Shares of The Lovesac Company (NASDAQ:LOVE) are down sharply during Thursday’s premarket trade after the company reported mixed Q4 results but set Q1 and FY25 guidance below Wall Street’s expectations.
For the quarter ended Feb 4, Lovesac (LOVE) earned a profit of $1.87 per share, up from $1.65 in the same quarter last year, beating expectations by three cents. Total sales increased 5% to $250.5M but missed estimates by $13.85M. Adjusted EBITDA increased to $48.4M while the company’s gross margin widened 360 basis points to 59.7% from 56.1%. Within categories, omni-channel sales, which includes all retail locations and online, were down 4.1% while internet sales increased by a modest 2.2%.
On the company’s balance sheet, cash and cash equivalents doubled to $87M and there was $36M available to borrow on its line of credit. Inventory was down by 18% to $98.4M.
Looking ahead, for fiscal 2025 the company expects to earn a profit between $1.06 and $1.59 per share on $700M to $770M in sales. This falls short of estimates for a profit of $2.09 per share on $766.24M in sales. Adjusted EBITDA is expected to be within the range of $46M to $60M compared to $54M in fiscal 2024.
For the first quarter, Lovesac (LOVE) expects to post a loss between $0.84 to $1.03 per share on $126M to $132M in sales. The Street expects a more modest loss of $0.21 per share on $150.4M in sales. Adjusted EBITDA is expected to be a loss between $13M to $16M.
Despite the downbeat outlook, the company’s CEO put a positive spin on the company’s future.
“Lovesac enters 2025 in a position of strength with a truly massive opportunity ahead. We’re primed to over-participate in an eventual category rebound through continued market share gains drive by our core platform. In addition, this fiscal year, we plan to enhance our core Sactional and Sac platforms with an impressive pace of complementary product innovation launches, positioning us well to build-on our track record of delivering profitable growth,” CEO Shawn Nelson said.
Lovesac (LOVE) shares are down 15% and are lower by 17% year-over-year.
Source link
