LOVE Q4 Earnings: New Product Launches and Supply Chain Flexibility Drive Outperformance
Furniture company Lovesac (NASDAQ:LOVE) reported Q4 CY2024 results topping the market's revenue expectations , but sales fell by 3.6% year on year to $241.5 million. Guidance for next quarter's revenue was better than expected at $139 million at the midpoint, 1.4% above analysts' estimates. Its GAAP profit of $2.13 per share was 13.6% above analysts' consensus estimates.
Is now the time to buy LOVE?
Revenue: $241.5 million vs analyst estimates of $230.2 million (3.6% year-on-year decline, 4.9% beat)
EPS (GAAP): $2.13 vs analyst estimates of $1.87 (13.6% beat)
Adjusted EBITDA: $53.87 million vs analyst estimates of $48.23 million (22.3% margin, 11.7% beat)
Management's revenue guidance for the upcoming financial year 2026 is $725 million at the midpoint, beating analyst estimates by 1.7% and implying 6.5% growth (vs -2.8% in FY2025)
EPS (GAAP) guidance for the upcoming financial year 2026 is $1.08 at the midpoint, missing analyst estimates by 2.5%
EBITDA guidance for the upcoming financial year 2026 is $54 million at the midpoint, above analyst estimates of $46.3 million
Operating Margin: 19.7%, up from 16.1% in the same quarter last year
Free Cash Flow Margin: 16%, down from 19.8% in the same quarter last year
Locations: 257 at quarter end, up from 230 in the same quarter last year
Market Capitalization: $298.8 million
Lovesac's fourth quarter results were shaped by significant momentum in new product introductions and enhancements to its omnichannel model, as highlighted by CEO Shawn Nelson. Management pointed to the launch of the Reclining Seat and the expansion of the company's supply chain flexibility as pivotal contributors to the quarter's sales performance. Nelson remarked, 'We have step changed the metabolic rate of new product and platform launches at Lovesac,' emphasizing the focus on product innovation and operational adaptability despite ongoing macroeconomic headwinds.
Looking ahead, the company's guidance was influenced by continued investments in product development and a robust pipeline, including the upcoming launch of EverCouch and new strategies in customer acquisition. CFO Keith Siegner noted that while the broader home furnishings category remains challenging, Lovesac's diversified sourcing and healthy inventory levels position it to manage tariff risks and capitalize on any rebound in demand. Management underscored their preparedness to adjust pricing and promotional strategies should new tariffs persist, while also highlighting ongoing showroom expansion and digital enhancements as support for forward growth.
Lovesac's management emphasized the company's ability to navigate a challenging market through product innovation, operational flexibility, and a focus on brand and customer experience. The quarter's financial performance was attributed to strategic launches and supply chain resiliency, which helped the company outpace broader category declines and deliver results above analyst expectations.
Reclining Seat Launch Impact: The early introduction of the Reclining Seat significantly expanded Lovesac's addressable market. Management cited more than 18,500 units sold since launch, with strong engagement from both new and repeat customers, despite limited marketing.
Supply Chain Redundancy: Lovesac's ability to source products from multiple countries allowed rapid shifts away from China-based production, mitigating tariff exposure and ensuring inventory continuity. CEO Shawn Nelson described this redundancy as a competitive advantage, noting the company can 'ebb and flow our production to the most advantageous environments in real-time.'
Digital and Omnichannel Investments: The company continued investing in its online experience, including a replatformed website and improved digital configuration tools. These efforts were aimed at increasing online conversion and supporting omnichannel sales growth.
Showroom and Partnership Model: Management highlighted the value of physical showrooms and partnerships, such as the expanding roadshow model with Costco, as key drivers of customer acquisition and brand visibility.
Leadership Addition: The appointment of Heidi Cooley as Chief Brand and Marketing Officer, previously at Crocs, was positioned as a move to further strengthen the company's marketing and brand-building capabilities as Lovesac expands its offering beyond core seating products.
Lovesac projects mid-single-digit revenue growth for the next quarter with a midpoint revenue guide of $139 million, and targets full-year revenue of $725 million, reflecting 6.5% growth. The company expects full-year GAAP EPS of $1.08 and EBITDA of $54 million, with continued emphasis on product innovation and supply chain agility.
Product Pipeline Expansion: Upcoming launches, including EverCouch and further platform extensions, are expected to drive new customer acquisition and repeat purchases, broadening Lovesac's total addressable market.
Tariff and Sourcing Strategies: Management is monitoring tariff developments closely and has built inventory and diversified sourcing to limit risk. The ability to shift production quickly is seen as a buffer against cost pressures.
