The Lovesac Company Reports Second Quarter Fiscal 2025 Financial Results
The Lovesac Company (LOVE) reported Q2 FY25 financial results with net sales growth of 1.3% to $156.6 million. Key highlights include:
- Gross profit remained flat at $92.4 million, with gross margin decreasing 80 bps to 59.0%
- SG&A expenses increased 15.4% to $73.7 million
- Net loss widened to $5.9 million or $(0.38) per share
- Opened 10 new showrooms and closed 2, ending with 254 total
For full year FY25, Lovesac expects:
- Net sales of $700-$735 million
- Adjusted EBITDA of $52-$59 million
- Net income of $17-$21 million
- Diluted EPS of $1.01-$1.26
The company cited challenging industry conditions but noted positive reception to new product innovations like the PillowSac Accent Chair and AnyTable launch.
Lovesac Company (LOVE) ha riportato i risultati finanziari del Q2 FY25 con una crescita delle vendite nette dell'1,3% raggiungendo i 156,6 milioni di dollari. I punti salienti includono:
- Il profitto lordo è rimasto stabile a 92,4 milioni di dollari, con un margine lordo in calo di 80 punti base al 59,0%
- Le spese SG&A sono aumentate del 15,4% raggiungendo 73,7 milioni di dollari
- La perdita netta si è ampliata a 5,9 milioni di dollari, ovvero $(0,38) per azione
- Sono stati aperti 10 nuovi showroom e chiusi 2, per un totale di 254
Per l'intero anno FY25, Lovesac prevede:
- Vendite nette tra 700 e 735 milioni di dollari
- EBITDA rettificato tra 52 e 59 milioni di dollari
- Reddito netto tra 17 e 21 milioni di dollari
- EPS diluito tra 1,01 e 1,26 dollari
La società ha citato condizioni di mercato difficili, ma ha notato una ricezione positiva per le innovazioni di prodotto come la PillowSac Accent Chair e il lancio di AnyTable.
La empresa Lovesac (LOVE) ha informado los resultados financieros del Q2 FY25 con un crecimiento en ventas netas del 1.3% alcanzando los 156.6 millones de dólares. Los puntos destacados incluyen:
- La ganancia bruta se mantuvo constante en 92.4 millones de dólares, con un margen bruto que disminuyó 80 puntos básicos al 59.0%
- Los gastos SG&A aumentaron un 15.4% hasta 73.7 millones de dólares
- La pérdida neta se amplió a 5.9 millones de dólares o $(0.38) por acción
- Se abrieron 10 nuevos showrooms y se cerraron 2, finalizando con un total de 254
Para el año completo FY25, Lovesac espera:
- Ventas netas de entre 700 y 735 millones de dólares
- EBITDA ajustado de entre 52 y 59 millones de dólares
- Ingreso neto de entre 17 y 21 millones de dólares
- EPS diluido de entre 1.01 y 1.26 dólares
La empresa citó condiciones desafiantes en la industria, pero destacó la recepción positiva a las innovaciones de productos como la PillowSac Accent Chair y el lanzamiento de AnyTable.
러브삭 컴퍼니(LoveSac Company, LOVE)는 FY25 2분기 재무 결과를 보고하며 순매출이 1.3% 성장하여 1억 5천 6백만 달러에 이르렀습니다. 주요 하이라이트는 다음과 같습니다:
- 총 이익은 9천 2백 40만 달러로 변동 없이 유지되었으며, 총 이익률은 80bp 감소하여 59.0%로 집계되었습니다.
- SG&A 비용은 15.4% 증가하여 7천 3백 70만 달러에 이르렀습니다.
- 순손실은 5.9백만 달러 또는 주당 $(0.38)로 확대되었습니다.
- 10개의 새로운 쇼룸을 열고 2개를 닫아 총 254개로 종료했습니다.
FY25 전체 연도에 대해 러브삭은 다음을 기대하고 있습니다:
- 7억에서 7억 3천 5백만 달러의 순매출
- 5천 2백만에서 5천 9백만 달러의 조정된 EBITDA
- 1천 7백만에서 2천 1백만 달러의 순이익
- 희석된 EPS가 1.01에서 1.26 달러 사이
회사는 산업 조건이 도전적이라고 언급했지만, PillowSac Accent Chair와 AnyTable 출시와 같은 새로운 제품 혁신에 대한 긍정적인 반응을 언급했습니다.
