Lovesac post Q1 loss on flat sales, maintains full-year outlook
The Lovesac Company (NASDAQ:LOVE) reported a net loss for its fiscal 2027 first quarter, reflecting the persistent operational difficulties home furnishings retailers face as sticky inflation and elevated mortgage rates suppress discretionary consumer spending.
The Stamford, Connecticut-based modular furniture maker generated net sales of $138.2 million for the quarter ended May 3, 2026, down a marginal 0.1% compared to the prior-year period.
Omni-channel comparable net sales dipped 1% year-over-year, tracking a broader cyclical cooling across the domestic home accents and large-scale furniture sectors.
To counteract the broader physical retail slowdown, the company expanded its physical distribution network, ending the quarter with 281 operational showrooms, up from its legacy baseline.
Lovesac’s gross margin for the multi-week reporting period landed at 52.1%, benefiting from localized supply chain efficiencies and lower inbound freight expenses that offset heavy promotional discounting required to turn over slow-moving retail floor stock.
The company's net loss hit $11.1 million, translating to a loss of $0.76 per diluted share, while adjusted EBITDA finished in negative territory at negative $10.5 million.
On the balance sheet, Lovesac optimized its working capital configurations to buffer against ongoing market unpredictability.
Total corporate cash and cash equivalents grew to $57 million by the end of the quarter, providing ample financial runway.
Concurrently, aggressive clearance maneuvers and tighter production pacing allowed total merchandise inventory values to decline to $109.3 million, marking an improvement over prior-year balance sheet exposure levels.
Looking ahead, management opted to reiterate its full-year fiscal 2027 guidance ranges, signaling internal confidence that new product launches and shifting marketing strategies will drive a second-half volume recovery.
For the full fiscal year, Lovesac projects total consolidated net sales to fall between $700 million and $740 million.
The company expects adjusted EBITDA to range from $35 million to $46 million, with net income ultimately rebounding to positive ground between $5 million and $12 million.
