The Lovesac Company

First-quarter net sales were $138.2 million, down $0.2 million or 0.1% from the prior year period. Gross margin was 52.1%, down 160 basis points from 53.7%, driven mainly by higher inbound transportation and tariff costs and higher outbound transportation and warehousing costs, partly offset by product margin improvement. Operating loss was $17.4 million versus $15.0 million a year ago; net loss was $11.1 million, or negative $0.76 per share, versus a net loss of $10.8 million, or negative $0.73 per share. Adjusted EBITDA loss was $10.5 million versus $8.4 million in the prior-year quarter. Showroom net sales were $97.1 million, internet sales were $35.7 million, and other sales were $5.5 million. For the full year, management guided to net sales of $700 million-$740 million, adjusted EBITDA of $35 million-$46 million, gross margin of 56%-57%, advertising and marketing of about 12% of sales, SG&A of about 40%-41% of sales, net income of $5 million-$12 million, and diluted EPS of $0.34-$0.81. For Q2, guidance is net sales of $157 million-$166 million and adjusted EBITDA of negative $4 million to positive $2 million, with gross margin of 57.5%-58.5%.

Shawn Nelson framed the quarter as validation of Lovesac’s shift from a product company to a multi-platform, multi-room lifestyle brand. He emphasized that the company is building long-duration platforms, not chasing trend-driven merchandising, and said the brand, customer acquisition engine, and supply chain work are creating a stronger long-term setup. His tone was confident and expansive, especially around the planned living-room assortment expansion, the future new-room launch in calendar 2027, and domestic manufacturing as a strategic moat.

Keith Siegner focused on the financial bridge between demand, timing, and margin pressure. He noted the quarter’s gross margin decline to 52.1% was mainly from inbound transportation, tariffs, and outbound logistics, and said SG&A rose to 49.6% of sales due to higher payroll and overhead while advertising and marketing fell to $16.6 million, or 12.0% of sales, because of planned timing. On the balance sheet, he highlighted $57.0 million in cash and cash equivalents, $35 million of committed availability, no borrowings, and $2.4 million of share repurchases in the quarter, with about $51.7 million still remaining under authorization.

Analysts focused on three areas: agentic commerce, the demand split between transactions above and below $6,000, and tariff refunds. Management said it is investing in AI-readable content, structured data, and LLM-friendly site experiences, and is already seeing stronger share of voice on LLMs. On pricing mix, they said high-end transactions are strong while smaller-ticket demand remains soft, and they are actively testing promotions to improve opening price points. On tariffs, Keith said the company applied for $20.8 million of refunds, has received $3.4 million so far, and is only including amounts already received in guidance because timing remains uncertain.