Showroom Growth and Customer Experience: Plans for around 30 new showrooms and ongoing enhancements to the digital and physical shopping experience are expected to support growth and reinforce brand loyalty, even as the broader market remains soft.
Maria Ripps (Canaccord Genuity): Asked about inventory strategy given the 90-day tariff delay; management explained inventory was intentionally built up and sourcing is shifting rapidly to minimize China exposure.
Matt Koranda (ROTH Capital Partners): Inquired about the assumptions behind Q1 sales guidance and the impact of recent promotional strategies; management noted balanced showroom openings and acknowledged year-over-year volatility but expressed confidence in quarterly growth targets.
Thomas Forte (Maxim Group): Questioned the pace at which Lovesac could remove all sourcing from China; leadership responded that redundant supply chains allow a move below 10% China exposure in the near term.
Alex Fuhrman (Craig-Hallum): Explored whether the expanding product range would require larger showrooms or new distribution strategies; management indicated current showrooms were designed with expansion in mind, and innovations would be integrated with existing footprints.
William Dawson (Oppenheimer): Asked for details on tariff mitigation and promotional strategy shifts; management explained that higher margins allow smaller price increases to offset tariffs and outlined continued use of targeted promotions and price adjustments.
Looking forward, the StockStory team will be monitoring (1) the national rollout and customer response to EverCouch, (2) Lovesac's ability to further diversify its supply chain and manage tariff impacts, and (3) execution on showroom expansion and digital enhancements. Additionally, the success of new leadership in elevating Lovesac's marketing and brand presence could play a significant role in the company's trajectory.
Can LOVE execute on its lofty goals? The answer lies in our free research report.
Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
28 minutes ago
- Yahoo
Experiential Retail Is Transforming American Malls With Pet Groomers And Doggy Daycare, IV Drips, And Specialty Grocers
Shopping centers and malls are diversifying and getting creative to maintain high foot traffic. The days of legacy tenants such as Bed Bath & Beyond, Filene's Basement, Modell's and Party City are long gone. Instead, experiential businesses have taken their place, according to a report by CoStar News. While experiential businesses have often been associated with nail and hair salons and restaurants, the type of retailers now occupying U.S. shopping centers has diversified to cover any operation that requires an in-person visit. CoStar reports those businesses now include pet groomers and doggy day care spaces, golf simulator clubs and even an IV drip center, all of which ply their trade alongside fast food and grocery stores like Jersey Mike's, Panda Express and Whole Foods. Don't Miss: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — Invest where it hurts — and help millions heal:. The growing trend in experiential retail centers around wellness, healthcare, fitness, recreational sports, pets, and kids. According to Forbes, at the start of the year, CoStar data showed successful retail centers were able to pivot to embrace new shopping trends. This meant smaller store sizes, experiential retail, and stores that catered to their geographic location, using data to inform site selection. 'There's a shift to smaller in general – smaller formats, shorter leases, more agile environments,' Melissa Gonzalez, principal at MG2, told Forbes. 'What is the point of the store? It's not about inventory now, especially as consumers are getting more and more comfortable shopping online. We're reevaluating the point of the store and how much of it needs to be about inventory per square foot versus experience per square foot." Fitness brands such as Lululemon (NASDAQ:LULU) now include fitness classes and wellness areas in their stores, Forbes reports. Outdoor shoe brand Sorel's Williamsburg, Brooklyn pop store offered customers an augmented reality experience in which they interacted with different weather conditions. Trending: Maximize saving for your retirement and cut down on taxes: . The COVID-19 pandemic turned the retail industry on its head. E-commerce shuttered conventional stores, and vacant spaces were filled with stores that fostered the new reality of the American consumer after the traumatizing effects of the pandemic — a greater focus on health and wellness and a place to get the pets homeowners had acquired during lockdown treated and then looked after when hybrid work conditions were imposed, CoStar reports. Equally, ethnic-style food markets, typified by H Mart, have emerged, catering to customers with a sense of culinary adventure who wish to branch out from the usual dishes they prepare at home. 'Coming out of COVID, the breadth and depth of — we don't even call them retailers anymore, it's really users — has expanded tremendously,' Doug Healey, Macerich (NYSE:MAC) senior executive vice president of leasing, said on a recent earnings call. 'So when we talk about leasing, there are the key legacy retailers. They'll always be a part of our shopping centers. But you're also looking at digitally native and emerging brands, international brands, food and beverage, restaurant, medical, entertainment, electric vehicles, fitness, home furnishings, groceries. So the uses that we have to choose from are really unprecedented today.'At the recent International Council of Shopping Centers conference in Las Vegas, a session called 'The Next Big Retail Categories' discussed emerging sectors in retail, all of which had an experiential element. These included second-hand thrift-like stores, capitalizing on the appeal of vintage apparel, especially to teens. 'Medtail' stores focusing on wellness and medical providers, exemplified by chains such as Restore Hyper Wellness, which offers drips delivering hydration, electrolytes, nutrients, and more. Spas such as Freeze & Float in Chicago offer customers the opportunity to experience hot and cold therapy treatments. 'Healthcare providers are seeking retail locations to improve patient accessibility, with location/ proximity being the second most important factor for patients choosing a provider,' commercial real estate brokerage Jones Lang LaSalle (NYSE:JLL) said in a recent report on medtail. 'There's a growing trend in wellness and preventative care services, especially in affluent areas, with concepts like IV drip clinics expanding into retail locations.' Read Next:Can you guess how many retire with a $5,000,000 nest egg? . Image: Shutterstock Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article Experiential Retail Is Transforming American Malls With Pet Groomers And Doggy Daycare, IV Drips, And Specialty Grocers originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 hours ago
- Yahoo
Down 21%, Should You Buy the Dip on Apple Stock? The Answer Might Surprise You.
