The Lovesac Company (LOVE) Q2 2026 earnings summary

Executive summary

• Net sales for Q2 FY26 rose 2.5% year-over-year to $160.5 million, driven by showroom expansion and omni-channel growth, while ecommerce and other channels declined.

• Gross margin declined 260 basis points to 56.4% due to higher transportation costs and increased promotional discounting.

• Operating loss was $8.8 million, net loss was $6.7 million ($0.45 per share), and adjusted EBITDA was $0.8 million.

• The company continued to gain market share, supported by new product launches, a refreshed brand strategy, and the expansion of the Snugg line.

• Investments in innovation, digital experience, and omnichannel engagement remain priorities.

Financial highlights

• Q2 net sales: $160.5 million (+2.5% YoY); gross profit: $90.6 million (-1.9% YoY); gross margin: 56.4% (-260 bps YoY).

• SG&A as a percentage of sales improved to 44.9% from 47.0% YoY, reflecting expense management and lower Best Buy costs.

• Adjusted EBITDA for Q2 was $0.8 million, down from $1.5 million YoY.

• Cash and equivalents stood at $34.2 million with no borrowings and $36 million in committed availability.

• Inventory increased to $124.0 million, up from $88.3 million YoY, but levels are expected to end FY26 below prior year.

Outlook and guidance

• FY26 net sales guidance tightened to $710–$740 million, representing 4%–9% growth.

• Adjusted EBITDA forecasted at $42–$55 million; net income expected between $8–$17 million.

• Gross margin guidance lowered to 57%–58% for the year due to tariff and discounting pressures.

• Q3 guidance: net sales $151–$161 million, adjusted EBITDA loss $1–$7 million, gross margin 56%–57%.

• No incremental tariff changes assumed in guidance; further pricing actions not currently planned.