Lovesac Company Technical Analysis
Negative
17.78
Price Trends
23.68
Negative
27.51
Negative
26.34
Negative
Market Momentum
-1.73
Positive
19.19
Positive
7.40
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LOVE, the sentiment is Negative. The current price of 17.78 is below the 20-day moving average (MA) of 21.37, below the 50-day MA of 23.68, and below the 200-day MA of 26.34, indicating a bearish trend. The MACD of -1.73 indicates Positive momentum. The RSI at 19.19 is Positive, neither overbought nor oversold. The STOCH value of 7.40 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LOVE.
The Lovesac Company Risk Analysis
The Lovesac Company disclosed 51 risk factors in its most recent earnings report. The Lovesac Company reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
The Lovesac Company Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $23.10B | 22.19 | 58.86% | 1.25% | -5.00% | 17.77% | |
70 Outperform | $358.23M | 18.38 | 6.48% | 5.76% | -19.60% | -60.94% | |
62 Neutral | $274.40M | 49.94 | 3.77% | ― | 0.15% | -65.52% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% | |
47 Neutral | $5.39B | 80.64 | -38.18% | ― | 1.41% | -62.21% | |
46 Neutral | $4.35B | ― | 17.86% | ― | -1.27% | 38.07% | |
41 Neutral | $288.36M | ― | 9.10% | ― | -11.28% | -1004.59% |
* Consumer Cyclical Sector Average
Performance Comparison
LOVE
The Lovesac Company
17.10
-5.12
-23.04%
HVT
Haverty
21.82
-10.06
-31.56%
SNBR
Sleep Number
7.57
-9.42
-55.44%
WSM
Williams-Sonoma
188.41
72.68
62.80%
RH
RH
262.43
-14.53
-5.25%
W
Wayfair
35.01
-26.53
-43.11%
The Lovesac Company Earnings Call Summary
Earnings Call Date: Dec 12, 2024 | % Change Since: -52.81% | Next Earnings Date: Apr 10, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a challenging quarter for Lovesac with a decline in net sales and increased expenses. However, the company has managed to gain market share and maintain a strong cash position. Product innovations are receiving positive feedback, indicating potential for future growth, although the current consumer environment remains uncertain.Highlights
Market Share Gains and Cash Position
Despite the challenging category environment, Lovesac achieved market share gains with the highest pre-holiday cash balance in years.
Product Innovation Success
Successful entry into new product categories including a power recliner and 'any table,' with the recliner exceeding expectations in terms of internal attachment rates and customer feedback.
Expansion and Omnichannel Growth
Continued expansion with 28 new showrooms and an 11.2% increase in net sales on a two-year basis.
Improved Gross Margin
Gross margin increased by 110 basis points to 58.5% due to decreases in inbound transportation costs and outbound transportation and warehousing costs.
Lowlights
Decline in Net Sales
Total net sales declined by 2.7% year-over-year to $149.9 million, with showroom net sales decreasing by 7.8%.
Decreased Comparable Sales
Total omnichannel comparable net sales decreased by 8.3%.
Increased SG&A Expenses
SG&A expenses increased to 47.9% of net sales, driven by higher payroll, equity-based compensation, and rent.
Lowered Fiscal Year Guidance
Lowered full-year guidance for net sales to $660 million - $680 million and adjusted EBITDA to $37.5 million - $48.5 million.
Challenges with Quote Conversion and Consumer Uncertainty
Despite double-digit quote growth, conversion rates were low due to consumer caution and persistent headwinds in the home category.
Company Guidance
During the Lovesac Q3 2025 earnings call, the company reported total net sales of $149.9 million, reflecting a year-over-year decline of 2.7%. The omnichannel comparable net sales decreased by 8.3%, though this was partially offset by contributions from new and non-comparable touchpoints. Adjusted EBITDA for the quarter was $2.7 million, slightly higher than the previous year. The company is facing headwinds, particularly in the pre-election period, impacting average order size conversions despite encouraging growth in quotes for large setups. Gross margin increased by 110 basis points to 58.5% of net sales, driven by decreases in inbound and outbound transportation costs, although product margins decreased due to higher promotional discounting. Lovesac's guidance for the full fiscal year 2025 anticipates net sales between $660 million and $680 million, with adjusted EBITDA projected to be between $37.5 million and $48.5 million. The outlook reflects ongoing challenges within the home category, despite positive developments in product innovation and market share gains.The Lovesac Company Corporate Events
Product-Related AnnouncementsBusiness Operations and Strategy
Lovesac Unveils Growth Plan with EverCouch Launch
Positive
Dec 17, 2024
During its recent Investor Day, Lovesac highlighted its commitment to profitable growth and innovation, demonstrating a strong track record despite changing market conditions. The company plans to launch new Designed For Life platforms, including entering the $14 billion sofa market with the EverCouch, leveraging its established brand strength and customer acquisition engines. Lovesac’s capital-light supply chain and focus on customer-centric models position it for continued expansion and market penetration, with a world-class leadership team driving its next growth phase.
Business Operations and StrategyFinancial Disclosures
The Lovesac Company Unveils Ambitious Growth Strategy
Positive
Dec 17, 2024
The Lovesac Company hosted its 2024 Investor Day, presenting a strategic framework and financial outlook for fiscal 2026, including a multi-year financial algorithm. The company targets an annual net sales growth of 7% to 12%, a gross margin rate of approximately 59%, and annual EPS growth of at least 100%, underlining its commitment to operational excellence and growth initiatives. These projections assume industry outperformance and exclude impacts from new tariffs, positioning Lovesac for significant growth in the coming years.
Product-Related AnnouncementsBusiness Operations and Strategy
Lovesac to Host 2024 Investor Day in NYC
Neutral
Dec 12, 2024
The Lovesac Company announced it will host its 2024 Investor Day on December 17 in New York City, where executives will present the company’s strategy, new products, and growth initiatives. This event, which includes a live webcast and a Q&A session, reflects Lovesac’s commitment to operational excellence and its ambition to enhance stakeholder engagement.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.