Modular sofa maker Lovesac misses Q3 sales estimates

Overview

• Lovesac's fiscal Q3 net sales rose 0.2% but missed analyst expectations

• Adjusted EBITDA for fiscal Q3 missed analyst expectations

• Company's results driven by showroom expansion and marketing strategy adjustments

Outlook

• Company expects full-year net sales between $685 mln and $705 mln

• Lovesac projects fourth-quarter net sales of $236 mln to $256 mln

• Company anticipates full-year net income between $2 mln and $8 mln

Result Drivers

• SHOWROOM EXPANSION - Net sales increased slightly due to the addition of 17 new showrooms, despite a decline in omni-channel comparable net sales

• HIGHER COSTS - Gross profit and margin decreased due to increased transportation and tariff costs, partially offset by vendor cost reductions

• MARKETING CAMPAIGN - Increased advertising and marketing expenses were driven by a new product marketing campaign

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the home furnishings peer group is "hold."

• Wall Street's median 12-month price target for Lovesac Co is $29.00, about 111.1% above its December 10 closing price of $13.74

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 15 three months ago

Press Release: ID:nGNX28rkGP

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)