Lovesac Slashes Sales Forecast Amid Tariff Woes

Lovesac announced a net loss of $11.1 million for its first fiscal quarter of 2026. The company also revised its full-year sales guidance downwards, now expecting between $700 million and $740 million, a $10 million reduction from previous projections. This adjustment reflects ongoing tariff pressures impacting the company's cost structure.

The quarterly results showed a net loss of $0.76 per share, which was better than analyst expectations. Revenue for the quarter was $138.2 million, slightly surpassing consensus estimates. Gross margin decreased to 52.1% from 53.7% a year ago, primarily due to higher inbound transportation and tariff costs.

Despite a sales decline driven by the closure of Best Buy shop-in-shop locations, Lovesac expanded its showroom count to 281 and experienced a 7.1% increase in internet sales. CEO Shawn David Nelson expressed optimism, highlighting upcoming product launches and domestic production of seat inserts as drivers for future growth.

Looking ahead to the second quarter, Lovesac projects revenue between $157 million and $166 million, with a net loss anticipated between $3 million and $7 million. The company's cash reserves stood at $57.0 million as of May 3, showing an increase from the prior year.