La société Lovesac (LOVE) a rapporté les résultats financiers du 2ème trimestre de l'exercice 25 avec une croissance des ventes nettes de 1,3% à 156,6 millions de dollars. Les points saillants incluent :
- Le bénéfice brut est resté stable à 92,4 millions de dollars, avec une marge brute en baisse de 80 points de base à 59,0%
- Les dépenses SG&A ont augmenté de 15,4% à 73,7 millions de dollars
- La perte nette s'est élargie à 5,9 millions de dollars ou $(0,38) par action
- 10 nouveaux showrooms ont été ouverts et 2 fermés, pour un total de 254
Pour l'année entière FY25, Lovesac s'attend à :
- Des ventes nettes entre 700 et 735 millions de dollars
- Un EBITDA ajusté entre 52 et 59 millions de dollars
- Un revenu net entre 17 et 21 millions de dollars
- Un bénéfice par action dilué entre 1,01 et 1,26 dollars
La société a cité des conditions industrielles difficiles mais a noté une réception positive aux nouvelles innovations de produits telles que le PillowSac Accent Chair et le lancement de l'AnyTable.
Die Lovesac Company (LOVE) hat die finanziellen Ergebnisse für das 2. Quartal FY25 veröffentlicht und einen Anstieg der Nettoumsätze um 1,3% auf 156,6 Millionen Dollar gemeldet. Die wichtigsten Highlights umfassen:
- Der Bruttogewinn blieb mit 92,4 Millionen Dollar stabil, während die Bruttomarge um 80 Basispunkte auf 59,0% zurückging.
- Die SG&A-Ausgaben stiegen um 15,4% auf 73,7 Millionen Dollar.
- Der Nettoverlust erweiterte sich auf 5,9 Millionen Dollar oder $(0,38) pro Aktie.
- Es wurden 10 neue Showrooms eröffnet und 2 geschlossen, womit insgesamt 254 erreicht wurden.
Für das gesamte Jahr FY25 erwartet Lovesac:
- Nettoumsätze zwischen 700 und 735 Millionen Dollar
- Bereinigtes EBITDA zwischen 52 und 59 Millionen Dollar
- Nettogewinn zwischen 17 und 21 Millionen Dollar
- Verwässertes EPS zwischen 1,01 und 1,26 Dollar
Das Unternehmen verwies auf herausfordernde Branchenbedingungen, stellte jedoch eine positive Resonanz auf neue Produktinnovationen wie den PillowSac Accent Chair und den Launch von AnyTable fest.
- Net sales increased 1.3% year-over-year to $156.6 million
- Opened 10 new showrooms, expanding retail presence
- Internet sales grew 7.0% compared to prior year quarter
- Positive reception to new product innovations like PillowSac Accent Chair and AnyTable
- Full year guidance projects net income of $17-$21 million and positive adjusted EBITDA
- Net loss widened to $5.9 million from $0.6 million in prior year quarter
- Gross margin decreased 80 basis points to 59.0%
- SG&A expenses increased 15.4% to $73.7 million
- Operating loss expanded to $8.4 million from $1.0 million last year
- Omni-channel comparable net sales decreased 5.4%
Insights
The Lovesac Company's Q2 FY25 results show mixed performance. While net sales grew
The company's SG&A expenses increased substantially by
Looking ahead, Lovesac's full-year guidance suggests a potential turnaround, with projected net income of
Lovesac's performance reflects broader challenges in the home furnishing industry. The company's modest sales growth of
The introduction of new products like the PillowSac Accent Chair and AnyTable demonstrates Lovesac's commitment to innovation and product diversification. This strategy could help differentiate the brand and drive future growth, especially important given the current industry headwinds.
The expansion of showrooms (net addition of 31 new locations) indicates confidence in the brick-and-mortar retail model, even as e-commerce sales grew
Lovesac's Q2 results highlight the delicate balance between growth and profitability in the current retail landscape. The company's strategy of expanding its physical presence through new showrooms is counter to many retailers' shift towards e-commerce. While this approach supports brand experience and customer engagement, it also increases fixed costs and may pressure margins in the short term.
