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The Lovesac Co (LOVE)
:LOVE
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The Lovesac Company
(NASDAQ:LOVE)
Rating:66Neutral
Price Target:
$22.00
▲(12.53%Upside)
Positive Factors
Financial Performance
Lovesac reported results beating expectations on top- and bottom-line, with management characterizing the quarter as a strong finish to a challenging year.
Market Strategy
Lovesac is positioning itself to continue to take market share by driving long-term sustainable growth while also generating profits and free cash flow with the benefit of a strong, debt-free balance sheet.
Product Innovation
The company showcased its ability to develop multiple product platforms and acquire customers via a robust omni-channel strategy.
Negative Factors
Macro Environment
Management attributed the softness primarily to the unfavorable macro environment, which is expected to continue, still projecting a 10% decline for the category.
Tariff Impact
The actual amount of tariff payments will likely be higher due to the increased China tariffs on product that is too near term to move out.
The Lovesac Company (LOVE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$278.05M
Dividend YieldN/A
Average Volume (3M)381.47K
Price to Earnings (P/E)32.5
Beta (1Y)2.01
Revenue Growth-2.80%
EPS Growth-49.06%
CountryUS
Employees920
SectorConsumer Cyclical
Sector Strength74
IndustryFurnishings, Fixtures & Appliances
Share Statistics
EPS (TTM)2.13
Shares Outstanding14,845,078
10 Day Avg. Volume281,664
30 Day Avg. Volume381,469
Financial Highlights & Ratios
PEG Ratio0.38
Price to Book (P/B)1.42
Price to Sales (P/S)0.00
P/FCF Ratio17.09
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$31.00Price Target Upside58.57% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
The Lovesac Company Business Overview & Revenue Model
Company DescriptionThe Lovesac Company designs, manufactures, and sells furniture. It offers sactionals, such as seats and sides; sacs, including foam beanbag chairs; and accessories comprising drink holders, footsac blankets, decorative pillows, fitted seat tables, and ottomans. As of January 30, 2022, the company operated 146 showrooms. It markets its products primarily through lovesac.com website, as well as showrooms at top tier malls, lifestyle centers, kiosks, mobile concierges, and street locations in 39 states of the United States; and in store pop-up- shops and shop-in-shops. The Lovesac Company was founded in 1995 and is headquartered in Stamford, Connecticut.
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:Apr 10, 2025
(Q4-2025)
| % Change Since: 22.72%|
Next Earnings Date:Jun 12, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted successful product launches, strong financial performance, and market share gains as key positive aspects. However, revenue decline and supply chain challenges due to potential tariffs were notable concerns. Despite these challenges, the company's strategic initiatives and leadership changes position it well for future growth.Q4-2025 Updates
Positive Updates
Successful Product Launches
Fiscal 2025 was a prolific year for product launches, including the PillowSac Accent Chair, Reclining Seat, and AnyTable. The Reclining Seat sold over 18,500 units, with a nearly 50-50 split between new and repeat customers, and exceeded expectations.
Strong Financial Performance
Gross margin increased to nearly 59% for fiscal 2025, providing flexibility to navigate macroeconomic conditions. The company ended the fiscal year with a healthy balance sheet, including $83.7 million in cash and no borrowings.
Market Share Gains
Despite challenging macroeconomic conditions, Lovesac achieved market share gains for fiscal 2025, demonstrating the strength of its business model and product offerings.
New Leadership Appointment
Heidi Cooley joined as Chief Brand and Marketing Officer, bringing 20 years of experience, including transforming the Crocs brand into a multibillion-dollar business.
Negative Updates
Revenue Decline
Net sales decreased by $9 million or 3.6% in the fourth quarter compared to the prior year, driven by a decrease of 9.4% in omnichannel comparable net sales.
Supply Chain Challenges
Despite diversification efforts, China still accounted for 13% of sourcing, posing potential risks from increased tariffs.
Category Headwinds
The overall home furnishings category faced challenges, with a reported 9% headwind for the year, impacting revenue growth.
