Lovesac gross margin guidance driving stock lower, says DA Davidson

DA Davidson analyst Michael Baker keeps a Buy rating and $24 price target on Lovesac (LOVE) after its results and outlook. The market is reacting poorly to the company’s guidance, primarily on gross margins, though margins are likely to improve in Q4 as Lovesac cycles incremental promotions from last year, and longer-term, new product launches like the Snugg should help expand the company’s customer base and drive more share growth, the analyst tells investors in a research note.