The reduction in advertising spend by
The company's inventory management appears strong, with a significant reduction from
Q2 FY25 Net Sales growth of
STAMFORD, Conn., Sept. 12, 2024 (GLOBE NEWSWIRE) -- The Lovesac Company (Nasdaq: LOVE) (“Lovesac” or the “Company”), the home furnishing brand best known for its Sactionals, The World's Most Adaptable Couch, today announced financial results for the second quarter of fiscal 2025, which ended August 4, 2024.
Shawn Nelson, Chief Executive Officer, stated, “Our second quarter results were inline with our expectations as we continued to drive market share gains amidst a challenging industry backdrop. We are pleased with the incredible reception we have seen with the product innovation we have delivered recently through our PillowSac Accent Chair as well as our newly launched AnyTable. We are excited to continue to build on the momentum we are driving through expanding our offering, and while we are prudently planning for the second half of the year given the category headwinds, we believe we are well positioned to deliver on our objectives for both the near- and long-term.”
Key Measures for the Second Quarter and First Half of Fiscal 2025 Ending August 4, 2024:
(Dollars in millions, except per share amounts. Dollar and percentage changes may not recalculate due to rounding.)
| Thirteen weeks ended | Twenty-six weeks ended | |||||||||||||
| August 4, 2024 | July 30, 2023 | % Inc (Dec) | August 4, 2024 | July 30, 2023 | % Inc (Dec) | |||||||||
| Net sales | ||||||||||||||
| Showrooms | 0.6% | (0.8%) | ||||||||||||
| Internet | 7.0% | (0.9%) | ||||||||||||
| Other | (9.3%) | (13.5%) | ||||||||||||
| Total net sales | 1.3% | (2.2%) | ||||||||||||
| Gross profit | —% | 0.9% | ||||||||||||
| Gross margin | 59.0% | 59.8% | (80) bps | 56.8% | 55.1% | 170 bps | ||||||||
| Total operating expenses | 7.9% | 12.4% | ||||||||||||
| SG&A | 15.4% | 18.0% | ||||||||||||
| SG&A as a % of Net Sales | 47.0% | 41.3% | 570 bps | 49.1% | 40.7% | 840 bps | ||||||||
| Advertising and marketing | (12.2%) | (4.9%) | ||||||||||||
| Advertising & marketing as a % of Net Sales | 14.9% | 17.2% | (230) bps | 14.3% | 14.7% | (40) bps | ||||||||
| Net loss | (823.0%) | (296.2%) | ||||||||||||
| Basic net loss per common share | (850.0%) | (290.3%) | ||||||||||||
| Diluted net loss per common share | (850.0%) | (290.3%) | ||||||||||||
| Adjusted EBITDA 1 | (71.7%) | (373.5%) | ||||||||||||
| Net cash provided by (used in) operating activities | (70.6%) | (103.0%) | ||||||||||||
1 Adjusted EBITDA is a non-GAAP measure. See “Non-GAAP Information” and “Reconciliation of Non-GAAP Financial Measures” included in this press release.
| Percent increase (decrease) except showroom count | |||||||||
| Thirteen weeks ended | Twenty-six weeks ended | ||||||||
| August 4, 2024 | July 30, 2023 | August 4, 2024 | July 30, 2023 | ||||||
| Omni-channel Comparable Net Sales(1) | (5.4)% | (5.8)% | (10.0)% | (6.2)% | |||||
| Internet Sales | (0.9)% | ||||||||
| Ending Showroom Count | 254 | 223 | 254 | 223 | |||||
1 Omni-channel Comparable Net Sales includes sales at all retail locations and online, open greater than 12 months (including remodels and relocations) and excludes closed stores.
