Shawn Nelson, Chief Executive Officer, stated, "Our focus on secular growth initiatives such as new products and the beginnings of a major evolution in our marketing, enabled slight year-over-year growth in net sales in the third quarter, reflecting market share gains as compared to our category. As we transitioned into our fiscal fourth quarter, we adjusted our marketing strategies and have seen solid growth quarter-to-date, inclusive of the Black Friday and Cyber Monday holiday events. Lovesac is inventing and investing steadily, even through these tough times for our category, while balancing cash flow generation and profitability. Our tall ambitions begin with reaching our goal of three million Lovesac households by 2030: Households that will have ever-more Designed For Life products across ever-more rooms of the house. We are totally focused and committed to this goal that we believe can produce meaningful growth over the next few years—regardless of what happens in the macro environment."
Key Measures for the Third Quarter of Fiscal 2026 Ending November 2, 2025:(Dollars in millions, except per share amounts. Dollar and percentage changes may not recalculate due to rounding.)
Thirteen weeks ended
Thirty-nine weeks ended
November 2,2025
November 3,2024
% Inc (Dec)
November 2,2025
November 3,2024
% Inc (Dec)
Net sales
Showrooms
$102.7
$91.0
12.8%
$308.2
$271.4
13.6%
Internet
$37.3
$44.9
(16.9%)
$113.1
$125.8
(10.1%)
Other
$10.2
$14.0
(27.3%)
$27.7
$41.9
(33.9%)
Total net sales
$150.2
$149.9
0.2%
$449.1
$439.1
2.3%
Gross profit
$84.2
$87.6
(3.9%)
$249.2
$252.1
(1.1%)
Gross margin
56.1%
58.5%
(240) bps
55.5%
57.4%
(190) bps
Total operating expenses
$100.0
$95.4
4.9%
$288.8
$286.0
1.0%
SG&A
$75.0
$71.7
4.5%
$214.2
$213.8
0.2%
SG&A as a % of Net Sales
49.9%
47.9%
200 bps
47.7%
48.7%
(100) bps
Advertising and marketing
$21.1
$19.9
5.7%
$63.2
$61.3
3.1%
Advertising & marketing as a % of Net Sales
14.0%
13.3%
70 bps
14.1%
13.9%
20 bps
Net loss
$(10.6)
$(4.9)
(114.0%)
$(28.0)
$(23.8)
(18.1%)
Basic net loss per common share
$(0.72)
$(0.32)
(125.0%)
$(1.91)
$(1.53)
(24.8%)
Diluted net loss per common share
$(0.72)
$(0.32)
(125.0%)
$(1.91)
$(1.53)
(24.8%)
Adjusted EBITDA1
$(6.0)
$2.7
(322.9%)
$(13.6)
$(6.1)
(123.1%)
Net cash used in operating activities
$(4.9)
$(4.2)
(15.8%)
$(34.1)
$(5.0)
(575.6%)
1 Adjusted EBITDA is a non-GAAP measure. See "Non-GAAP Information" and "Reconciliation of Non-GAAP Financial Measures" included in this press release.
Percent increase (decrease) except showroom count
Thirteen weeks ended
Thirty-nine weeks ended
November 2,2025
November 3,2024
November 2,2025
November 3,2024
Omni-channel Comparable Net Sales(1)
(1.2)%
(8.3)%
0.4%
(9.1)%
Internet Sales
(16.9)%
12.1%
(10.1)%
3.4%
Ending Showroom Count
275
258
275
258
1 Omni-channel Comparable Net Sales includes sales at all retail locations and online, open greater than 12 months (including remodels and relocations) and excludes closed showrooms.
Highlights for the Quarter Ended November 2, 2025:
Net sales increased $0.3 million, or 0.2%, in the third quarter of fiscal 2026 compared to the prior year period primarily driven by the net addition of 17 new showrooms, partially offset by a decrease of 1.2% in omni-channel comparable net sales. During the third quarter of fiscal 2026, we opened 5 additional showrooms and did not close any showrooms.
Gross profit decreased $3.4 million, or 3.9% in the third quarter of fiscal 2026 compared to the prior year period. Gross margin decreased 240 basis points to 56.1% of net sales in the third quarter of fiscal 2026 from 58.5% of net sales in the prior year period primarily driven by increases of 320 basis points in inbound transportation and tariff costs and 20 basis points in outbound transportation and warehousing costs, partially offset by an increase of 100 basis points in product margin driven by cost reduction initiatives from our vendors in response to changes in the tariff environment.
SG&A expense increased $3.2 million, or 4.5%, in the third quarter of fiscal 2026 compared to the prior year period primarily due to increases in payroll, including an out-of-period expense pertaining to prior periods employee benefits, licenses and registrations, rent, and other overhead costs, partially offset by decreases in legal and professional fees, and equity-based compensation.
Advertising and marketing expense increased $1.1 million, or 5.7% in the third quarter of fiscal 2026 compared to the prior year period, primarily driven by costs associated with the launch of a new product marketing campaign.
Operating loss was $15.8 million in the third quarter of fiscal 2026 compared to $7.7 million in the prior year period. Operating margin was (10.5)% of net sales in the third quarter of fiscal 2026 compared to (5.1)% of net sales in the prior year period.
Net loss was $10.6 million in the third quarter of fiscal 2026 or $(0.72) net loss per common share compared to $4.9 million or $(0.32) net loss per common share in the prior year period. During the third quarter of fiscal 2026, the Company recorded an income tax benefit of $5.0 million, compared to $2.1 million in the prior year period. The change in benefit was primarily driven by a higher net loss before taxes.
Highlights for the Year-to-date ...
