Lovesac Cuts Sales Guidance $10M as Q1 Loss Narrows and Revenue Tops Estimates
LOVE•Lovesac posted a Q1 net loss of $11.1 million (EPS -$0.76) versus an expected -$1.05, with revenue of $138.2 million slightly above consensus and flat year-on-year. The company cut full-year net sales guidance by $10 million to $700 million–$740 million, citing 160 bps gross-margin pressure from tariffs and shipping partly offset by 330 bps product margin gains.
1. First-Quarter Financial Results
Lovesac reported a net loss of $11.1 million in Q1 fiscal 2027, or $0.76 per share, compared with analysts’ expectations of a $1.05 loss. Revenue reached $138.2 million, edging past the $136.3 million consensus and matching last year’s figure, driven by a 7.1% rise in internet sales and the addition of 14 new showrooms.
2. Updated Full-Year Outlook
The company trimmed its full-year net sales guidance by $10 million to a range of $700 million–$740 million while maintaining EPS guidance of $0.34 to $0.81. For Q2, Lovesac projects revenue of $157 million–$166 million and a net loss of $3 million–$7 million, incorporating approximately $3.6 million in IEEPA tariff refund recognition.
3. Margin Impact and Growth Initiatives
Gross margin contracted 160 basis points to 52.1% due to a 380 bps increase in inbound transportation and tariff costs and a 110 bps rise in outbound expenses, partially offset by a 330 bps product margin improvement from price hikes and cost cuts. CEO Shawn David Nelson highlighted upcoming product launches, a national delivery rollout, the early-2027 release of the New Room platform and the start of domestic Sactionals seat-insert production this summer to reduce cost volatility.
