Latest news with #EverCouch
Yahoo
23-04-2025
- Business
- Yahoo
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.
Yahoo
11-04-2025
- Business
- Yahoo
The Lovesac Co (LOVE) Q4 2025 Earnings Call Highlights: Navigating Challenges with Strategic Growth
Annual Revenue: $680.6 million, down from $700.3 million in the prior year. Gross Margin: Nearly 59% for the year, with a 70 basis point increase to 60.4% in Q4. Net Income: $11.6 million for the year; $35.3 million in Q4. Net Sales (Q4): $241.5 million, a decrease of 3.6% compared to the prior year. Showroom Net Sales (Q4): $154.5 million, a decrease of 1.6%. Internet Net Sales (Q4): $70.5 million, a decrease of 9.7%. Other Net Sales (Q4): $16.5 million, an increase of 6.7%. SG&A Expense (Q4): 28% of net sales, down from 30.5% in the prior year. Advertising and Marketing Expenses (Q4): $26.8 million, 11.1% of net sales. Operating Income (Q4): $47.6 million, up from $40.4 million in the prior year. Adjusted EBITDA (Q4): $53.9 million, compared to $48.4 million in the prior year. Cash and Cash Equivalents: $83.7 million at the end of Q4. Inventory Levels: Up 26% to $124.3 million. Share Repurchases: Approximately 646,000 shares repurchased for $16.5 million in Q4. Fiscal 2026 Revenue Outlook: $700 million to $750 million. Fiscal 2026 Adjusted EBITDA Outlook: $48 million to $60 million. Fiscal 2026 Net Income Outlook: $13 million to $22 million. Warning! GuruFocus has detected 5 Warning Sign with LOVE. Release Date: April 10, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. The Lovesac Co (NASDAQ:LOVE) achieved its most prolific year for new product launches, including the successful introduction of the PillowSac Accent Chair and the Reclining Seat. The company has codified its long-term strategy and value creation model, unveiling new product platforms like the EverCouch. Lovesac has strengthened its supply chain and enhanced CRM tools, providing a competitive advantage in its omnichannel business model. The Reclining Seat has sold over 18,500 units with strong customer feedback and a balanced mix of new and repeat customers. The company maintains a healthy balance sheet, providing flexibility to navigate macroeconomic challenges and invest in growth opportunities. Net sales decreased by 3.6% in the fourth quarter compared to the prior year, with showroom and internet sales both experiencing declines. The company faces macroeconomic challenges, including potential tariff impacts and a generally unpredictable category environment. Despite a strong product launch year, overall revenues for fiscal 2025 were down from the previous year due to category headwinds. The company anticipates a potential adjusted EBITDA loss in the first quarter of fiscal 2026, reflecting ongoing market uncertainties. Lovesac's inventory levels are higher than normal, which could pose risks if demand does not meet expectations. Q: How is Lovesac managing its inventory strategy given the 90-day tariff delay and increased inventory levels? A: Mary Fox, President and COO, explained that Lovesac has built up inventory across all product lines and feels confident in their position. The company is actively working to diversify sourcing from countries like Malaysia and Vietnam to manage potential tariff impacts and maintain strong inventory levels. Q: Are there any recent changes in consumer behavior, particularly in February and March, given the macroeconomic conditions? A: Mary Fox noted that Lovesac has observed stable performance from customers, with strong February sales continuing into March. While there is some quietness between key promotions, the company has seen progress in quote conversion and no significant changes in consumer behavior. Q: How is Lovesac planning to handle potential tariff impacts, and what is the company's pricing strategy? A: Mary Fox stated that the company is working with vendors on concessions and considering surgical price increases due to their structurally higher gross margins. Lovesac has successfully implemented price increases in the past without impacting demand and is monitoring competitive pricing trends to remain competitive. Q: What is the impact of new product launches, like the Reclining Seat, on Lovesac's growth projections for fiscal 2026? A: Keith Siegner, CFO, highlighted that new products, showroom expansions, and enhanced marketing strategies are expected to drive growth beyond category performance. The Reclining Seat has exceeded expectations, with over 18,500 units sold and a balanced mix of new and repeat customers. Q: How does Lovesac's product expansion impact its showroom strategy? A: Shawn Nelson, CEO, mentioned that the current showrooms are well-suited for the introduction of new products like the EverCouch. Lovesac plans to continue opening new showrooms and has innovative strategies for omnichannel execution, ensuring efficient use of space and resources. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
