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The Lovesac Company (LOVE)
NASDAQ:LOVE
US Market

The Lovesac Company (LOVE) AI Stock Analysis

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The Lovesac Company

(NASDAQ:LOVE)

Rating:61Neutral
Price Target:
$17.50
▲(5.11%Upside)
The overall stock score reflects strong earnings call performance and solid financial health, tempered by weak technical indicators and valuation concerns. The company's positive product innovation and revenue growth are significant strengths, while the technical analysis suggests potential short-term challenges.
Positive Factors
Partnerships
The end of the partnership with Best Buy allows the company to focus on its own showroom and digital ecosystem, enhancing long-term profitability and brand control.
Product Innovation
The introduction of new products like Evercouch and Recliner, alongside target marketing, is expected to drive improved performance in the second half of the fiscal year.
Valuation
The company's valuation is considered attractive at current levels, trading at a lower multiple compared to the peer average, supporting the Buy rating.
Negative Factors
Guidance
F2Q guidance for The Lovesac Company misses expectations.
Inventory Challenges
Profitability was below consensus, in part reflecting softer-than-expected gross margins as the company works through China-based inventory.
Profitability
The company's profitability metrics for the upcoming quarter are below expectations, impacting the stock negatively.

The Lovesac Company (LOVE) vs. SPDR S&P 500 ETF (SPY)

The Lovesac Company Business Overview & Revenue Model

Company DescriptionThe Lovesac Company (LOVE) is a U.S.-based furniture retailer known for its innovative and adaptable furniture designs. Specializing in modular furniture, the company primarily offers its line of Sactionals, which are versatile and customizable sectional couches, and Sacs, which are high-quality bean bag chairs. Lovesac operates in the home furnishing sector, emphasizing sustainable materials and technology-driven features to enhance consumer experiences. The company's retail presence includes both physical showrooms across the United States and a robust e-commerce platform.
How the Company Makes MoneyThe Lovesac Company generates revenue through the sale of its core products: Sactionals and Sacs. Sactionals are modular sofas that allow customers to purchase different pieces and covers to create customized configurations, offering flexibility and longevity. Sacs are bean bag chairs available in various sizes and covers. The company's revenue model is primarily direct-to-consumer, facilitated through its online store and showrooms. Lovesac also generates income from sales of accessories and covers, which allow customers to refresh or modify their furniture's appearance. Strategic partnerships with technology companies have allowed Lovesac to integrate audio and other tech features into its products, potentially increasing their appeal and value proposition. The company's focus on sustainable and high-quality materials also helps differentiate its offerings in a competitive market.

The Lovesac Company Earnings Call Summary

Earnings Call Date:Jun 12, 2025
(Q1-2026)
|
% Change Since: -18.78%|
Next Earnings Date:Sep 11, 2025
Earnings Call Sentiment Positive
The earnings call reflected a generally positive sentiment with notable growth in showroom sales and successful product innovations like EverCouch and the reclining seat. However, challenges such as a decline in internet sales and pressures from a highly promotional environment were also evident. The decision to end the Best Buy partnership, while strategically sound, led to some financial adjustments.
Q1-2026 Updates
Positive Updates
Revenue Growth
Total net sales increased 4.3% year-over-year to $138.4 million, with showroom net sales up 18.2%.
Product Innovation Success
The Recline of Civilization campaign for the new reclining seat generated 5 billion earned impressions and increased engagements by over 600% across digital channels.
EverCouch Launch
EverCouch, a new product platform, doubled Lovesac's total addressable market, receiving positive initial feedback and expanding to 27 showrooms.
Healthy Balance Sheet
The company ended the quarter with $26.9 million in cash and $36 million in committed availability, with no borrowings on their credit facility.
Negative Updates
Decline in Internet Sales
Internet net sales decreased by 8.9% to $33.3 million compared to the prior year period.
Promotional Environment Pressure
Gross margin decreased by 60 basis points due to higher promotional discounting, despite the company maintaining a competitive position.
Decision to End Best Buy Partnership
The company decided to end its partnership with Best Buy, resulting in a nonrecurring charge of approximately $2 million in the second quarter.
Company Guidance
During The Lovesac Company's fiscal 2026 first-quarter earnings call, guidance was provided with several key metrics outlined. The company reported total net sales of $138.4 million, marking a year-over-year increase of 4.3%, despite a 5% decline in the overall category. Omnichannel comparable net sales rose by 2.8%, driven by new and non-comparable touchpoint contributions. The company achieved SG&A leverage and improved adjusted EBITDA, net loss, and net loss per common share by double-digit percentages from the previous year. Lovesac reaffirmed its full-year guidance, estimating net sales between $700 million and $750 million, with an adjusted EBITDA ranging from $48 million to $60 million. For the second quarter, they projected net sales of $157 million to $166 million and an adjusted EBITDA loss between $2 million and $7 million. The company's strategy to mitigate tariff impacts was emphasized, alongside a focus on innovation, exemplified by the successful launch of the EverCouch platform.

