Internet gains aren’t enough as Lovesac experiences Q3 net sales drop
Lovesac battled some headwinds to end the third quarter with a net sales loss as showroom sales fell.
STAMFORD, Conn. — Home furnishings brand Lovesac battled some “near-term headwinds” in the third quarter of its 2025 fiscal year, which resulted in a 2.7% drop in net sales across all channels.
“Near-term headwinds for our category clearly persisted through the pre-election period,” said Shawn Nelson, CEO. “However, we gained market share and strengthened our competitive position through our relentless focus on product innovation and operational excellence.”
Total net sales for the third quarter, ended Nov. 3, were $149.9 million vs. $154 million in the same quarter in a year earlier. Showroom sales fell by 7.8% for the quarter to $91 million, while Internet sales rose 12.1% to $44.9 million from $40 million a year ago. Sales in the “other” category were off by 8.6%, accounting for $14 million. During the quarter, Lovesac added five showrooms and closed one.
Gross profit decreased by 0.9%, or $800,000, in the third quarter. Gross margin increased 110 basis points to 58.5% of net sales, an increase from 57.4% in the prior year quarter. Advertising and marketing expenses decreased $1.2 million due to a strategic reduction in media spend.
Lovesac booked an operating loss of $7.7 million in the period, with a reduction of 5.1% of net sales. Adjusted EBITDA for the quarter was $2.7 million, a 6.9% increase over $2.5 million in year-ago period.
The company’s outlook for the fourth quarter includes net sales in the $221 million to $241 million range, adjusted EBITDA between $43 million and $55 million, net income between $28 million and $36 million, and diluted income per common share ranging from $1.67 to $2.14.
Nelson said the company’s soft launch of its reclining seat in the fourth quarter “is just one of the many exciting examples” of “our expanding portfolio of innovative products … creating new avenues for sustained growth in the future.”
The company’s full year outlook calls for net sales between $660 million and $680 million and adjusted EBITDA of $37.5 million to $48.5 million. Net income is expected to range from $4.5 million to $12.5 million.
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