11-04-2025
- Business
- Yahoo
The Lovesac Co (LOVE) Q4 2025 Earnings Call Highlights: Navigating Challenges with Strategic Growth
Annual Revenue: $680.6 million, down from $700.3 million in the prior year. Gross Margin: Nearly 59% for the year, with a 70 basis point increase to 60.4% in Q4. Net Income: $11.6 million for the year; $35.3 million in Q4. Net Sales (Q4): $241.5 million, a decrease of 3.6% compared to the prior year. Showroom Net Sales (Q4): $154.5 million, a decrease of 1.6%. Internet Net Sales (Q4): $70.5 million, a decrease of 9.7%. Other Net Sales (Q4): $16.5 million, an increase of 6.7%. SG&A Expense (Q4): 28% of net sales, down from 30.5% in the prior year. Advertising and Marketing Expenses (Q4): $26.8 million, 11.1% of net sales. Operating Income (Q4): $47.6 million, up from $40.4 million in the prior year. Adjusted EBITDA (Q4): $53.9 million, compared to $48.4 million in the prior year. Cash and Cash Equivalents: $83.7 million at the end of Q4. Inventory Levels: Up 26% to $124.3 million. Share Repurchases: Approximately 646,000 shares repurchased for $16.5 million in Q4. Fiscal 2026 Revenue Outlook: $700 million to $750 million. Fiscal 2026 Adjusted EBITDA Outlook: $48 million to $60 million. Fiscal 2026 Net Income Outlook: $13 million to $22 million. Warning! GuruFocus has detected 5 Warning Sign with LOVE. Release Date: April 10, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. The Lovesac Co (NASDAQ:LOVE) achieved its most prolific year for new product launches, including the successful introduction of the PillowSac Accent Chair and the Reclining Seat. The company has codified its long-term strategy and value creation model, unveiling new product platforms like the EverCouch. Lovesac has strengthened its supply chain and enhanced CRM tools, providing a competitive advantage in its omnichannel business model. The Reclining Seat has sold over 18,500 units with strong customer feedback and a balanced mix of new and repeat customers. The company maintains a healthy balance sheet, providing flexibility to navigate macroeconomic challenges and invest in growth opportunities. Net sales decreased by 3.6% in the fourth quarter compared to the prior year, with showroom and internet sales both experiencing declines. The company faces macroeconomic challenges, including potential tariff impacts and a generally unpredictable category environment. Despite a strong product launch year, overall revenues for fiscal 2025 were down from the previous year due to category headwinds. The company anticipates a potential adjusted EBITDA loss in the first quarter of fiscal 2026, reflecting ongoing market uncertainties. Lovesac's inventory levels are higher than normal, which could pose risks if demand does not meet expectations. Q: How is Lovesac managing its inventory strategy given the 90-day tariff delay and increased inventory levels? A: Mary Fox, President and COO, explained that Lovesac has built up inventory across all product lines and feels confident in their position. The company is actively working to diversify sourcing from countries like Malaysia and Vietnam to manage potential tariff impacts and maintain strong inventory levels. Q: Are there any recent changes in consumer behavior, particularly in February and March, given the macroeconomic conditions? A: Mary Fox noted that Lovesac has observed stable performance from customers, with strong February sales continuing into March. While there is some quietness between key promotions, the company has seen progress in quote conversion and no significant changes in consumer behavior. Q: How is Lovesac planning to handle potential tariff impacts, and what is the company's pricing strategy? A: Mary Fox stated that the company is working with vendors on concessions and considering surgical price increases due to their structurally higher gross margins. Lovesac has successfully implemented price increases in the past without impacting demand and is monitoring competitive pricing trends to remain competitive. Q: What is the impact of new product launches, like the Reclining Seat, on Lovesac's growth projections for fiscal 2026? A: Keith Siegner, CFO, highlighted that new products, showroom expansions, and enhanced marketing strategies are expected to drive growth beyond category performance. The Reclining Seat has exceeded expectations, with over 18,500 units sold and a balanced mix of new and repeat customers. Q: How does Lovesac's product expansion impact its showroom strategy? A: Shawn Nelson, CEO, mentioned that the current showrooms are well-suited for the introduction of new products like the EverCouch. Lovesac plans to continue opening new showrooms and has innovative strategies for omnichannel execution, ensuring efficient use of space and resources. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
