Why Is Home Furnishing Brand Lovesac's Stock Surging Today?

Home furnishing brand The Lovesac Company LOVE shares are surging in premarket on Thursday, after the fourth-quarter earnings.

The company reported a fourth-quarter FY25 revenue decline of 3.6% year-on-year to $241.490 million, beating the analyst consensus estimate of $233.954 million.

Gross profit decreased 2.6% Y/Y to $145.8 million, with the margin expanding 70 basis points to 60.4%. Total comparable sales declined 9.4%. Internet sales dropped 9.7% in the quarter.

Total operating expenses fell 10.1% Y/Y to $98.2 million. The operating income increased 17.8% to $47.6 million and the operating margin expanded 360 basis points to 19.7%.

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Adjusted EBITDA increased 11.4% Y/Y to $53.9 million. EPS of $2.13 topped the consensus of $1.87.

As of July 30, 2023, Lovesac held $54.7 million in cash and equivalents. Net cash provided by operating activities during the quarter totaled $44 million.

“After a slow start to the holiday selling season, strong execution by our teams dramatically improved conversion of customer quotes to sales throughout the remainder of the fourth quarter. This supported a mid-teens year-over-year increase in net income for the quarter and helped close out another year of market share gains for full year Fiscal 2025,” said CEO Shawn Nelson.

Lovesac appointed Heidi Cooley as Chief Brand and Marketing Officer, effective April 23, 2025. 

Outlook: For the first quarter Lovesac sees EPS of $(0.66) – $(0.85) versus the Street view of $(0.77) and sales of $136 million – $142 million against the estimate of $138.60 million.

The company expects FY26 EPS of $0.80 – $1.36 versus the estimate of $1.10 and sales of $700 million – $750 million versus the estimate of $713.05 million.

Price Action: LOVE shares traded higher by 16.38% at $18.54 in premarket at last check Thursday.

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