Lovesac posted a smaller loss than expected but trimmed its full-year sales forecast

For fiscal 2027, Lovesac revised its net sales guidance to a range of $700 million to $740 million, a reduction of $10 million from the top of its previous forecast. On the earnings side, the per-share guidance floor remained unchanged at $0.34, while the upper bound was pulled back to $0.81 from $0.95.

At $0.76 per share, the quarterly loss proved considerably narrower than the $1.05 per share hit that analysts had anticipated. Revenue of $138.2 million for the quarter ended May 3 edged past the $136.3 million consensus estimate and was little changed from the $138.4 million recorded in the same period a year ago, according to the Wall Street Journal.

Gross margin contracted 160 basis points to 52.1% of net sales from 53.7% a year earlier, driven by increases of 380 basis points in inbound transportation and tariff costs and 110 basis points in outbound transportation and warehousing costs, the company said. Those headwinds were partially offset by a 330-basis-point improvement in product margin from price increases and cost-reduction initiatives.

The sales decline from a year earlier was driven by the closure of Lovesac's Best Buy $BBY shop-in-shop locations and a 1.0% drop in omni-channel comparable net sales, partially offset by 14 net new showrooms. The company ended the quarter with 281 showrooms, up from 267 a year ago. Internet sales rose 7.1%.

CEO Shawn David Nelson said in a statement that the quarterly results reflected disciplined execution and modest market-share gains. He pointed to upcoming product launches, a national rollout of delivery services, and a "New Room" product platform expected to launch in early calendar 2027 as drivers of future growth. The company is also beginning domestic production of Sactionals seat inserts this summer, a move intended to reduce cost volatility and limit exposure to overseas shipping disruptions.

Lovesac's updated outlook incorporates approximately $3.6 million in refunds collected related to IEEPA tariffs, including a small amount of interest, which the company expects to recognize in the second quarter.

Looking to the second quarter, the company projected revenue in a range of $157 million to $166 million alongside a net loss of $3 million to $7 million, or $0.20 to $0.48 per diluted share. That compares with Wall Street's expectation of a $0.33 per share loss on $165.2 million in sales.

Cash and cash equivalents stood at $57.0 million as of May 3, up from $26.9 million a year earlier. The company carried no balance on its line of credit.