Overview

• U.S. furniture retailer's fiscal Q1 net sales were flat, slightly beating analyst expectations

• Fiscal Q1 adjusted EBITDA loss narrowed and beat analyst expectations

• Gross margin declined due to higher transportation and tariff costs, partly offset by price increases

Outlook

• Lovesac sees full-year net sales between $700 mln and $740 mln

• Company expects Q2 net sales between $157 mln and $166 mln

Result Drivers

• SALES CHANNEL MIX - Flat net sales driven by unchanged showroom sales, higher internet sales, and decline in other channels due to closure of Best Buy shop-in-shop locations

• HIGHER TRANSPORTATION AND TARIFF COSTS - Gross margin declined due to increased inbound transportation and tariff costs, as well as higher outbound transportation and warehousing expenses

• PRICE INCREASES AND COST REDUCTION INITIATIVES - Product margin improved from price increases and cost reduction efforts, partly offset by higher promotional discounting

Company press release: ID:nGNX8ggRPK

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

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 "buy"

• Wall Street's median 12-month price target for Lovesac Co is $23.00, about 39.6% above its June 10 closing price of $16.48

• The stock recently traded at 20 times the next 12-month earnings vs. a P/E of 16 three months ago

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