Highlights for the Quarter Ended August 4, 2024:
- Net sales increased
$2.1 million , or1.3% , in the second quarter of fiscal 2025 compared to the prior year period primarily driven by the net addition of 31 new showrooms, partially offset by a decrease of5.4% in omni-channel comparable net sales. During the second quarter of fiscal 2025, we opened 10 additional showrooms and closed 2 showrooms. - Gross profit remained flat in the second quarter of fiscal 2025 compared to the prior year period. Gross margin decreased 80 basis points to
59.0% of net sales in the second quarter of fiscal 2025 from59.8% of net sales in the prior year period primarily driven by a decrease of 110 basis points in product margin driven by higher promotional discounting and an increase of 50 basis points in outbound transportation and warehousing costs, partially offset by a decrease of 80 basis points in inbound transportation costs. - SG&A expense increased
$9.9 million , or15.4% , in the second quarter of fiscal 2025 compared to the prior year period due to investments in payroll, equity-based compensation, professional fees, rent, and infrastructure. - Advertising and marketing expense decreased
$3.2 million , or12.2% in the second quarter of fiscal 2025 compared to the prior year period primarily due to costs related to our 25th anniversary campaign in FY24 not repeating in FY25. - Operating loss was
$8.4 million in the second quarter of fiscal 2025 compared to$1.0 million in the prior year period. Operating margin was (5.3)% of net sales in the second quarter of fiscal 2025 compared to (0.7)% of net sales in the prior year period. - Net loss was
$5.9 million in the second quarter of fiscal 2025 or$(0.38) net loss per common share compared to$0.6 million or$(0.04) net loss per common share in the prior year period. During the second quarter of fiscal 2025, the Company recorded an income tax benefit of$1.8 million , compared to less than$0.1 million in the prior year period. The change in benefit is primarily driven by higher net loss before taxes and an increase in the effective tax rate.
Highlights for the Year-to-date Period Ended August 4, 2024:
- Net sales decreased
$6.5 million , or2.2% , in the first half of fiscal 2025 compared to the prior year period primarily driven by a decrease of10.0% in omni-channel comparable net sales, partially offset by the net addition of 31 new showrooms compared to the prior year period. - Gross profit increased
$1.4 million , or0.9% , in the first half of fiscal 2025 compared to the prior year period. Gross margin increased 170 basis points to56.8% of net sales in the first half of fiscal 2025 from55.1% of net sales in the prior year period primarily driven by a decrease of 420 basis points in inbound transportation costs, partially offset by an increase of 130 basis points in outbound transportation and warehousing costs and a decrease of 120 basis points in product margin driven by higher promotional discounting. - SG&A expense increased
$21.7 million , or18.0% , in the first half of fiscal 2025 compared to the prior year period due to investments in payroll, professional fees, equity-based compensation, infrastructure, and rent. - Advertising and marketing expense decreased
$2.1 million , or4.9% in the first half of fiscal 2025 compared to the prior year period primarily due to costs related to our 25th anniversary campaign in FY24 not repeating in FY25. - Operating loss was
$26.2 million in the first half of fiscal 2025 compared to$6.7 million in the prior year period. Operating margin was (9.1)% of net sales in the first half of fiscal 2025 compared to (2.3)% of net sales in the prior year period. - Net loss was
$18.8 million in the first half of fiscal 2025 or$(1.21) net loss per diluted share compared to$4.8 million or$(0.31) net loss per diluted share in the prior year period. During the first half of fiscal 2025, the Company recorded an income tax benefit of$6.0 million , compared to$1.3 million for the prior year period. The change in benefit is primarily driven by higher net loss before taxes and an increase in the effective tax rate.
Other Financial Highlights as of August 4, 2024:
- The cash and cash equivalents balance as of August 4, 2024 was
$72.1 million as compared to$54.7 million as of July 30, 2023. There was no balance on the Company’s line of credit as of August 4, 2024 and July 30, 2023. The Company’s availability under the line of credit was$36.0 million as of August 4, 2024 and July 30, 2023. As previously announced, on July 29, 2024, we amended the credit agreement to add an uncommitted accordion feature that allows the Company, subject to certain customary conditions, to increase the size of the revolving credit facility by$10 million and, among other things, extend the maturity date of the loans made under the Amendment from September 30, 2024 to July 29, 2029. - Total merchandise inventory was
$88.3 million as of August 4, 2024 as compared to$105.0 million as of July 30, 2023 principally related to a planned stock inventory decrease of$14.1 million coupled with a decrease in freight capitalization of$3.5 million related to the decrease in inbound freight expense.
Outlook:
The Company provides guidance of select information related to the Company’s financial and operating performance, and such measures may differ from year to year. The projections are as of this date and the Company assumes no obligation to update or supplement this information.
The Company expects the following for the full year of fiscal 2025:
- Net sales in the range of
$700 million to$735 million . - Adjusted EBITDA1 in the range of
$52 million to$59 million . - Net income in the range of
$17 million to$21 million . - Diluted income per common share in the range of
$1.01 t o$1.26 on approximately 16.9 million estimated diluted weighted average shares outstanding. - Fiscal 2025 will contain 52 weeks versus Fiscal 2024 which contained an additional “53rd week” in the fourth quarter.
