The Lovesac Company (LOVE) Q4 2026 earnings summary

Executive summary

• Achieved 2.4% year-over-year net sales growth to $697.1M, with Q4 net sales up 2.7% to $248M, outpacing a 3.4% category decline.

• Strategic initiatives included a shift to a multi-platform lifestyle brand, new product launches, on-shoring of Sactionals, and expansion into new rooms.

• Maintained full-year profitability, positive free cash flow, and ended with a record cash balance and no debt.

Financial highlights

• FY26 gross margin was 56.4%, with Q4 gross margin at 58.1%, both down due to tariffs and transportation costs.

• FY26 net income was $4.1M, down 64.8% year-over-year, with Q4 net income at $32.1M.

• Adjusted EBITDA for FY26 was $36.1M, with Q4 at $49.6M, both down year-over-year.

• Inventory levels reduced by 14% year-over-year to $106.3M, optimizing working capital.

• Cash and cash equivalents at year-end were $101.9M, up from $83.7M last year.

Outlook and guidance

• FY27 net sales expected between $700M-$750M; adjusted EBITDA $33M-$44M; net income $5M-$14M.

• Gross margin guidance of 56%-57%; advertising/marketing at ~12% of net sales; SG&A at 40%-41%.

• Q1 FY27 net sales guidance of $133M-$139M, with an expected net loss of $14M-$18M.

• Plan to open approximately 8 net new showrooms and invest ~$20M in capital expenditures.