NASDAQ$LOVE

The Lovesac Company · Q3 2022 earnings

Q3 2022 earnings · · Investor relations

Briefing

Reported strong momentum across channels, driving net sales growth and improved net income.

Lovesac reported a strong third quarter with a 56.1% increase in net sales and an 11% improvement in net income. The company saw growth across all sales channels, including significant increases in showroom and internet sales. They also launched their new Stealthtech embedded surround sound system.

  • Net sales increased by 56.1% due to higher sales volume and lower promotional discounting.
  • Comparable sales increased 47.1% on top of 53.5% in the prior year period.
  • Net income improved 11% to $2.8 million.
  • Showroom sales increased by nearly 70%, and internet sales increased by nearly 40%.

Headline financials

Total Revenue

$117M

Previous: $74.7M+56.1%
EPS (adj)

$0.17

Previous: $0.16+6.3%
Omni-channel Comparable Net Sales Growth

47.1%

Previous: 53.5%-12.0%
Ending Showroom Count

135

No prior period
Capital Expenditures

-$11.4M

Previous: -$6.67M-70.7%
Free Cash Flow

-$8.63M

Previous: -$4.19M-105.9%
Net Income

$2.75M

Previous: $2.48M+11.0%
Operating Income

$2.97M

Previous: $2.53M+17.3%
Gross Profit

$58.6M

Previous: $41.3M+41.9%
Cash & Equivalents

$47.9M

Previous: $47.7M+0.4%
Total Assets

$293M

Previous: $151M+93.8%
Stock-Based Comp

$1.11M

Previous: $1.06M+4.5%

Revenue & EPS history

Lovesac · Revenue · Quarterly

$117M

Q3 2022+56.1%vs Q3 2021
Beat estimate in 8 of 15 quarters(53%)
ActualEstimate

Revenue by segment

Lovesac · $159 total across 3 segments · Q3 2022

  • Showrooms
    $67.8-100.0%
  • Other
    $52.7-100.0%
  • Internet
    $38.2-100.0%

Forward guidance

The company is pleased with its strong start to the holiday season and is confident in its in-stock position to meet fourth quarter demand.

Tailwinds

  • Strong start to the all-important holiday season.
  • Confident in in-stock position to meet fourth quarter demand.
  • Looking forward to delivering an elevated customer experience across channels during the busiest time of year.
  • Looking forward to closing out fiscal 2022.
  • Unique business model with a concentrated sku count and redundant manufacturing spread across multiple geographies, delivering customers’ orders within days.

Headwinds

  • Macro supply chain disruption.
  • Increase of approximately 748 basis points in total distribution and related tariff expenses.
  • 953 basis point increase in inbound container freight costs.
  • Increased tariffs related to higher product sourcing from China.
  • Deleverage in employment costs and travel.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 18 quarterly earnings reports · overlaid with Q3 2022

Historical avgQ3 2022

+3.8%

Avg return

Earnings day

+2.2%

Avg return

5 days after

+10.2%

Avg return

30 days after

50%

16 / 32 earnings

Positive

+72.0%

Q4 2020

Best reaction

-30.1%

Q3 2025

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2027-1.6%-13.7%
Q4 2026+1.2%-4.2%
Q3 2026-7.8%+0.1%+17.2%
Q2 2026-14.8%-13.5%-31.6%
Q1 2026+3.2%+6.6%+6.3%
Q4 2025+16.1%+22.3%+26.2%
Q3 2025-30.1%-29.2%-28.9%
Q2 2025+24.9%+26.8%+23.9%
Q1 2025-6.7%-10.4%+3.8%
Q4 2024-16.4%-17.1%+8.4%
Q3 2024+18.4%+20.8%+19.7%
Q2 2024-4.5%+1.7%+21.7%
Q1 2024-7.3%-8.4%+3.6%
Q4 2023+18.4%+20.4%+12.5%
Q3 2023-15.4%-11.9%+17.7%
Q2 2023-4.9%-12.6%-32.0%
Q1 2023-16.5%-22.5%-13.9%
Q4 2022+15.9%+9.1%-5.3%
Q3 2022+27.3%+17.1%-13.3%
Q2 2022+33.7%+29.2%+42.4%
Q1 2022+6.9%+6.5%-15.6%
Q4 2021-2.8%+1.3%+15.5%
Q3 2021+20.5%+9.1%+40.5%
Q2 2021-9.4%-11.5%+10.0%
Q1 2021+7.9%+4.8%+35.9%
Q4 2020+72.0%+87.1%+133.6%
Q3 2020-25.9%-13.5%-0.6%
Q2 2020+3.0%+11.0%-4.8%
Q1 2020-21.0%-20.7%-29.0%
Q4 2019+33.2%-6.8%+34.7%
Q3 2019+8.9%-1.3%+4.3%
Q2 2019-4.3%-4.9%+2.9%
Q1 2019
Q4 2018
Q3 2018
Q2 2018
Q1 2018
Q4 2016
Q3 2016
Q2 2016
Q1 2016

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