Furniture maker Lovesac Q2 sales miss estimates despite showroom expansion
Furniture maker Lovesac Q2 sales miss estimates despite showroom expansion
Overview
U.S. furniture maker's Q2 net sales rose slightly yr/yr but missed analyst expectations
Q2 adjusted EBITDA beat analyst expectations
Gross margin improved due to tariff refunds and product margin gains
Outlook
Lovesac sees full-year net sales between $690 mln and $710 mln
Company expects full-year net income of $14.5 mln to $18.5 mln
Lovesac expects Q3 net sales between $140 mln and $150 mln
Result Drivers
NEW SHOWROOMS - Net sales growth was mainly driven by the addition of 14 net new showrooms, partially offset by declining comparable sales and closure of Best Buy shop-in-shop locations
TARIFF REFUNDS - Gross margin improvement was primarily due to IEEPA tariff recoveries, which contributed 1,240 basis points to margin
PRICE INCREASES - Product margin improved due to price increases, though partially offset by higher promotional discounting and increased transportation costs
Company press release: ID:nGNX5kLbql
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Sales | Miss | $161.20 mln | $165.49 mln (5 Analysts) |
Q2 EPS |
| $0.51 |
|
Q2 Net Income |
| $7.40 mln |
|
Q2 Adjusted EBITDA | Beat | -$1.30 mln | -$1.44 mln (5 Analysts) |
Q2 Gross Margin |
| 68.40% |
|
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 $22.00, about 37.2% above its September 9 closing price of $16.03
The stock recently traded at 21 times the next 12-month earnings vs. a P/E of 19 three months ago
Reuters Recommended Reads
Sept 9 - Footwear retailer Caleres' Q2 sales beat estimates on gains across brands
Sept 10 - Shoe Station Group's Q2 sales miss estimates, lowers outlook
Sept 10 - Designer Brands Inc Q2 profit rises on margin expansion, lifts FY outlook
For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.
(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.)