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Lovesac (LOVE) Q4 Earnings & Net Sales Miss Estimates, Up Y/Y
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The Lovesac Company (LOVE - Free Report) reported mixed results in fourth-quarter fiscal 2024 (ended Feb 4, 2024), with earnings and net sales missing the Zacks Consensus Estimate. However, the metrics increased on a year-over-year basis.
This strong performance is attributed to the company's focus on strengthening its unique omnichannel infinity flywheel, reinforcing its designed-for-life platform, investing in genuine innovation and making strategic investments to scale the business profitably.
For the fiscal 2025, the company is poised to over-participate in an eventual category rebound through continued market share gains driven by its core platform in fiscal 2025. Additionally, this fiscal year, the company plans to enhance its core Sactional and Sac platforms with a rapid pace of complementary product innovation launches to drive growth.
Following the earnings release, Lovesac’s shares declined 11.2% during the trading hours on Apr 11.
Inside the Numbers
In the fiscal fourth quarter, the company reported adjusted earnings of $1.87 per share, missing the Zacks Consensus Estimate of $1.93 by 3.1%. Lovesac reported adjusted earnings per share (EPS) of $1.65 in the prior-year quarter.
The Lovesac Company Price, Consensus and EPS Surprise
Net sales of $250.5 million missed the consensus estimate of $265.9 million by 5.8%. The metric increased 5% from the year-ago quarter’s figure. The upside was driven by new showroom openings and growth within internet channels, partially offset by a decline in omnichannel comparable net sales.
Operating Highlights
The gross margin expanded 360 basis points (bps) year over year to 59.7%. The upside can be attributed to a contraction of 550 bps in inbound transportation costs, partially offset by an increase of 100 bps in outbound transportation and warehousing costs, along with a 90 bps decline in product margin due to higher promotional discounting.
Selling, general and administrative expenses, as a percent of net sales, increased 170 bps to 30.5% from the prior-year quarter’s levels. The increase was due to investments in payroll, selling-related expenses, infrastructure, restatement-related costs and other professional fees.
Advertising & marketing expenses, as a percentage of net sales, increased 100 bps year over year to 11.8%.
Adjusted EBITDA was $48.4 million, up 3.6% year over year.
Fiscal 2024 Highlights
For the fiscal year, Lovesac reported net sales of $700.3 million, up from $651.2 million reported in the fiscal 2023. Adjusted EPS of $1.45 was down from $1.66 reported a year ago.
Adjusted EBITDA in fiscal 2024 was $54 million, down from $58.3 million reported in the prior year. Net income of $23.9 million was down from $26.5 million reported a year ago.
Financial Highlights
As of Feb 4, 2024, the company had cash and cash equivalents of $87 million compared with $43.5 million at the end of fiscal 2023. Net cash provided by operating activities totaled $76.4 million in the fiscal 2024, against net cash used of $21.4 million reported in the year-ago period.
Q1 Guidance
For the first quarter of fiscal 2025, the company expects net sales in the range of $126 to $132 million and adjusted EBITDA in the range of $13 million and $16 million. In first-quarter fiscal 2024, the company reported net sales of $141.2 million and an adjusted EBITDA loss of $2.4 million.
The company expects net loss in the range of $13-$16 million. In the year-ago period, the company reported a net loss of $4.2 million.
Fiscal 2025 Guidance Unveiled
For the fiscal 2025, the company expects net sales in the range of $700-$770 million.
Adjusted EBITDA is expected to be in the range of $46-$60 million. The company expects net income of $18-$27 million.
Diluted income per common share is expected to be $1.06 to $1.59 on approximately 17 million estimated diluted weighted average shares outstanding.
Fastenal Company (FAST - Free Report) reported first-quarter 2024 results, with earnings and net sales missing the Zacks Consensus Estimate. The adverse weather conditions and the impact of customer and product mix have affected Fastenal's quarterly results.
Williams-Sonoma Inc. (WSM - Free Report) reported results for the fourth quarter of fiscal 2023 (ended Jan 28, 2024). In the quarter, earnings and net revenues beat the Zacks Consensus Estimate but declined year over year.
The quarterly results reflect low contributions from the company’s reportable brands, including Pottery Barn, West Elm, and Pottery Barn Kids and Teen. The downtrend was due to ongoing softness in the housing market and geopolitical uncertainties. Also, an increase in occupancy costs, along with employment and general expenses, added to the downtrend.
Darden Restaurants, Inc. (DRI - Free Report) reported dismal third-quarter fiscal 2024 results, with earnings and revenues missing the Zacks Consensus Estimate. The metrics increased on a year-over-year basis.
DRI provided a lower-than-expected sales outlook for fiscal 2024. Management cited concerns relating to a challenging operating environment.
