Lovesac Sales Dip, But Profitability Improves in Q2

TL;DR

Lovesac sales down to $130.8M, but net loss narrowed to $1.6M. Gross profit up!

AI Summary

Lovesac Co. reported its second quarter results for the period ending August 4, 2024. The company's net sales for the quarter were $130.8 million, a decrease from $135.1 million in the same period last year. Despite the sales dip, gross profit increased to $57.5 million from $55.6 million, and the company reported a net loss of $1.6 million, an improvement from a net loss of $3.4 million in the prior year's second quarter.

Why It Matters

This filing indicates a mixed financial performance for Lovesac, with declining sales but improved profitability, which could impact investor confidence and future strategic decisions.

Risk Assessment

Risk Level: medium — The company experienced a decrease in net sales, indicating potential market challenges or reduced consumer demand for its products.

Key Numbers

• $130.8M — Net Sales (Second quarter net sales, down from $135.1M in the prior year.)
• $57.5M — Gross Profit (Second quarter gross profit, up from $55.6M in the prior year.)
• $1.6M — Net Loss (Second quarter net loss, improved from a $3.4M loss in the prior year.)

Key Players & Entities

• Lovesac Co. (company) — Filer of the 10-Q
• August 4, 2024 (date) — End of the reporting period
• $130.8 million (dollar_amount) — Net sales for the second quarter
• $135.1 million (dollar_amount) — Net sales for the prior year's second quarter
• $57.5 million (dollar_amount) — Gross profit for the second quarter
• $55.6 million (dollar_amount) — Gross profit for the prior year's second quarter
• $1.6 million (dollar_amount) — Net loss for the second quarter
• $3.4 million (dollar_amount) — Net loss for the prior year's second quarter

FAQ

Key Financial Figures

• $0.00001 — ange on which registered Common Stock, $0.00001 par value per share LOVE The Nasdaq Sto
• $0.1 m — benefit of $ 1.8 million and less than $0.1 million, respectively, which reflects an

Filing Documents

• love-20240804.htm (10-Q) — 764KB
• q2fy25ex-311.htm (EX-31.1) — 11KB
• q2fy25ex-312.htm (EX-31.2) — 12KB
• q2fy25ex-321.htm (EX-32.1) — 4KB
• q2fy25ex-322.htm (EX-32.2) — 5KB
• 0001628280-24-040192.txt ( ) — 3748KB
• love-20240804.xsd (EX-101.SCH) — 24KB
• love-20240804_cal.xml (EX-101.CAL) — 42KB
• love-20240804_def.xml (EX-101.DEF) — 102KB
• love-20240804_lab.xml (EX-101.LAB) — 341KB
• love-20240804_pre.xml (EX-101.PRE) — 219KB
• love-20240804_htm.xml (XML) — 371KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION 1 Item 1.

Financial Statements

Financial Statements 1 Condensed Balance Sheets as of August 4, 2024 and February 4, 2024 (unaudited) 1 Condensed Statements of Operations for the thirteen and twenty-six weeks ended August 4, 2024 and July 30, 2023 (unaudited) 2 Condensed Statements of Changes in Stockholders' Equity for the thirteen and twenty-six weeks ended August 4, 2024 and July 30, 2023 (unaudited) 3 Condensed Statements of Cash Flows for the twenty-six weeks ended August 4, 2024 and July 30, 2023 (unaudited) 4

Notes to Financial Statements (unaudited)

Notes to Financial Statements (unaudited) 5 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 13 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 23 Item 4.

Controls and Procedures

Controls and Procedures 23

OTHER INFORMATION

Part II. OTHER INFORMATION 24 Item 1.

Legal Proceedings

Legal Proceedings 24 Item 1A.

Risk Factors

Risk Factors 24 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 24 Item 3. Defaults Upon Senior Securities 24 Item 4. Mine Safety Disclosures 24 Item 5. Other Information 24 Item 6. Exhibits 25 i Table of Contents

Forward-Looking Statements

Forward-Looking Statements This Quarterly Report on Form 10-Q, including in Part I – Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, and elsewhere, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other legal authority, which statements may involve substantial risk and uncertainties. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future operating results, financial position and liquidity, our business strategy and plans, market growth and trends, and our objectives for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. You should not place undue reliance on forward looking statements. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur at all or on a specified timeframe. The cautionary statements set forth in this Quarterly Report on Form 10-Q identify important factors which you should consider in evaluating our forward-looking statements. These factors include, among other things: business disruptions or other consequences of economic instability, political instability, civil unrest, armed hostilities and global conflict, natural and man-made disasters, pandemics or other public health crises, or other catastrophic events; the impact of changes or declines in consumer spending and inflation on our business, sales, results of operations and financial condition; our ability to manage and

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. THE LOVESAC COMPANY CONDENSED BALANCE SHEETS (unaudited) (amounts in thousands, except share and per share amounts) August 4, 2024 February 4, 2024 Assets Current Assets Cash and cash equivalents $ 72,126 $ 87,036 Trade accounts receivable, net 14,787 13,463 Merchandise inventories, net 88,287 98,440 Prepaid expenses 15,281 11,664 Other current assets 3,677 3,845 Total Current Assets 194,158 214,448 Property and equipment, net 77,012 70,807 Operating lease right-of-use assets 159,131 155,856 Goodwill 144 144 Intangible assets, net 1,428 1,457 Deferred tax asset 16,885 10,803 Other assets 32,317 28,665 Total Assets $ 481,075 $ 482,180 Liabilities and Stockholders' Equity Current Liabilities Accounts payable $ 28,524 $ 28,821 Accrued expenses 35,838 38,622 Payroll payable 10,694 6,998 Customer deposits 15,297 8,257 Current operating lease liabilities 19,011 17,628 Sales taxes payable 5,712 6,030 Total Current Liabilities 115,076 106,356 Operating lease liabilities, long-term 163,405 157,876 Income tax payable, long-term 452 452 Line of credit — — Total Liabilities 278,933 264,684 Commitments and Contingencies (see Note 6) Stockholders' Equity Preferred Stock $ 0.00001 par value, 10,000,000 shares authorized, no shares issued or outstanding as of August 4, 2024 and February 4, 2024. — — Common Stock $ 0.00001 par value, 40,000,000 shares authorized, 15,558,682 shares issued and outstanding as of August 4, 2024 and 15,489,364 shares issued and outstanding as of February 4, 2024. — — Additional paid-in capital 186,562 183,095 Accumulated earnings 15,580 34,401 Stockholders' Equity 202,142 217,496 Total Liabilities and Stockholders' Equity $ 481,075 $ 482,180 The accompanying notes are an integral part of these condensed financial statements. 1 Table of Contents THE LOVESAC COMPANY CONDENSED STATEMENTS OF OPERATIONS (unaudited) Thirteen weeks ended Twenty-six weeks ended (amounts in tho

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View this 10-Q filing on SEC EDGAR