Q2 2025 Lovesac Co Earnings Call Transcript
Key Points
- The Lovesac Co (LOVE) reported total net sales of $156.6 million, reflecting a positive net sales growth of 1.3% for the quarter.
- The company successfully launched the PillowSac Accent Chair Frame (PACS), which saw incredible response and surpassed expectations, selling out within weeks.
- The new AnyTable product was launched, representing Lovesac's entry into the adjacent furniture category of tables and case goods.
- The company has a strong balance sheet with $72.1 million in cash and cash equivalents and no borrowings on its credit facility.
- Lovesac's omnichannel model and CRM tools are driving momentum, with significant enhancements to their website and customer engagement platforms.
- Total omnichannel comparable net sales decreased by 5.4%, indicating some challenges in maintaining consistent sales across all channels.
- Gross margin decreased by 80 basis points to 59% of net sales, primarily due to higher promotional discounting and increased outbound transportation and warehousing costs.
- SG&A expenses as a percentage of net sales increased to 47%, driven by higher payroll, equity-based compensation, professional fees, and rent.
- The company reported an operating loss of $8.4 million for the quarter, compared to $1 million in the same period last year.
- Net loss for the quarter was $5.9 million, or negative $0.38 per common share, compared to a net loss of $0.6 million, or negative $0.04 per common share, in the prior year period.
Greetings and welcome to the Lovesac second quarter fiscal 2025 earnings call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ms. Caitlin Churchill, Investor Relations for Lovesac. Thank you. You may begin.
Thank you. Good morning, everyone. With me on the call is Shawn Nelson, Chief Executive Officer; Mary Fox, President and Chief Operating Officer; and Keith Siegner, Chief Financial Officer. Before we get started, I would like to remind you that some of the information discussed will include forward-looking statements regarding future events and our future financial performance.
These include statements about our future expectations, financial projections and our plans and prospects. Actual results may differ materially from those set forth in such statements. For a discussion of these risks and uncertainties, you should review the company's filings with the SEC, which includes today's press release.
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