Lovesac Delivers Blowout Q1 Earnings; Shares Rise


The omni-channel, technology-driven furniture retailer, The Lovesac Company (LOVE), delivered blowout quarterly results driven by increased showroom sales, with all showrooms being fully operational in the reported quarter compared to COVID-19 related temporary closures in the prior-year period. Shares rose 2% to close at $83.42 on June 9.

Earnings for the quarter stood at $0.13 per share, compared to a loss of $0.58 per share in the prior-year period. Earnings outpaced analysts’ estimated loss of $0.58 per share.

Net sales came in at $82.92 million, up 52.5% year-over-year, and surpassed the Street’s estimate of $75.06 million.

Total comparable sales, including showroom and internet sales, grew 48.8% year-over-year. (See Lovesac stock analysis on TipRanks)

Shawn Nelson, the company’s CEO said, “Our strong first quarter performance affirms the confluence of two highly-favorable dynamics in Lovesac’s evolution. The first is that we are providing a great customer experience… The second is that the pandemic tailwinds continue within the home furnishings category itself and our teams are executing across the board to strengthen the Lovesac brand and value proposition in this environment.”

Following the results, Stifel Nicolaus analyst Lamont Williams reiterated a Buy rating to the stock with a price target of $105, which implies 25.9% upside potential to current levels.

Williams said, “We believe millennials, the largest generation in the U.S., will be attracted to the company’s Designed for Life philosophy… The company has a long growth runway ahead given limited brand awareness and low market share. In addition, Lovesac will launch a new product in a tangential home category that will expand the target addressable market.”

Lovesac shares have exploded 291.3% over the past year, while the stock still scores a Strong Buy consensus rating based on 7 unanimous Buys. The LOVE average analyst price target of $90 implies 7.9% upside potential from current levels.

LOVE scores an 8 of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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