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Aug 03
Lovesac Q2 2026 Earnings Report
Lovesac reported modest revenue growth but a larger net loss amid margin pressure and shifting channel mix.
Key Takeaways
Lovesac saw net sales increase 2.5% in Q2 2026, driven by showroom growth, but suffered a net loss of $6.7M due to margin compression and higher discounting. Gross margin declined and internet and wholesale revenues fell.
Net sales rose 2.5% YoY to $160.5M, fueled by showroom performance.
Gross margin dropped to 56.4% due to freight and discounting impacts.
Net loss widened to $6.7M, or $(0.45) per share.
Adjusted EBITDA fell to $837K from $1.5M in Q2 FY25.
Lovesac
Lovesac
Lovesac Revenue by Segment
Revenue by Segment
Showrooms Revenue
CapyFin.comInternet Revenue
CapyFin.comOther Sales Channel Revenue
CapyFin.com Forward Guidance
Lovesac expects full-year FY26 revenue between $710M–$740M and positive net income, despite forecasting a net loss in Q3.
Positive Outlook
- Full-year revenue expected between $710M and $740M.
- Net income expected between $8M and $17M for FY26.
- Q3 sales guided between $151M and $161M.
- Adjusted EBITDA guidance of $42M–$55M for the full year.
- Ongoing product innovation and brand evolution strategy.
Challenges Ahead
- Q3 net loss projected between $8M and $12M.
- Gross margin pressure due to freight and discounting expected to persist.
- Adjusted EBITDA loss of up to $7M expected in Q3.
- Inventory levels remain elevated at $124M.
- Lower cash balance at $34.2M, down from $83.7M at year start.
Revenue & Expenses
Visualization of income flow from segment revenue to net income