The Company currently expects the following for the third quarter of fiscal 2025:
- Net sales in the range of
$152 million to$160 million . - Adjusted EBITDA1 in the range of a loss of
$3 million to income of$1 million . - Net loss in the range of
$4 million to$8 million . - Basic loss per common share in the range of
$0.28 t o$0.50 on approximately 15.6 million estimated weighted average shares outstanding.
1 Adjusted EBITDA is a non-GAAP measure. See “Non-GAAP Information” and “Reconciliation of Non-GAAP Financial Measures” included in this press release.
Conference Call Information:
A conference call to discuss the financial results for the second quarter ended August 4, 2024 is scheduled for today, September 12, 2024, at 8:30 a.m. Eastern Time. Investors and analysts interested in participating in the call are invited to dial (877) 407-3982 (international callers please dial (201) 493-6780) approximately 10 minutes prior to the start of the call. A live audio webcast of the conference call will be available online at investor.lovesac.com.
A recorded replay of the conference call will be available within two hours of the conclusion of the call and can be accessed online at investor.lovesac.com for 90 days.
About The Lovesac Company:
Based in Stamford, Connecticut, The Lovesac Company is a technology driven company that designs, manufactures and sells unique, high quality furniture derived through its proprietary Designed For Life approach which results in products that are built to last a lifetime and designed to evolve as our customers’ lives do. Our current product offering is comprised of modular couches called Sactionals, premium foam beanbag chairs called Sacs, and their associated home decor accessories. Innovation is at the center of our design philosophy with all of our core products protected by a robust portfolio of utility patents. We market and sell our products primarily online directly at www.lovesac.com, supported by direct-to-consumer touch-feel points in the form of our own showrooms as well as through shop-in-shops and pop-up-shops with third party retailers. LOVESAC, SACTIONALS, DESIGNED FOR LIFE, ANYTABLE, and THE WORLD'S MOST ADAPTABLE COUCH are trademarks of The Lovesac Company and are Registered in the U.S. Patent and Trademark Office.
Non-GAAP Information:
Adjusted EBITDA is defined as a non-GAAP financial measure by the Securities and Exchange Commission (the “SEC”) that is a supplemental measure of financial performance not required by, or presented in accordance with, GAAP. We define “Adjusted EBITDA” as earnings before interest, taxes, depreciation and amortization, adjusted for the impact of certain non-cash and other items that we do not consider in our evaluation of ongoing operating performance. These items include management fees, equity-based compensation expense, write-offs of property and equipment, deferred rent, financing expenses and certain other charges and gains that we do not believe reflect our underlying business performance. We have reconciled this non-GAAP financial measure with the most directly comparable GAAP financial measure within the schedules attached hereto. Statements regarding our expectations as to fiscal 2025 Adjusted EBITDA do not include certain charges and costs. These items include equity-based compensation expense and certain other charges and gains that we do not believe reflect our underlying business performance. We are not able to provide a reconciliation of our non-GAAP financial guidance to the corresponding GAAP measures without unreasonable effort because of the uncertainty and variability of the nature and amount of these future charges and costs. This is due to the inherent difficulty of forecasting the timing of certain events that have not yet occurred and are out of the Company’s control.
We believe that these non-GAAP financial measures not only provide its management with comparable financial data for internal financial analysis but also provide meaningful supplemental information to investors. Specifically, these non-GAAP financial measures allow investors to better understand the performance of our business, facilitate a more meaningful comparison of our actual results on a period-over-period basis and provide for a more complete understanding of factors and trends affecting our business. We have provided this information as a means to evaluate the results of our ongoing operations alongside GAAP measures such as gross profit, operating income (loss) and net income (loss). Other companies in our industry may calculate these items differently than we do. These non-GAAP measures should not be considered as a substitute for the most directly comparable financial measures prepared in accordance with GAAP, such as net income (loss) or net income (loss) per share as a measure of financial performance, cash flows from operating activities as a measure of liquidity, or any other performance measure derived in accordance with GAAP. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company’s results as reported under GAAP.