It's the combination of products and services that has made Apple one of the best businesses on Earth. Ongoing uncertainty surrounding the tariff situation adds to investor concerns. At the current valuation, Apple stock provides zero margin of safety. 10 stocks we like better than Apple › Apple (NASDAQ: AAPL) shares are down 18% in 2025 (as of June 6). This makes Apple the worst-performing "Magnificent Seven" constituent this year, besides Tesla. Investors are probably concerned about tariff uncertainty and the company's slow progress with artificial intelligence (AI). The stock is currently 21% below its peak. So, it has some work to do to get back to its former glory. Legendary investor Warren Buffett and his conglomerate, Berkshire Hathaway, have sold a sizable chunk of their shares in the past several quarters. However, should you go against the Oracle of Omaha's moves and buy the dip on Apple stock? I think the answer might surprise you. I mention Buffett because many individual investors like to follow his buy and sell decisions. Clearly, when Berkshire first bought Apple in early 2016, they must've thought the tech giant was a high-quality enterprise. It's not hard to see why. Apple's brand is arguably the most recognizable in the world. This position wasn't created overnight. It took years and years of introducing truly exceptional products and services, that were well designed and incredibly easy to use, on a global scale. Apple is an icon, to say the least. That brand has helped drive Apple's pricing power. And this supports the company's unrivaled financial position. Apple remains an unbelievably profitable business. It brought in $24.8 billion in net income in the latest fiscal quarter (Q2 2025 ended March 29). Apple's products and services are impressive on their own. However, it's the combination of both of these aspects that creates the powerful ecosystem. Consumers are essentially locked in, which creates high barriers for them to switch to competing products. This favorable setup places Apple in an enviable position from a competitive perspective. Despite Apple's market cap of nearly $3.1 trillion, which might make some investors believe it's immune to external challenges, this business is dealing with some notable issues recently. There are three that immediately come to mind. The first problem is that Apple's growth engine seems to be decaying. Net sales were up less than 7% between fiscal 2021 and fiscal 2024. And they're up just over 4% through the first six months of fiscal 2025. According to management, there are likely over 2.4 billion active Apple devices across the globe. That number continues to rise with every passing quarter, but you get an idea of how ubiquitous these products are. Plus, the maturity of the iPhone, now almost two decades into its lifecycle, might lead to limited opportunities to further penetrate markets. Critics can also call out Apple's slow entrance into the AI race. For example, we won't see an AI update to Siri until next year, a launch that was delayed. At the same time, it seems like other companies are moving rapidly to win the AI race. Lastly, Apple has been and could continue to be drastically impacted by the tariff situation. China, which has gotten the most attention from President Donald Trump during the ongoing trade tensions, has been a manufacturing powerhouse for Apple. The business is being forced to shift its supply chain around to minimize the impact. Apple CEO Tim Cook said that the situation makes it challenging to forecast near-term results. Even though this stock trades 21% off its peak, investors aren't really getting a bargain deal here. The price-to-earnings ratio is 32 right now. That's not cheap for a company whose earnings per share are only expected to grow at a compound annual rate of 8.8% between fiscal 2024 and fiscal 2027. In my view, there's zero margin of safety. If you're an investor who wants to generate market-beating returns over the next five years, I don't think you should buy Apple today. Before you buy stock in Apple, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Apple wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $868,615!* Now, it's worth noting Stock Advisor's total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Tesla. The Motley Fool has a disclosure policy. Down 21%, Should You Buy the Dip on Apple Stock? The Answer Might Surprise You. was originally published by The Motley Fool
Yahoo
3 hours ago
- Yahoo
Better Artificial Intelligence (AI) Stock: CoreWeave vs. Nvidia
