The Lovesac Company Reports Q4 and Fiscal 2026 Financial Results, Provides 2027 Outlook

STAMFORD, CT – March 26, 2026 – The Lovesac Company (“Lovesac”, NASDAQ: LOVE), a home furniture and technology company, has announced its financial results for the fourth quarter and full fiscal year ended February 1, 2026. The company also issued guidance for fiscal 2027, giving shareholders and investors important insights into its current performance and future prospects.

Key Highlights from Q4 and Fiscal 2026

• Net Sales:
  • Q4: \$246.0 million, a slight increase of 2.4% from \$240.2 million in Q4 FY25.
  • Full Year: \$672.1 million, a minor year-over-year increase from \$670.3 million.
• Gross Profit:
  • Q4: \$144.0 million, down 1.2% from \$145.8 million in the year-ago quarter.
  • Gross margin declined to 58.5%, a decrease of 210 basis points.
  • Full Year: \$393.2 million, down 1.2% from \$397.8 million.
• Operating Expenses:
  • SG&A expenses increased 3.2% in Q4, mainly due to higher payroll (incentive compensation), product innovation costs, and overhead, partially offset by lower professional fees, equity-based compensation, and credit card fees.
  • Advertising and marketing expenses declined 4.7% to \$25.5 million in Q4, reflecting cost efficiencies.
  • Full year advertising and marketing expenses were relatively flat at \$88.7 million versus \$88.0 million in FY25.
• Net Income:
  • Q4: \$32.1 million, a decrease of 9.1% compared to \$35.3 million in Q4 FY25.
  • Full Year: \$4.1 million, down from \$7.6 million in FY25.
• EPS:
  • Q4 Basic EPS: \$2.19 (down 5.2% YoY); Diluted: \$2.19 (up 2.8% YoY).
  • Full Year Basic EPS: \$0.28 (down 62.7% YoY); Diluted: \$0.28 (down 62.7% YoY).
• Adjusted EBITDA:
  • Q4: \$49.6 million (up from \$47.8 million in Q4 FY25).
  • Full Year: \$47.8 million (up from \$49.6 million).
• Cash Flow and Balance Sheet:
  • Cash and cash equivalents at year-end: \$83.7 million, up from \$38.9 million the prior year, demonstrating improved liquidity.
  • No long-term debt outstanding.
  • Share repurchases: The company bought back \$6 million of its own stock in FY26 and \$19.9 million in FY25.

Fiscal 2027 Guidance – Potential Share Price Catalyst

The following guidance is likely to be closely watched by investors and could be price-sensitive:

• Net Sales: Expected in the range of \$700 million to \$750 million, reflecting potential growth of up to ~11.6% from FY26 results.
• Adjusted EBITDA: Projected between \$33 million and \$44 million.
• Net Income: Forecast between \$5 million and \$14 million.
• Diluted EPS: Anticipated to be between \$0.34 and \$0.95, based on approximately 14.7 million diluted weighted average shares outstanding.
• Q1 2027 Warning:
  • Adjusted EBITDA loss expected between \$12 million and \$16 million.
  • Net loss anticipated in the range of \$14 million to \$18 million.
  • Basic loss per share forecast at \$0.95 to \$1.22.
  • This Q1 outlook signals a weak start to the new fiscal year, which could pressure the stock.

Other Noteworthy Details

• Gross Margin Pressure: The company faced a 210 basis point decline in gross margin in Q4, highlighting possible increased costs or pricing challenges.
• Operating Leverage: SG&A increased, but advertising and marketing costs were well-managed and declined.
• Profitability Concerns: Despite positive net income in Q4, full-year earnings fell sharply, and Q1 FY27 is expected to be loss-making.
• Liquidity: A solid cash position with no long-term debt provides financial flexibility.
• Share Repurchases: Ongoing buybacks could offer downside support for the share price and signal management’s confidence in long-term value.

Potential Share Price Drivers

• Top-line Guidance: The company’s FY27 net sales outlook suggests solid growth, which may support the share price if achieved.
• Profitability Outlook: The wide range for net income and the warning of a Q1 loss may create uncertainty and share price volatility.
• Gross Margin Trends: Continued margin pressure could impact future earnings and investor sentiment.
• Cash Position and Buybacks: The healthy cash balance and ongoing share repurchases could reassure investors about financial health.

Cautionary Statements

Management noted that their outlook is based on current expectations and assumptions, and is subject to significant risks and uncertainties, including changes in consumer spending, inflation, supply chain disruptions, and competitive pressures. Investors are cautioned that actual results may differ materially from these projections.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Investors should consult the company’s filings and their own financial advisors before making investment decisions.

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