The Lovesac Company (NASDAQ:LOVE) stock fell Thursday after the company posted a wider quarterly loss and softer sales than expected.
The retailer also tightened its full-year outlook as higher costs and weaker comparable sales pressured results.
Lovesac reported a third-quarter EPS loss of 72 cents, missing Wall Street’s forecast for a 59-cent loss.
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Metrics
Quarterly sales of $150.166 million (+0.2% year over year), missed the Street view of $154.146 million.
The growth was primarily driven by the net addition of 17 new showrooms, partially offset by a decrease of 1.2% in omni-channel comparable net sales.
During the third quarter, the firm opened five additional showrooms and did not close any showrooms.
Quarterly gross profit fell 3.9% year over year to $84.2 million, while gross margin slumped 240 basis points to 56.1%.
The decrease was primarily driven by increases of 320 basis points in inbound transportation and tariff costs and 20 basis points in outbound transportation and warehousing costs.
Operating loss was $15.8 million in the third quarter compared to $7.7 million in the prior year period.
The cash and cash equivalents balance as of November 2, 2025, was $23.7 million as compared to $61.7 million a year ago. Total merchandise inventory was $129.7 million.
Outlook
Lovesac cut its fiscal 2026 GAAP earnings outlook to a range of 15 cents to 49 cents per share, down from its prior view of 52 cents to $1.05 and below the 85 cents analyst estimate.
The company also trimmed its fiscal 2026 revenue forecast to $685 million to $705 million, compared with its earlier projection of $710 million to $740 million and the $713.56 million consensus estimate.
“As we transitioned into our fiscal fourth quarter, we adjusted our marketing strategies and have seen solid growth quarter-to-date, inclusive of the Black Friday and Cyber Monday holiday events,” said CEO Shawn Nelson.
Lovesac expects fourth-quarter GAAP earnings of $1.88 to $2.22 per share, below the $2.33 analyst estimate, and projects revenue of $236 million to $256 million, compared with the $260.47 million consensus forecast.
“Our tall ambitions begin with reaching our goal of three million Lovesac households by 2030,” the CEO added.
LOVE Price Action: Lovesac shares were down 18.12% at $11.25 during premarket trading on Thursday, according to Benzinga Pro data.
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