Company Guidance
During the Lovesac Fourth Quarter Fiscal 2025 Earnings Conference Call, the company provided several key metrics and guidance for the upcoming fiscal year. The company's net sales for fiscal 2025 were $680.6 million, with a gross margin of nearly 59%. The fourth quarter saw net sales of $241.5 million, with showroom net sales decreasing by 1.6% to $154.5 million and internet net sales down by 9.7%. The recliner launch was a significant success with over 18,500 units sold, contributing to the company's market share gains. For fiscal 2026, Lovesac anticipates net sales of $700 million to $750 million and an adjusted EBITDA between $48 million and $60 million. The company plans to launch the new EverCouch platform, aiming to expand into the $14 billion couch category and enhance its market presence with innovative product offerings. Despite macroeconomic challenges, Lovesac remains optimistic about its growth potential, supported by a healthy balance sheet with $83.7 million in cash and no borrowings on its credit facility.The Lovesac Company Financial Statement Overview
Summary
The Lovesac Company exhibits solid financial performance with strong profitability and efficient cash flow management. However, the increase in leverage and recent revenue decline pose potential risks, necessitating a focus on revenue growth and managing debt levels.Income Statement
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.72
Positive
Balance Sheet
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.65
Positive
Cash Flow
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.68
Positive
| Breakdown | ||||
| Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 680.63M | 700.26M | 651.54M | 498.24M | 320.74M | Gross Profit |
| 397.83M | 388.44M | 345.83M | 273.35M | 174.77M | EBIT |
| 13.65M | 30.08M | 39.02M | 38.44M | 14.88M | EBITDA |
| 28.36M | 42.68M | 47.81M | 46.30M | 21.49M | Net Income Common Stockholders |
| 11.56M | 23.86M | 26.49M | 47.49M | 14.73M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 83.73M | 87.04M | 43.53M | 92.39M | 78.34M | Total Assets |
| 532.25M | 482.18M | 418.05M | 371.58M | 171.02M | Total Debt |
| 183.02M | 175.50M | 157.85M | 112.96M | 0.00 | Net Debt |
| 99.29M | 88.47M | 114.32M | 20.56M | -78.34M | Total Liabilities |
| 315.89M | 264.68M | 224.79M | 215.35M | 63.07M | Stockholders Equity |
| 216.35M | 217.50M | 193.26M | 156.23M | 107.95M |
| Cash Flow | Free Cash Flow | |||
| 17.95M | 47.23M | -46.92M | 17.53M | 31.47M | Operating Cash Flow |
| 38.98M | 76.44M | -21.38M | 34.02M | 40.52M | 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
Neutral
19.55
Price Trends
19.03
Positive
20.57
Negative
24.30
Negative
Market Momentum
-0.11
Positive
50.45
Neutral
46.17
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LOVE, the sentiment is Neutral. The current price of 19.55 is below the 20-day moving average (MA) of 19.81, above the 50-day MA of 19.03, and below the 200-day MA of 24.30, indicating a neutral trend. The MACD of -0.11 indicates Positive momentum. The RSI at 50.45 is Neutral, neither overbought nor oversold. The STOCH value of 46.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 1 New Risks
1.
We cannot guarantee that our share repurchase program will be fully consummated or will enhance long-term stockholder value, and share repurchases could increase the volatility of the trading price of our common stock and diminish our cash reserves. Q4, 2024
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 |
|---|---|---|---|---|---|---|---|
76 Outperform | $154.93M | 11.56 | 9.48% | 2.17% | 7.24% | -9.51% | |
73 Outperform | $110.84M | 6.57 | 33.52% | ― | 9.44% | 102.67% | |
66 Neutral | $278.05M | 32.54 | 5.33% | ― | -2.80% | -49.06% | |
62 Neutral | $6.90B | 11.24 | 2.93% | 3.89% | 2.68% | -24.71% | |
56 Neutral | $107.03M | ― | -5.89% | 9.20% | -8.26% | -233.72% | |
56 Neutral | $217.54M | ― | 9.10% | ― | -12.36% | 37.69% | |
54 Neutral | $142.49M | ― | -3.83% | 4.80% | -11.78% | -13.89% |
* Consumer Cyclical Sector Average
Performance Comparison
LOVE
The Lovesac Company
19.55
-8.17
-29.47%
BSET
Bassett Furniture
16.19
2.07
14.66%
FLXS
Flexsteel
30.57
-5.50
-15.25%
HOFT
Hooker Furniture
11.20
-4.90
-30.43%
KEQU
Kewaunee Scientific
41.40
-0.30
-0.72%
SNBR
Sleep Number
10.07
-5.67
-36.02%
The Lovesac Company Corporate Events
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
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.