Cautionary Statement Concerning Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other legal authority. Forward-looking statements can be identified by words such as “may,” “continue(s),” “believe,” “anticipate,” “could,” “should,” “intend,” “plan,” “will,” “aim(s),” “can,” “would,” “expect(s),” “expectation(s),” “estimate(s),” “project(s),” “forecast(s)”, “positioned,” “approximately,” “potential,” “goal,” “pro forma,” “strategy,” “outlook” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. All statements, other than statements of historical facts, included in this press release under the heading “Outlook” and all statements regarding strategy, future operations and launch of new products, the pace and success of new products, future financial position or projections, future revenue, projected expenses, sustainability goals, prospects, plans and objectives of management are forward-looking statements. These statements are based on management’s current expectations, beliefs and assumptions concerning the future of our business, anticipated events and trends, the economy and other future conditions. We may not actually achieve the plans, carry out the intentions or meet the expectations disclosed in the forward-looking statements and you should not rely on these forward-looking statements. Actual results and performance could differ materially from those projected in the forward-looking statements as a result of many factors. Among the key factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements include: business disruptions or other consequences of economic instability, political instability, civil unrest, armed hostilities, natural and man-made disasters, pandemics or other public health crises, or other catastrophic events; the impact of changes or declines in consumer spending and increases in interest rates and inflation on our business, sales, results of operations and financial condition; our ability to manage and sustain our growth and profitability effectively, including in our ecommerce business, forecast our operating results, and manage inventory levels; our ability to improve our products and develop and launch new products; our ability to successfully open and operate new showrooms; our ability to advance, implement or achieve the goals set forth in our ESG Report; our ability to realize the expected benefits of investments in our supply chain and infrastructure; disruption in our supply chain and dependence on foreign manufacturing and imports for our products; execution of our share purchase program and its expected benefits for enhancing long-term shareholder value; our ability to acquire new customers and engage existing customers; reputational risk associated with increased use of social media; our ability to attract, develop and retain highly skilled associates and employees; system interruption or failures in our technology infrastructure needed to service our customers, process transactions and fulfill orders; any inability to implement and maintain effective internal control over financial reporting or inability to remediate any internal controls deemed ineffective; the impact of the restatement of our previously issued audited financial statements as of and for the year ended January 29, 2023 and our unaudited condensed financial statements for the quarterly periods ended April 30, 2023, October 30, 2022, July 31, 2022 and May 1, 2022, and the related litigation and investigation related to such restatements; unauthorized disclosure of sensitive or confidential information through breach of our computer system; the ability of third-party providers to continue uninterrupted service; the impact of tariffs, and the countermeasures and tariff mitigation initiatives; the regulatory environment in which we operate, our ability to maintain, grow and enforce our brand and intellectual property rights and avoid infringement or violation of the intellectual property rights of others; and our ability to compete and succeed in a highly competitive and evolving industry, as well as those risks and uncertainties disclosed under the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Form 10-K and in our Form 10-Qs filed with the Securities and Exchange Commission, and similar disclosures in subsequent reports filed with the SEC, which are available on our investor relations website at investor.lovesac.com and on the SEC website at www.sec.gov. Any forward-looking statement made by us in this press release speaks only as of the date on which we make it. We disclaim any intent or obligation to update these forward-looking statements to reflect events or circumstances that exist after the date on which they were made.