The Lovesac Company Financial Statement Overview

Summary
The Lovesac Company demonstrates solid financial performance with strong profitability and efficient cash flow management. However, the increase in leverage and recent revenue decline pose potential risks. Continued focus on revenue growth and managing debt levels will be crucial for sustaining financial stability.
Income Statement
72
Positive
The company's income statement shows strong profitability with a consistent gross profit margin over the years. The net profit margin has improved significantly since 2020, indicating better cost management. However, revenue growth has been volatile, with a decline in the most recent year. The EBIT and EBITDA margins remain healthy, supporting overall profitability.
Balance Sheet
65
Positive
The balance sheet reflects moderate financial health. The debt-to-equity ratio has increased, suggesting higher leverage and potential risk. Return on equity is positive, indicating efficient use of shareholder funds. The equity ratio is stable, reflecting a solid financial foundation, although the increasing liabilities warrant close monitoring.
Cash Flow
68
Positive
Cash flow analysis reveals a strong free cash flow growth in recent years, recovering from previous negative figures. The operating cash flow to net income ratio is favorable, indicating effective cash generation from operations. However, the free cash flow to net income ratio shows some volatility, suggesting potential challenges in capital expenditure management.
Breakdown
Mar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income StatementTotal Revenue
680.63M700.26M651.54M498.24M320.74M
Gross Profit
397.83M388.44M345.83M273.35M174.77M
EBIT
13.65M30.08M39.02M38.44M14.88M
EBITDA
28.36M42.68M47.81M46.30M21.49M
Net Income Common Stockholders
11.56M23.86M26.49M47.49M14.73M
Balance SheetCash, Cash Equivalents and Short-Term Investments
83.73M87.04M43.53M92.39M78.34M
Total Assets
532.25M482.18M418.05M371.58M171.02M
Total Debt
183.02M175.50M157.85M112.96M0.00
Net Debt
99.29M88.47M114.32M20.56M-78.34M
Total Liabilities
315.89M264.68M224.79M215.35M63.07M
Stockholders Equity
216.35M217.50M193.26M156.23M107.95M
Cash FlowFree Cash Flow
17.95M47.23M-46.92M17.53M31.47M
Operating Cash Flow
38.98M76.44M-21.38M34.02M40.52M
Investing Cash Flow
-21.52M-29.21M-25.55M-16.49M-9.05M
Financing Cash Flow
-20.76M-3.73M-1.94M-3.48M-1.67M

The Lovesac Company Technical Analysis

Technical Analysis Sentiment
Negative
Last Price16.65
Price Trends
50DMA
19.17
Negative
100DMA
20.00
Negative
200DMA
24.12
Negative
Market Momentum
MACD
-0.30
Positive
RSI
34.54
Neutral
STOCH
25.68
Neutral
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 16.65 is below the 20-day moving average (MA) of 19.25, below the 50-day MA of 19.17, and below the 200-day MA of 24.12, indicating a bearish trend. The MACD of -0.30 indicates Positive momentum. The RSI at 34.54 is Neutral, neither overbought nor oversold. The STOCH value of 25.68 is Neutral, 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 (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$155.09M11.579.48%2.31%7.24%-9.51%
73
Outperform
$105.79M6.2733.52%9.44%102.67%
62
Neutral
$6.82B11.052.80%4.32%2.67%-24.92%
61
Neutral
$242.24M23.716.73%-0.77%-8.89%
54
Neutral
$137.05M-3.83%5.08%-11.78%-13.89%
53
Neutral
$108.95M-5.55%9.04%-3.89%-391.05%
43
Neutral
$160.89M9.10%-12.36%37.69%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
LOVE
The Lovesac Company
16.65
-7.61
-31.37%
BSET
Bassett Furniture
15.74
2.12
15.57%
FLXS
Flexsteel
29.41
-4.49
-13.24%
HOFT
Hooker Furniture
10.18
-3.12
-23.46%
KEQU
Kewaunee Scientific
37.06
-2.44
-6.18%
SNBR
Sleep Number
7.10
-4.99
-41.27%

The Lovesac Company Corporate Events

Legal Proceedings
Lovesac Receives Preliminary Approval for Settlement
Neutral
Jun 13, 2025

On June 3, 2025, the United States District Court for the District of Connecticut granted preliminary approval for a proposed settlement in the consolidated derivative actions involving The Lovesac Company. The settlement addresses claims of fiduciary breaches and other misconduct by Lovesac’s officers and directors related to financial misstatements and internal control weaknesses. If approved, the settlement will result in corporate governance reforms and the release of all related claims, providing substantial benefits to Lovesac and its shareholders.

The most recent analyst rating on (LOVE) stock is a Buy with a $30.00 price target. To see the full list of analyst forecasts on The Lovesac Company stock, see the LOVE Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Lovesac Elects Board Directors, Fails Compensation Approval
Neutral
Jun 11, 2025

At the 2025 Annual Meeting of Stockholders held on June 10, 2025, The Lovesac Company elected six directors to its Board, with Shawn Nelson receiving the highest votes. However, the advisory approval for the fiscal 2025 compensation for named executive officers was not passed, while the appointment of Deloitte & Touche LLP as the independent auditor for the fiscal year ending February 1, 2026, was ratified.

The most recent analyst rating on (LOVE) stock is a Buy with a $30.00 price target. To see the full list of analyst forecasts on The Lovesac Company stock, see the LOVE Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Lovesac Announces Board Member Resignation
Neutral
May 22, 2025

On May 22, 2025, The Lovesac Company announced that Mr. John Grafer will resign from the Board of Directors and all its committees, effective June 10, 2025, coinciding with the company’s annual meeting. His resignation is not due to any disagreements with the company’s operations, policies, or practices.

The most recent analyst rating on (LOVE) stock is a Buy with a $30.00 price target. To see the full list of analyst forecasts on The Lovesac Company stock, see the LOVE Stock Forecast page.

Executive/Board ChangesShareholder Meetings
The Lovesac Company Announces Board Member Resignation
Neutral
Apr 9, 2025

On April 3, 2025, The Lovesac Company announced that Jack A. Krause will resign from its Board of Directors after the annual meeting of stockholders on June 10, 2025. His resignation is not due to any disagreements with the company’s operations, policies, or practices, suggesting a smooth transition and continuity in the company’s governance.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.