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1. Company Snapshot

1.a. Company Description

The Lovesac Company designs, manufactures, and sells furniture.It offers sactionals, such as seats and sides; sacs, including foam beanbag chairs; and accessories comprising drink holders, footsac blankets, decorative pillows, fitted seat tables, and ottomans.As of January 30, 2022, the company operated 146 showrooms.


It markets its products primarily through lovesac.com website, as well as showrooms at top tier malls, lifestyle centers, kiosks, mobile concierges, and street locations in 39 states of the United States; and in store pop-up- shops and shop-in-shops.The Lovesac Company was founded in 1995 and is headquartered in Stamford, Connecticut.

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1.b. Last Insights on LOVE

The Lovesac Company's recent performance was positively driven by revenue and profitability improvements, largely attributed to showroom expansion and new product launches. Despite macroeconomic uncertainty and tariff headwinds, the company remains debt-free with solid cash reserves. Management expects continued growth in revenue and profits for fiscal 2026. A recent earnings report revealed a quarterly loss of $0.45 per share, beating the Zacks Consensus Estimate of a loss of $0.72. The company also appointed Alan Boehme to its Board of Directors, effective August 27, 2025.

1.c. Company Highlights

2. Lovesac's Q3 Earnings: A Mixed Bag

Lovesac reported net sales of $150.2 million for Q3, a 0.2% increase year-over-year, slightly below the company's guidance range. Gross margin decreased 240 basis points to 56.1% due to increased tariffs, transportation costs, and promotional intensity. Adjusted EBITDA and net loss were within guidance ranges. EPS came in at -$0.72, slightly worse than the estimated -$0.7. The company's showroom sales increased 12.8% to $102.7 million, while internet sales decreased 16.9% to $37.3 million.

Publication Date: Dec -20

📋 Highlights
  • 3Q Net Sales:: $150.2M, reflecting 0.2% YoY growth with $1M below guidance.
  • Gross Margin Impact:: 240 bps decline to 56.1% driven by tariffs, transportation, and promotions.
  • Product Innovation:: Launched Snug sofa platform and Pillow Sac Chair Junior, with 2026 slated as most prolific year for new product introductions.
  • Customer Acquisition:: 20-25% discount via Love by Lovesac program and beta testing white glove delivery/assembly by Q1.
  • Financial Outlook:: Full-year net sales guidance $685-705M, with Q4 adjusted EBITDA $51-56M despite cautious macro environment.

Operational Highlights

The company continued to innovate with new product launches, including the Snug platform, Pillow Sac Chair Junior, and a fourth arm option for sectionals. Lovesac is also enhancing its customer experience with initiatives like BrandTor, a customer demonstration architecture, and expanded delivery and assembly services. The company is investing in digital marketing and e-commerce, with a focus on AI search and content creation.

Outlook and Guidance

Lovesac expects net sales of $685 million to $705 million for the full year, with adjusted EBITDA between $37 million and $43 million. For Q4, the company estimates net sales of $230 million to $256 million, with adjusted EBITDA between $51 million and $56 million. The company is taking a cautious approach due to industry headwinds and increased competition. As Shawn Nelson mentioned, "We're balancing prudence and efficiency with our belief that it's essential to stay focused on the big picture, that is, the massive long-term opportunity for tremendous value creation for all Lovesac stakeholders."

Valuation and Growth Prospects

Analysts estimate revenue growth of 3.3% for next year. The current P/S Ratio is 0.31, indicating a relatively low valuation. The EV/EBITDA ratio is 7.53, suggesting a reasonable valuation considering the company's growth prospects. Lovesac's ROE is 3.61%, and ROIC is 5.01%, indicating a moderate return on equity and invested capital. The company's focus on innovation, customer experience, and supply chain efficiency is expected to drive long-term growth.