Investor Relations Contact:
Caitlin Churchill, ICR
(203) 682-8200
InvestorRelations@lovesac.com
| THE LOVESAC COMPANY CONDENSED BALANCE SHEETS (unaudited) | ||||||
| (amounts in thousands, except share and per share amounts) | August 4, 2024 | February 4, 2024 | ||||
| Assets | ||||||
| Current Assets | ||||||
| Cash and cash equivalents | $ | 72,126 | $ | 87,036 | ||
| Trade accounts receivable, net | 14,787 | 13,463 | ||||
| Merchandise inventories, net | 88,287 | 98,440 | ||||
| Prepaid expenses | 15,281 | 11,664 | ||||
| Other current assets | 3,677 | 3,845 | ||||
| Total Current Assets | 194,158 | 214,448 | ||||
| Property and equipment, net | 77,012 | 70,807 | ||||
| Operating lease right-of-use assets | 159,131 | 155,856 | ||||
| Goodwill | 144 | 144 | ||||
| Intangible assets, net | 1,428 | 1,457 | ||||
| Deferred tax asset | 16,885 | 10,803 | ||||
| Other assets | 32,317 | 28,665 | ||||
| Total Assets | $ | 481,075 | $ | 482,180 | ||
| Liabilities and Stockholders' Equity | ||||||
| Current Liabilities | ||||||
| Accounts payable | $ | 28,524 | $ | 28,821 | ||
| Accrued expenses | 35,838 | 38,622 | ||||
| Payroll payable | 10,694 | 6,998 | ||||
| Customer deposits | 15,297 | 8,257 | ||||
| Current operating lease liabilities | 19,011 | 17,628 | ||||
| Sales taxes payable | 5,712 | 6,030 | ||||
| Total Current Liabilities | 115,076 | 106,356 | ||||
| Operating lease liabilities, long-term | 163,405 | 157,876 | ||||
| Income tax payable, long-term | 452 | 452 | ||||
| Line of credit | — | — | ||||
| Total Liabilities | 278,933 | 264,684 | ||||
| Commitments and Contingencies | ||||||
| Stockholders’ Equity | ||||||
| Preferred Stock | — | — | ||||
| Common Stock | — | — | ||||
| Additional paid-in capital | 186,562 | 183,095 | ||||
| Accumulated earnings | 15,580 | 34,401 | ||||
| Stockholders' Equity | 202,142 | 217,496 | ||||
| Total Liabilities and Stockholders' Equity | $ | 481,075 | $ | 482,180 | ||
| THE LOVESAC COMPANY CONDENSED STATEMENTS OF OPERATIONS (unaudited) | ||||||||||||||||
| Thirteen weeks ended | Twenty-six weeks ended | |||||||||||||||
| (amounts in thousands, except per share data and share amounts) | August 4, 2024 | July 30, 2023 | August 4, 2024 | July 30, 2023 | ||||||||||||
| Net sales | $ | 156,590 | $ | 154,529 | $ | 289,233 | $ | 295,722 | ||||||||
| Cost of merchandise sold | 64,221 | 62,139 | 124,819 | 132,757 | ||||||||||||
| Gross profit | 92,369 | 92,390 | 164,414 | 162,965 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, general and administration expenses | 73,674 | 63,834 | 142,077 | 120,380 | ||||||||||||
| Advertising and marketing | 23,310 | 26,535 | 41,306 | 43,448 | ||||||||||||
| Depreciation and amortization | 3,756 | 3,014 | 7,258 | 5,836 | ||||||||||||
| Total operating expenses | 100,740 | 93,383 | 190,641 | 169,664 | ||||||||||||
| Operating loss | (8,371 | ) | (993 | ) | (26,227 | ) | (6,699 | ) | ||||||||
| Interest income, net | 694 | 351 | 1,438 | 692 | ||||||||||||
| Net loss before taxes | (7,677 | ) | (642 | ) | (24,789 | ) | (6,007 | ) | ||||||||
| Benefit from income taxes | 1,816 | 7 | 5,968 | 1,257 | ||||||||||||
| Net loss | $ | (5,861 | ) | $ | (635 | ) | $ | (18,821 | ) | $ | (4,750 | ) | ||||
| Net loss per common share: | ||||||||||||||||
| Basic | $ | (0.38 | ) | $ | (0.04 | ) | $ | (1.21 | ) | $ | (0.31 | ) | ||||
| Diluted | $ | (0.38 | ) | $ | (0.04 | ) | $ | (1.21 | ) | $ | (0.31 | ) | ||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 15,590,207 | 15,422,640 | 15,564,016 | 15,326,702 | ||||||||||||
| Diluted | 15,590,207 | 15,422,640 | 15,564,016 | 15,326,702 | ||||||||||||
| THE LOVESAC COMPANY CONDENSED STATEMENT OF CASH FLOWS (unaudited) | ||||||||
| Twenty-six weeks ended | ||||||||
| (amounts in thousands) | August 4, 2024 | July 30, 2023 | ||||||
| Cash Flows from Operating Activities | ||||||||
| Net loss | $ | (18,821 | ) | $ | (4,750 | ) | ||
| Adjustments to reconcile net loss to cash (used in) provided by operating activities: | ||||||||
