The US-based company Lovesac, specialised in two main products: "Sacs," which are oversized, ultra-soft bean bag chairs, and "Sactionals," a customisable, modular sofa system, recently announced its financial results for the second quarter of fiscal 2025.
Highlights for the quarter ended August 4, 2024 include net sales, which increased by $2.1 million, or 1.3%, compared to the prior year period, driven mainly by the net addition of 31 new showrooms. This was partially offset by a 5.4% decrease in omni-channel comparable net sales.
Shawn Nelson, Chief Executive Officer, stated, 'Our second quarter results were inline with
our expectations as we continued to drive market share gains amidst a challenging industry
backdrop. We are pleased with the incredible reception we have seen with the product
innovation we have delivered recently through our PillowSac Accent Chair as well as our
newly launched AnyTable. We are excited to continue to build on the momentum we are
driving through expanding our offering, and while we are prudently planning for the second
half of the year given the category headwinds, we believe we are well positioned to deliver
on our objectives for both the near- and long-term.'
Photo: Lovesac.
During the quarter, the company opened 10 new showrooms and closed 2. Gross profit remained flat, but gross margin decreased by 80 basis points to 59.0% from 59.8% in the prior year.
Operating loss was $8.4 million, compared to $1.0 million in the prior year. Operating margin was (5.3)% of net sales, compared to (0.7)% in the previous year.
Net loss for the quarter was $5.9 million, or $(0.38) per share, compared to $0.6 million, or $(0.04) per share, in the prior year.
Highlights for the year-to-date period ended August 4, 2024 include the decease of net sales by $6.5 million, or 2.2%, in the first half of fiscal 2025 compared to the prior year, mainly due to a 10.0% drop in omni-channel comparable net sales, though offset by the net addition of 31 new showrooms.
Cash and cash equivalents were $72.1 million, up from $54.7 million as of July 30, 2023. There was no balance on the Company's line of credit, which had $36.0 million available. On July 29, 2024, the credit agreement was amended to add an uncommitted accordion feature, allowing a potential $10 million increase in the revolving credit facility and extending the maturity date to July 29, 2029.
Total merchandise inventory was $88.3 million, down from $105.0 million due to a planned inventory reduction and decreased freight capitalization.
More information:
Lovesac
www.lovesac.com