The Lovesac Company (LOVE) Q4 2025 earnings summary

Executive summary

• Fiscal 2025 ended with results at the high end of guidance, driven by strong late-quarter quote conversion, major product launches like the Reclining Seat and PillowSac Accent Chair, and supply chain and CRM enhancements.

• The company codified its long-term strategy, launched the EverCouch platform, and enhanced operational tools for scalable, profitable growth.

• Market share gains continued despite macroeconomic headwinds and a slow holiday start, with optimism for Fiscal 2026 based on product innovation and operational flexibility.

• Heidi Cooley, former Crocs CMO, joined as Chief Brand and Marketing Officer to drive the next phase of growth.

Financial highlights

• Fiscal 2025 revenue was $680.6M, down 2.8% year-over-year, but above December guidance.

• Q4 net sales were $241.5M, down 3.6% year-over-year; Q4 net income rose 14.1% to $35.3M ($2.13 per diluted share).

• Fiscal year net income was $11.6M, down 51.6% year-over-year.

• Q4 gross margin improved to 60.4%, up 70 bps; fiscal year gross margin was nearly 59%, up 120 bps.

• Adjusted EBITDA for Q4 was $53.9M, up 11.4% year-over-year; for the year, it declined 11.5% to $47.8M.

• Free cash flow remained positive, with $83.7M in cash and no borrowings on the credit facility.

• Inventory increased to $124.3M, and $19.9M in share repurchases were completed in the year.

Outlook and guidance

• Fiscal 2026 net sales expected at $700M–$750M, adjusted EBITDA $48M–$60M, and net income $13M–$22M.

• Q1 net sales guidance is $136M–$142M, with an adjusted EBITDA loss of $8M–$12M and net loss of $10M–$13M.

• Guidance assumes a 5% full-year category decline and excludes incremental tariff impacts beyond the previous regime.