The Lovesac Company (LOVE) Q2 2026 Earnings Report

- Revenue: $160.5 million in QQ2 2026, up 2.5% YoY; QoQ growth of ~16.0% (Q1 to Q2) driven by showroom expansion and stabilized e-commerce contributions. - Gross margin: 56.4% in QQ2 2026, down 260 basis points YoY due to higher inbound/outbound logistics costs and promotional activity; product margin weakness attributed to higher promotional discounts. - Operating performance: QQ2 2026 operating loss of $8.8 million; net loss of $6.7 million or $(0.45) per share; adjusted EBITDA of $0.8 million. - Profitability mix: SG&A as a % of net sales improved to 40.9% from 47% YoY, reflecting tighter expense management and lower Best Buy costs during the transition. - Channel and mix: Showroom net sales rose 10.4% to $109.1 million with 16 new showrooms added; internet sales declined 4.1% to $42.5 million; other net sales declined 33.6% to $9.0 million as barter transactions were reduced. - Balance sheet and liquidity: Cash and cash equivalents of $34.2 million; committed availability of ~$36 million; no borrowings on the credit facility; total debt of $193.5 million; net debt of $159.3 million. Total assets $493.7 million; stockholders’ equity $197.5 million. - Guidance: Full-year FY2026 net sales guidance narrowed to $710–$740 million; adjusted EBITDA guidance of $42–$55 million; gross margin target of 57–58%; Q3 outlook anticipates a net sales range of $151–$161 million and adjusted EBITDA between -$1 million and -$7 million.

- Strategy and brand evolution: The CEO Sebastian Nelson (Shawn Nelson) emphasized shifting from a product-centric model to a true brand with Brand Evolution (Brand EVO) and a prioritized product hierarchy, including the EverCouch transition to Snug by The Lovesac Company. He highlighted that the brand refresh is designed to unlock multi-room growth and deepen market share in a down furniture category. He stated: “This brand evolution work has laid a clear and reliable foundation… to build The Lovesac Company into a multifaceted home brand.”
- Snug launch and channel expansion: Mary Fox outlined the Snug rollout (soft launch in 27 showrooms, expanded to ~100 locations) and a formal marketing campaign featuring Britney Snow, with the aim of growing the living room category into a broader brand framework and online/offline channels. She noted that “Initial results from the soft launch look promising, and this will build as we’ve already expanded the number of showrooms in quarter two to 100 and growing.”
- Tariff mitigation and pricing strategy: Management discussed a four-point tariff mitigation plan (cost concessions, manufacturing diversification away from China, strategic pricing, cost efficiency). Mary referenced tariff headwinds as a material driver of margin pressure and Keith elaborated that gross margins would be pressured by tariffs and promotional activity in the near term, with plans to recover margins in 2024–2025 through outbound logistics optimization and country-of-origin realignment. She stated: “The four-point mitigation plan will mitigate the majority of the current tariff pressures.”
- Best Buy exit and Costco pilots: The company completed its Best Buy exit ahead of plan and under budget, while expanding Costco demonstrations with StealthTech, indicating a continued emphasis on high-value partnerships and curated showrooms.
- e-commerce and resale: The Love to Buy Love Sac resale platform expanded to five additional states, with a pilot for trading capability planned later this year and full rollout next year, reflecting a broader approach to customer lifetime value and sustainable resale economics.

The Lovesac Company is navigating a challenging near-term environment characterized by tariff-driven margin pressure and a down furniture category, while actively investing in brand-driven growth opportunities. The QQ2 2026 results underscore the company’s ability to defend topline through showroom expansion and a diversified channel mix, while margins remain a focus for recovery. The long-term thesis hinges on successful execution of Brand EVO and the Snug platform, expansion of online/offline channels (including Costco and resale channels), and margin normalization through logistics efficiencies and sourcing realignment. If tariff relief and housing turnover improve or if the company sustains its higher-margin mix and disciplined cost structure, Lovesac could realize meaningful upside beyond the current guidance. Key factors to monitor include tariff trajectory, the pace and profitability of Snug channel expansion, the evolution of the brand’s messaging and customer acquisition efficiency, and the potential ramp in domestic manufacturing that could deliver structural margin benefits.