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Lovesac (LOVE) Q4 Earnings & Net Sales Miss Estimates, Up Y/Y
The Lovesac Company (LOVE - Free Report) reported mixed results in fourth-quarter fiscal 2024 (ended Feb 4, 2024), with earnings and net sales missing the Zacks Consensus Estimate. However, the metrics increased on a year-over-year basis.
This strong performance is attributed to the company's focus on strengthening its unique omnichannel infinity flywheel, reinforcing its designed-for-life platform, investing in genuine innovation and making strategic investments to scale the business profitably.
For the fiscal 2025, the company is poised to over-participate in an eventual category rebound through continued market share gains driven by its core platform in fiscal 2025. Additionally, this fiscal year, the company plans to enhance its core Sactional and Sac platforms with a rapid pace of complementary product innovation launches to drive growth.
Following the earnings release, Lovesac’s shares declined 11.2% during the trading hours on Apr 11.
Inside the Numbers
In the fiscal fourth quarter, the company reported adjusted earnings of $1.87 per share, missing the Zacks Consensus Estimate of $1.93 by 3.1%. Lovesac reported adjusted earnings per share (EPS) of $1.65 in the prior-year quarter.
The Lovesac Company Price, Consensus and EPS Surprise
The Lovesac Company price-consensus-eps-surprise-chart | The Lovesac Company Quote
Net sales of $250.5 million missed the consensus estimate of $265.9 million by 5.8%. The metric increased 5% from the year-ago quarter’s figure. The upside was driven by new showroom openings and growth within internet channels, partially offset by a decline in omnichannel comparable net sales.
Operating Highlights
The gross margin expanded 360 basis points (bps) year over year to 59.7%. The upside can be attributed to a contraction of 550 bps in inbound transportation costs, partially offset by an increase of 100 bps in outbound transportation and warehousing costs, along with a 90 bps decline in product margin due to higher promotional discounting.
Selling, general and administrative expenses, as a percent of net sales, increased 170 bps to 30.5% from the prior-year quarter’s levels. The increase was due to investments in payroll, selling-related expenses, infrastructure, restatement-related costs and other professional fees.
Advertising & marketing expenses, as a percentage of net sales, increased 100 bps year over year to 11.8%.
Adjusted EBITDA was $48.4 million, up 3.6% year over year.
Fiscal 2024 Highlights
For the fiscal year, Lovesac reported net sales of $700.3 million, up from $651.2 million reported in the fiscal 2023. Adjusted EPS of $1.45 was down from $1.66 reported a year ago.
Adjusted EBITDA in fiscal 2024 was $54 million, down from $58.3 million reported in the prior year. Net income of $23.9 million was down from $26.5 million reported a year ago.
Financial Highlights
As of Feb 4, 2024, the company had cash and cash equivalents of $87 million compared with $43.5 million at the end of fiscal 2023. Net cash provided by operating activities totaled $76.4 million in the fiscal 2024, against net cash used of $21.4 million reported in the year-ago period.
Q1 Guidance
For the first quarter of fiscal 2025, the company expects net sales in the range of $126 to $132 million and adjusted EBITDA in the range of $13 million and $16 million. In first-quarter fiscal 2024, the company reported net sales of $141.2 million and an adjusted EBITDA loss of $2.4 million.
The company expects net loss in the range of $13-$16 million. In the year-ago period, the company reported a net loss of $4.2 million.
Fiscal 2025 Guidance Unveiled
For the fiscal 2025, the company expects net sales in the range of $700-$770 million.
Adjusted EBITDA is expected to be in the range of $46-$60 million. The company expects net income of $18-$27 million.
Diluted income per common share is expected to be $1.06 to $1.59 on approximately 17 million estimated diluted weighted average shares outstanding.
Zacks Rank
Lovesac currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Retail-Wholesale Releases
Fastenal Company (FAST - Free Report) reported first-quarter 2024 results, with earnings and net sales missing the Zacks Consensus Estimate. The adverse weather conditions and the impact of customer and product mix have affected Fastenal's quarterly results.
Williams-Sonoma Inc. (WSM - Free Report) reported results for the fourth quarter of fiscal 2023 (ended Jan 28, 2024). In the quarter, earnings and net revenues beat the Zacks Consensus Estimate but declined year over year.
The quarterly results reflect low contributions from the company’s reportable brands, including Pottery Barn, West Elm, and Pottery Barn Kids and Teen. The downtrend was due to ongoing softness in the housing market and geopolitical uncertainties. Also, an increase in occupancy costs, along with employment and general expenses, added to the downtrend.
Darden Restaurants, Inc. (DRI - Free Report) reported dismal third-quarter fiscal 2024 results, with earnings and revenues missing the Zacks Consensus Estimate. The metrics increased on a year-over-year basis.
DRI provided a lower-than-expected sales outlook for fiscal 2024. Management cited concerns relating to a challenging operating environment.