The Lovesac Company reported third quarter fiscal 2025 financial results for the period ended November 3, 2024, on December 12, 2024, with net sales decreasing 2.7% year-over-year to $149.9 million, missing analyst consensus estimates of $155.264 million.
The decrease in net sales was primarily driven by an 8.3% decline in omni-channel comparable net sales, partially offset by the net addition of 28 new showrooms, bringing the total to 258 showrooms.
The company reported a net loss of $4.9 million, or $0.32 per diluted share, widening from a net loss of $2.3 million, or $0.15 per diluted share, in the prior year period, though the loss per share was narrower than the street view of $0.35 loss.
Gross margin increased by 110 basis points to 58.5%, primarily due to decreases in inbound transportation costs, partially offset by higher promotional discounting. Selling, General, and Administrative (SG&A) expenses increased by 6.1% due to investments in payroll, equity-based compensation, and rent, including a settlement with the SEC.
For the full fiscal year 2025, Lovesac lowered its guidance, projecting net sales between $660 million and $680 million, and diluted income per common share between $0.27 and $0.74. The company expects fourth quarter net sales in the range of $221 million to $241 million.
The company noted that near-term headwinds for the category persisted through the pre-election period but expressed confidence in long-term value creation through product innovation, such as the soft launch of the Reclining Seat.
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