1. Lovesac's Q3 FY26 net sales increased 0.2% to $150.2 million. 2. Showroom sales grew 12.8%, but online sales dropped by 16.9%. 3. Net loss widened to $10.6 million from $4.9 million year-over-year. 4. Marketing adjustments boosted Q4 visibility, capitalizing on holiday sales. 5. Company targets three million households using Lovesac products by 2030.
FAQ
Why Neutral?
While sales growth was noted, increased losses and declining online revenues suggest caution, similar to past periods of rising operational costs leading to pressure on profitability.
How important is it?
The slight revenue growth amidst rising losses indicates mixed signals for investors, affecting trading comfort and confidence levels.
Why Short Term?
Immediate sales trends and losses will impact investor sentiment; longer-term targets may not offset short-term concerns.
The Lovesac Company Reports Third Quarter Fiscal 2026 Financial Results
STAMFORD, Conn., December 11, 2025 (GLOBE NEWSWIRE) -- The Lovesac Company (Nasdaq: LOVE), a leader in the home and technology sector known for its award-winning Sactionals, reported its financial results for the third quarter of fiscal 2026, concluding on November 2, 2025. The company experienced a slight year-over-year growth in net sales, driven by strategic initiatives despite a challenging market environment.
Key Financial Highlights
For the third quarter of fiscal 2026, Lovesac reported a total net sales of $150.2 million, representing a modest increase of 0.2% compared to the same period last year. This growth was primarily supported by the addition of 17 new showrooms, despite a decline in omni-channel comparable net sales.
- Net Sales by Channel:
- Showrooms: $102.7 million (up 12.8%)
- Internet: $37.3 million (down 16.9%)
- Other: $10.2 million (down 27.3%)
- Gross Profit: $84.2 million (down 3.9%) with a gross margin of 56.1%
- Net Loss: $(10.6) million or $(0.72) per share
CEO Insights and Future Outlook
Shawn Nelson, CEO of Lovesac, commented on the results, stating, “Our focus on secular growth initiatives, such as new products and an evolving marketing strategy, has enabled us to achieve slight year-over-year growth in net sales. As we enter fiscal fourth quarter, we have adjusted our marketing strategies, which has resulted in solid growth quarter-to-date, particularly during the Black Friday and Cyber Monday holiday events.”
Nelson emphasized the company’s commitment to reaching three million Lovesac households by 2030, stating, “We believe that such an expansion will yield significant growth over the next few years, irrespective of macroeconomic fluctuations.”
Operational Insights
While the overall net growth in net sales was modest, several operational challenges were noted in the latest quarter:
- Operating expenses rose by 4.9%, predominantly due to increased SG&A expenses.
- Advertising and marketing costs increased by 5.7% as the company executed a new product launch campaign.
- The operating loss stood at $(15.8) million, marking a significant increase from $(7.7) million in the prior year.
Year-to-Date Performance Summary
For the year-to-date period ended November 2, 2025, Lovesac reported a net sales increase of $9.9 million or 2.3%. The results also highlight ongoing challenges related to gross profit margins and increased operational costs characterized by:
- Gross profit decreased by $2.8 million or 1.1%.
- Net loss for the period reached $(28.0) million, or $(1.91) per diluted share.
- Increased payroll and operational overhead led to a 0.2% rise in SG&A expenses.
Conclusion
Despite a challenging retail environment, The Lovesac Company (Nasdaq: LOVE) remains focused on its strategic growth initiatives. The company's performance during the third quarter of fiscal 2026 reflects a steady commitment to innovation and market share expansion as it strives to fulfill its long-term goals.