Shares of Lovesac (LOVE 1.85%) are up 10.6% as of 2 p.m. ET Wednesday after the furniture retailer announced better-than-expected quarterly results.
For its fiscal third quarter ended Oct. 29, Lovesac's revenue grew 14.3% year over year to $154 million. On the bottom line, that translated to a generally accepted accounting principles (GAAP) net loss of $2.3 million, or $0.15 per share, narrowed from a loss of $0.48 per share in the same year-ago period. Analysts, on average, were expecting a wider net loss of $0.30 per share on slightly lower revenue of $153.8 million.
NASDAQ: LOVE
Key Data Points
A strong quarter for Lovesac despite macro headwinds
Lovesac's top line was driven by a combination of 18.9% growth in showroom net sales, which includes its kiosks and mobile concierges, and a 20.1% increase in internet channel sales. The company ended last quarter with 230 showrooms, up from 189 at the same point last year.
"Our disruptive Designed For Life platform, commitment to product innovation, compelling marketing, and highly productive omnichannel footprint continue to distinguish our unique brand and engender customer love and loyalty," stated Lovesac CEO Shawn Nelson. Nelson added that Lovesac has enjoyed a strong start to the holiday shopping season and has continued to take market share from competitors as it outperforms in spite of "the challenged category backdrop."
What's next for Lovesac stock?
Even so, Lovesac narrowed its full-year outlook to call for net sales of $710 million to $720 million (from $710 million to $730 million previously); adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $54 million to $62 million (from $51 million to $63 million before); and net income per share of $1.35 to $1.60 (narrowed from $1.21 to $1.75 previously). The midpoints of both ranges are roughly in line with Wall Street's consensus estimates, which call for full fiscal-year earnings of $1.47 per share and revenue of $715 million.
In the end, with shares of this consumer discretionary stock trading roughly flat from where they started the calendar year, it seems the market is breathing a sigh of relief that broader macroeconomic headwinds haven't impacted Lovesac as much as previously feared.
