The Lovesac Company (NASDAQ:LOVE) shares tumbled in premarket trading Thursday after reporting second-quarter results that, while showing some sales resilience, highlighted margin pressures and weaker-than-expected guidance.
The furniture retailer posted a second-quarter loss of 45 cents per share, narrower than the 71-cent loss anticipated by analysts. Quarterly sales rose 2.5% year-over-year to $160.53 million, slightly above the Street’s forecast of $160.23 million.
“Looking ahead, while we balance near-term industry dynamics amidst the evolving tariff landscape with our ongoing secular tailwinds, we remain confident in our objective to deliver meaningful long-term value as we aim to build the most loved home brand in America,” said CEO Shawn Nelson.
Second-quarter sales were primarily driven by an increase of 0.9% in omni-channel comparable net sales and the net addition of 16 new showrooms.
During the second quarter, Lovesac opened six additional showrooms and closed three showrooms.
Quarterly gross profit fell 1.9% year over year to $90.6 million. Gross margin slumped by 260 basis points to 56.4%.
Adjusted EBITDA slumped 44.1% in the quarter under review to $837,000.
The company posted an operating loss of $8.8 million in the quarter under review, slightly higher than the $8.4 million loss a year earlier.
Operating margin slipped to -5.5% of net sales from -5.3% last year.
The cash and equivalents balance as of August 3 was $34.2 million, as compared to $72.1 million in the year-ago period.
Total merchandise inventory at the end of the quarter was $124.0 million.
Outlook
Lovesac cut its fiscal 2026 GAAP EPS guidance to $0.52-$1.05, down from the prior view of $0.80-$1.36 and below the $1.04 consensus.
The company also narrowed its fiscal 2026 sales forecast to $710 million-$740 million, compared with its prior range of $700 million-$750 million and a $726 million estimate.
Price Action: LOVE shares are trading lower by 14.89% to $17.66 premarket at last check Thursday.
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