STAMFORD, Conn. - The Lovesac Company (NASDAQ: NASDAQ:LOVE), a home furnishing brand renowned for its adaptable Sactionals, reported a narrower-than-expected loss for the first quarter of fiscal 2025.
The company's adjusted net loss per share of -$0.83 outperformed analysts' predictions of -$0.95. Lovesac's revenue for the quarter also surpassed consensus estimates, coming in at $132.6 million against an expected $128.08 million.
Despite the positive financial results, Lovesac's shares dipped slightly by 1.8%.
CEO Shawn Nelson commented on the results, "We are pleased to deliver first quarter performance inline to slightly above the high end of our expectations. Our results reflect continued outperformance compared to the industry and demonstrate our commitment to executing against our objectives."
In comparison to the same quarter last year, Lovesac's net sales saw a decrease of 6.1%. The decline was primarily attributed to a 14.8% drop in omni-channel comparable net sales, partially offset by the opening of 24 new showrooms. Gross profit, however, experienced a 2.1% increase, and gross margin improved by 430 basis points to 54.3% of net sales, thanks to a significant reduction in inbound transportation costs.
Looking ahead, Lovesac reaffirmed its full-year fiscal 2025 outlook, expecting net sales to range between $700 million to $770 million, with adjusted EBITDA projected between $46 million to $60 million. The company forecasts a net income of $18 million to $27 million, translating to diluted earnings per share of $1.06 to $1.59. These figures compare favorably to the analyst consensus of $1.23 for EPS and $715 million for revenue.
For the second quarter of fiscal 2025, Lovesac anticipates net sales to be between $152 million to $160 million, with an adjusted EBITDA loss of $2 million to $5 million. The projected net loss per share is expected to be between -$0.37 to -$0.53, which is notably below the consensus estimate of -$0.07.
The company's financial stability is underscored by a cash and cash equivalents balance of $72.4 million as of May 5, 2024, and no outstanding balance on its line of credit. Lovesac's inventory management also reflects a strategic reduction, with total merchandise inventory valued at $94.7 million, down from $104.5 million as of the previous year.
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