| Depreciation and amortization of property and equipment | 7,038 | 5,608 | ||||||
| Amortization of other intangible assets | 220 | 228 | ||||||
| Amortization of deferred financing fees | 97 | 81 | ||||||
| Net loss on disposal of property and equipment | 62 | 145 | ||||||
| Equity based compensation | 3,904 | 2,037 | ||||||
| Non-cash lease expense | 12,355 | 10,880 | ||||||
| Deferred income taxes | (6,082 | ) | (1,398 | ) | ||||
| Change in operating assets and liabilities: | ||||||||
| Trade accounts receivable | (1,324 | ) | 1,109 | |||||
| Merchandise inventories | 10,153 | 14,657 | ||||||
| Prepaid expenses and other current assets | (3,406 | ) | (524 | ) | ||||
| Other assets | (3,652 | ) | (3,518 | ) | ||||
| Accounts payable and accrued expenses | 303 | 3,087 | ||||||
| Operating lease liabilities | (8,718 | ) | (5,817 | ) | ||||
| Customer deposits | 7,040 | 5,519 | ||||||
| Net cash (used in) provided by operating activities | (831 | ) | 27,344 | |||||
| Cash Flows from Investing Activities | ||||||||
| Purchase of property and equipment | (13,360 | ) | (12,361 | ) | ||||
| Payments for patents and trademarks | (142 | ) | (160 | ) | ||||
| Net cash used in investing activities | (13,502 | ) | (12,521 | ) | ||||
| Cash Flows from Financing Activities | ||||||||
| Taxes paid for net share settlement of equity awards | (437 | ) | (3,588 | ) | ||||
| Payment of deferred financing costs | (140 | ) | (52 | ) | ||||
| Net cash used in financing activities | (577 | ) | (3,640 | ) | ||||
| Net change in cash and cash equivalents | (14,910 | ) | 11,183 | |||||
| Cash and cash equivalents - Beginning | 87,036 | 43,533 | ||||||
| Cash and cash equivalents - Ending | $ | 72,126 | $ | 54,716 | ||||
| Supplemental Cash Flow Data: | ||||||||
| Cash paid for taxes | $ | 8,354 | $ | 1,232 | ||||
| Cash paid for interest | $ | 61 | $ | 66 | ||||
| Non-cash investing activities: | ||||||||
| Asset acquisitions not yet paid for at period end | $ | 589 | $ | 3,698 | ||||
| THE LOVESAC COMPANY RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited) | ||||||||||||||||
| Thirteen weeks ended | Twenty-six weeks ended | |||||||||||||||
| (amounts in thousands) | August 4, 2024 | July 30, 2023 | August 4, 2024 | July 30, 2023 | ||||||||||||
| Net loss | $ | (5,861 | ) | $ | (635 | ) | $ | (18,821 | ) | $ | (4,750 | ) | ||||
| Interest income, net | (694 | ) | (351 | ) | (1,438 | ) | (692 | ) | ||||||||
| Income tax benefit | (1,816 | ) | (7 | ) | (5,968 | ) | (1,257 | ) | ||||||||
| Depreciation and amortization | 3,756 | 3,014 | 7,258 | 5,836 | ||||||||||||
| EBITDA | (4,615 | ) | 2,021 | (18,969 | ) | (863 | ) | |||||||||
| Equity-based compensation (a) | 2,760 | 1,467 | 3,963 | 2,272 | ||||||||||||
| Loss on disposal of assets (b) | 19 | 145 | 62 | 145 | ||||||||||||
| Other non-recurring expenses (c) | 3,332 | 1,650 | 6,182 | 1,650 | ||||||||||||
| Adjusted EBITDA | $ | 1,496 | $ | 5,283 | $ | (8,762 | ) | $ | 3,204 | |||||||
(a) Represents expenses, such as compensation expense and employer taxes related to RSU equity vesting and exercises associated with stock options and restricted stock units granted to our associates and board of directors. Employer taxes are included as part of selling, general and administrative expenses on the Statements of Operations.
(b) Represents loss on disposal of property and equipment.
(c) Other non-recurring expenses in the thirteen weeks ended August 4, 2024 represents professional fees related to the restatement of previously issued financial statements, expenses associated with other legal matters, and one-time pre-production costs, partially offset by benefits related to insurance proceeds. Other non-recurring expenses in the twenty-six weeks ended August 4, 2024 also includes severance. Other non-recurring expenses in the thirteen and twenty-six weeks ended July 30, 2023 represents professional fees related to the restatement of previously issued financial statements.
FAQ
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