Overview

* Lovesac ( LOVE ) fiscal Q2 net sales rise 2.5%, beating analyst expectations, per LSEG data

* Adjusted EBITDA for fiscal Q2 beats consensus, despite ongoing category headwinds

* Company reports net loss of $6.7 mln, impacted by higher transportation costs

Outlook

* Lovesac ( LOVE ) sees full-year net sales between $710 mln and $740 mln

* Company expects full-year adjusted EBITDA between $42 mln and $55 mln

* Lovesac ( LOVE ) projects Q3 net sales between $151 mln and $161 mln

* Company anticipates Q3 adjusted EBITDA loss of $1 mln to $7 mln

Result Drivers

* SALES GROWTH - Net sales increased 2.5% in Q2, driven by a 0.9% rise in omni-channel sales and 16 new showrooms

* GROSS MARGIN DECLINE - Gross margin fell 260 bps due to higher transportation costs and increased promotional discounting

* SG&A REDUCTION - SG&A expenses decreased by 2.1% due to lower professional fees and credit card costs, offset by Best Buy partnership termination costs

Key Details

Metric Beat/Mis Actual Consensu

s s

Estimate

Q2 Sales Slight $160.50 $160.20

beat mln mln (5

Analysts

)

Q2 EPS -$0.45

Q2 Net -$6.70

Income mln

Q2 Beat $800,000 -$5.49

Adjusted mln (5

EBITDA Analysts

)

Q2 Gross 56.4%

Margin

Q2 Basic -$0.45

EPS

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 ( LOVE ) is $28.00, about 25.9% above its September 10 closing price of $20.75

* The stock recently traded at 17 times the next 12-month earnings vs. a P/E of 17 three months ago

Press Release:

(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.)