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Highlights
LOVE's Q2 2026 net sales increased 2.5% year-over-year to USD 159.8 million, supported by new showrooms.
Q2 2026 net loss was USD 6.7 million, or USD (0.45) per share, compared to USD 5.9 million in Q2 2025.
Year-to-date operating loss narrowed to USD 23.8 million from USD 26.2 million in the prior-year period.
Lovesac Company (Nasdaq:LOVE), a home and technology brand best known for its modular couches, today reported financial results for the second quarter of fiscal 2026, which ended August 3, 2025. The company recorded higher sales but posted a wider net loss during the quarter, while reiterating full-year guidance.
Second Quarter Results
Net sales for Q2 2026 increased USD 3.9 million, or 2.5%, to USD 159.8 million compared with the prior-year quarter. The increase was primarily driven by a 0.9% growth in omni-channel comparable net sales and the net addition of 16 new showrooms, including 6 openings and 3 closures during the quarter.
Gross profit declined by USD 1.8 million, or 1.9%, year-over-year, while gross margin decreased 260 basis points to 56.4% from 59.0%. The margin contraction was attributed to higher inbound and outbound transportation costs and increased promotional discounting.
Selling, general and administrative (SG&A) expenses decreased by USD 1.6 million, or 2.1%, compared to the prior year. The reduction was mainly due to lower professional fees, credit card fees, and overhead costs, partly offset by payroll increases, equity-based compensation, rent, and impairment charges related to the termination of the Best Buy partnership.
Operating loss for the quarter was USD 8.8 million, compared with USD 8.4 million in the prior-year period. Operating margin stood at (5.5)% of net sales versus (5.3)% a year ago.
Net loss totaled USD 6.7 million, or USD (0.45) per share, compared with USD 5.9 million, or USD (0.38) per share, in Q2 2025. The company recorded an income tax benefit of USD 2.1 million, up from USD 1.8 million in the prior-year period, primarily due to a higher pre-tax net loss.
Year-to-Date Results
For the six-month period ended August 3, 2025, net sales rose USD 9.7 million, or 3.3%, to USD 302.1 million compared with the same period in fiscal 2025. Gross profit increased USD 0.6 million, while gross margin declined 160 basis points to 55.2% due to higher promotional discounting.
Operating loss for the year-to-date period narrowed to USD 23.8 million compared with USD 26.2 million in the prior year. Net loss stood at USD 17.5 million, or USD (1.19) per share, versus USD 18.8 million, or USD (1.21) per share, in the prior-year period.
Financial Position
As of August 3, 2025, cash and cash equivalents were USD 34.2 million, compared with USD 72.1 million at August 4, 2024. The company had no balance outstanding on its USD 36.0 million line of credit. Merchandise inventory was USD 124.0 million, up from USD 88.3 million in the prior year, primarily due to planned stock increases and higher freight capitalization.
Outlook
For the full fiscal year 2026, Lovesac projects:
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Net sales between USD 710 million and USD 740 million.
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Adjusted EBITDA between USD 42 million and USD 55 million.
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Net income between USD 8 million and USD 17 million.
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Diluted income per share between USD 0.52 and USD 1.05, based on 16.3 million diluted weighted average shares.
For the third quarter of fiscal 2026, the company expects net sales between USD 151 million and USD 161 million, an adjusted EBITDA loss between USD 1 million and USD 7 million, and a net loss between USD 8 million and USD 12 million, or USD (0.51) to USD (0.83) per share.
