Lovesac Q1 Net Sales $138.2M; Internet Sales Up 7.1%, Showrooms Rise 14
LOVE•Lovesac Q1 FY27 net sales were $138.2M, flat y/y, with internet sales up 7.1% and showroom count rising by 14 to 281, while gross margin slipped 160bps to 52.1%. Net loss widened to $11.1M ($0.76/share), cash climbed to $57.0M, and domestic Sactionals insert production begins this summer.
1. Q1 Financial Performance
Lovesac reported first quarter FY27 net sales of $138.2M, nearly unchanged year-over-year, driven by a 7.1% increase in internet revenue and a net addition of 14 showrooms to 281. Gross profit fell 3.2% to $72.0M and gross margin contracted 160 basis points to 52.1%, while operating loss widened to $17.4M and net loss increased to $11.1M ($0.76 per share).
2. Operational Drivers and Strategy
Internet channel growth and showroom expansion offset a 36.3% decline in other sales following the closure of Best Buy shop-in-shops. SG&A expenses rose 2.2% due to higher incentive compensation, while advertising and marketing spend fell 10.7% on strategic timing. Domestic production of Sactionals seat inserts will begin this summer to lower costs and accelerate delivery.
3. Liquidity and Future Initiatives
Cash and cash equivalents nearly doubled to $57.0M with zero balance on a $34.9M credit line, and inventory was trimmed to $109.3M. The company plans a high-end sectional launch later this year and the New Room product debut in early 2027 to drive growth and market share gains.