3. NewsRoom

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The Lovesac Company Announces Participation in the 2026 ICR Conference

Jan -05

Source: globenewswire.com

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Couchmas is Here: Lovesac Officially Takes Over the Week Between Christmas and New Year

Dec -26

Source: prnewswire.com

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Corient Private Wealth LLC Buys New Stake in The Lovesac Company $LOVE

Dec -24

Source: defenseworld.net

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The Lovesac Company Publishes 2025 ESG Report

Dec -19

Source: globenewswire.com

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AWM Investment Company Inc. Buys 49,219 Shares of The Lovesac Company $LOVE

Dec -13

Source: defenseworld.net

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The Lovesac Company's Not Getting Any Love

Dec -11

Source: seekingalpha.com

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Lovesac: Demand Is Getting Crushed, And Margins Are Waning

Dec -11

Source: seekingalpha.com

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The Lovesac Company (LOVE) Q3 2026 Earnings Call Transcript

Dec -11

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.50%)

6. Segments

Sactionals

Expected Growth: 10.5%

Growing demand for modular and customizable furniture, increasing popularity of rearrangable living spaces, and rising consumer preference for comfort and style are driving the growth of Sactionals from The Lovesac Company.

Sacs

Expected Growth: 10.5%

Growing demand for comfortable and versatile furniture, increasing popularity of modular furniture, and rising consumer spending on home decor are expected to drive the growth of The Lovesac Company's patented foam-filled sacs.

Other

Expected Growth: 10.5%

Growing demand for Sactionals accessories and miscellaneous items, driven by increasing consumer preference for comfort and customization, is expected to drive growth in this segment.

7. Detailed Products

Sactionals

Modular, comfortable, and customizable seating solutions for living rooms, home theaters, and more.

Sacs

Comfortable, oversized, and stylish bean bag chairs for lounging and relaxation.

Sectionals

Configurable, stylish, and comfortable sectionals for living rooms, dens, and family rooms.

Pillows and Throws

Cozy, stylish, and comfortable pillows and throws to complement Lovesac's seating solutions.

Tables and Ottomans

Stylish, functional, and comfortable tables and ottomans to complement Lovesac's seating solutions.

8. The Lovesac Company's Porter Forces

Forces Ranking

Threat Of Substitutes

The Lovesac Company's products are moderately substitutable, as customers can opt for traditional furniture or other alternative seating options. However, the company's unique patented technology and high-quality products reduce the threat of substitutes.

Bargaining Power Of Customers

The Lovesac Company's customers have limited bargaining power due to the company's strong brand reputation and unique products. Customers are willing to pay a premium for the company's high-quality products, reducing their bargaining power.

Bargaining Power Of Suppliers

The Lovesac Company's suppliers have moderate bargaining power due to the company's dependence on a few key suppliers for raw materials. However, the company's strong relationships with suppliers and its ability to negotiate prices reduce the suppliers' bargaining power.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the furniture industry, including significant capital requirements and the need for specialized manufacturing capabilities. The Lovesac Company's patented technology and established brand reputation also deter new entrants.

Intensity Of Rivalry

The furniture industry is highly competitive, with many established players competing for market share. The Lovesac Company faces intense competition from traditional furniture retailers and online retailers, which increases the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 44.66%
Debt Cost 3.95%
Equity Weight 55.34%
Equity Cost 17.88%
WACC 11.66%
Leverage 80.69%

11. Quality Control: The Lovesac Company passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Interface

A-Score: 4.7/10

Value: 5.6

Growth: 5.4

Quality: 6.2

Yield: 0.0

Momentum: 6.0

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Leggett & Platt

A-Score: 4.3/10

Value: 8.4

Growth: 1.8

Quality: 4.7

Yield: 6.0

Momentum: 1.5

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
American Woodmark

A-Score: 4.1/10

Value: 7.9

Growth: 6.0

Quality: 4.8

Yield: 0.0

Momentum: 1.0

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Lifetime Brands

A-Score: 3.9/10

Value: 8.0

Growth: 2.2

Quality: 2.9

Yield: 6.0

Momentum: 2.0

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
MillerKnoll

A-Score: 3.8/10

Value: 6.7

Growth: 3.6

Quality: 2.4

Yield: 4.0

Momentum: 1.5

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Lovesac

A-Score: 3.7/10

Value: 7.4

Growth: 7.4

Quality: 4.0

Yield: 0.0

Momentum: 1.0

Volatility: 2.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

13.01$

Current Price

13.01$

Potential

-0.00%

Expected Cash-Flows