CoreWeave has made a splash in the market as it quickly grows its cloud services business. Nvidia is proving its AI lineup of products is becoming more and more pervasive. CoreWeave is valued at a high multiple and has massive capital spending planned. 10 stocks we like better than Nvidia › There will prove to be many winners as artificial intelligence (AI) infrastructure continues to grow and AI end-uses expand. Nvidia (NASDAQ: NVDA) has been the Wall Street darling surrounding everything AI for the past two years. CoreWeave (NASDAQ: CRWV) has been getting the love most recently, though. Shares of the AI hyperscaler providing cloud services have soared about 185% in just the past month as of this writing. Nvidia stock has increased 24% in that time. CoreWeave just went public in late March, and the shares have jumped about 270% since that initial public offering (IPO). Investors may wonder if Nvidia's shine is fading, and it's time to buy CoreWeave instead. I'd argue that is flawed thinking, however. Investors may be taking a breather after the early exponential gains in Nvidia stock. Growth in the business itself has also slowed, though that was inevitable. Sales of its advanced chips in the data center segment had been growing like a weed. Revenue in that segment has been increasing in each consecutive quarter for the last two years. In the most recent fiscal quarter, that growth rate slowed to 10%, though, as seen below. Despite that trend, it's clear AI demand hasn't yet peaked. Remember, these are still sequential quarterly increases in data center sales. For perspective, that fiscal first-quarter revenue was a 73% jump compared to the prior year period. Management also guided investors to expect further revenue growth in the current quarter. So, while an unsustainable growth rate slows, the company is still solidly in growth mode. That's because it's not just Nvidia's advanced GPU and CPU chips driving sales and expanding AI infrastructure. Its AI ecosystem includes interconnect technologies, the CUDA (compute unified device architecture) software platform, and artificial intelligence processors that are part of many different types of architectures. CEO Jensen Huang recently touted Nintendo's new Switch 2 gaming console, for example. The unit includes Nvidia's AI processors that Huang claims "sharpen, animate, and enhance gameplay in real time." Nvidia has a broad array of customers. As AI factories and data centers are built, it will continue to be a major supplier and one that investors should benefit from owning. Nvidia also invests in the AI sector. It makes sense to look at where the AI leader itself sees future gains. One of the AI companies in which Nvidia holds a stake is CoreWeave. Nvidia should know CoreWeave well, too, as an important customer. CoreWeave leases data center space to companies needing the scalable, on-demand compute power it has control of from the 250,000 Nvidia chips it has purchased. It's a desirable option for enterprises that require significant computational power to process large amounts of data efficiently. There appears to be plenty of demand. But there is plenty of risk for investors, too. It just announced a new lease agreement to further increase capacity. Applied Digital, a builder and operator of purpose-built data centers, has agreed to deliver CoreWeave 250 megawatts (MW) of power load on a 15-year term lease at its recently built North Dakota data center campus. CoreWeave has the option to expand the load by an additional 150 MW in the future. Demand is quickly driving growth for CoreWeave. That's led investors to jump in and drive the stock higher in recent months. Valuation is just one major risk with CoreWeave. Customer concentration is another. Last year, Microsoft accounted for nearly two-thirds of revenue. CoreWeave also disclosed that 77% of 2024 revenue came from just its top two customers. CoreWeave is also spending massive amounts of capital to grow AI cloud capacity. It had about $5.4 billion of liquidity available as of March 31 and raised another $2 billion from a late May debt offering. That's approximately its level of capital expenditure in just the first quarter alone, though. That spending may pay off. But there are risks there as well. Customers could develop their own AI infrastructure or could redesign systems that don't require its services. CoreWeave stock also trades at a high valuation after the stock has soared. It recently had a price-to-sales (P/S) ratio of about 30. That could be cut in half this year with its strong sales growth, but it isn't earning any money yet. At the same time, Nvidia sports a price-to-earnings (P/E) ratio of about 30 based on this year's expected profits. Remember, too, that as CoreWeave grows, so do Nvidia's profits. Applied Digital CEO Wes Cummins said that its leased North Dakota data center campus will be full of Nvidia Blackwell class servers. I think the risk profile, financial picture, and massive potential for Nvidia make it the better AI stock to buy now. Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $868,615!* Now, it's worth noting Stock Advisor's total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Howard Smith has positions in Microsoft and Nvidia. The Motley Fool has positions in and recommends Microsoft and Nvidia. The Motley Fool recommends Nintendo and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Better Artificial Intelligence (AI) Stock: CoreWeave vs. Nvidia was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
