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Nov 03, 2024
Lovesac Q3 2025 Earnings Report
Net sales decreased due to a decline in omni-channel comparable net sales, though this was partially offset by the addition of new showrooms. Gross margin increased, driven by lower inbound transportation costs, while operating loss increased due to higher operating expenses.
Key Takeaways
Lovesac reported a decrease in net sales for Q3 2025, driven by a decline in omni-channel comparable net sales, despite an increase in the number of showrooms. The company experienced an increase in gross margin but also an increase in operating loss due to higher operating expenses. The company gained market share and strengthened its competitive position through product innovation and operational excellence.
Net sales decreased by 2.7% to $149.9 million compared to the prior year period, primarily driven by an 8.3% decrease in omni-channel comparable net sales.
Gross profit decreased slightly by 0.9% to $87.6 million, but gross margin increased by 110 basis points to 58.5%.
Operating loss was $7.7 million, compared to $3.6 million in the prior year period.
The company's cash and cash equivalents balance was $61.7 million as of November 3, 2024, compared to $37.7 million as of October 29, 2023.
Lovesac
Lovesac
Lovesac Revenue by Segment
Revenue by Segment
Showrooms Revenue
CapyFin.comInternet Revenue
CapyFin.comOther Revenue
CapyFin.com Forward Guidance
The Company expects net sales in the range of $660 million to $680 million, Adjusted EBITDA in the range of $37.5 million to $48.5 million, and net income in the range of $4.5 million to $12.5 million for the full year of fiscal 2025. For the fourth quarter of fiscal 2025, the Company expects net sales in the range of $221 million to $241 million, Adjusted EBITDA in the range of $43 million to $55 million, and net income in the range of $28 million to $36 million.
Positive Outlook
- Net sales in the range of $660 million to $680 million for fiscal year 2025.
- Adjusted EBITDA in the range of $37.5 million to $48.5 million for fiscal year 2025.
- Net income in the range of $4.5 million to $12.5 million for fiscal year 2025.
- Net sales in the range of $221 million to $241 million for the fourth quarter of fiscal 2025.
- Adjusted EBITDA in the range of $43 million to $55 million for the fourth quarter of fiscal 2025.
Challenges Ahead
- Near-term headwinds persisted through the pre-election period.
- Net sales decreased by 2.7% in the third quarter of fiscal 2025.
- Omni-channel comparable net sales decreased by 8.3% in the third quarter of fiscal 2025.
- Operating loss was $7.7 million in the third quarter of fiscal 2025.
- Fiscal 2025 will contain 52 weeks versus Fiscal 2024 which contained an additional “53rd week” in the fourth quarter.
Revenue & Expenses
Visualization of income flow from segment revenue to net income