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The Lovesac Co. (NASDAQ:LOVE) received a reiterated buy rating and $24.00 price target from DA Davidson on Friday. According to InvestingPro data, analysts maintain a strong buy consensus with price targets ranging from $24 to $38, suggesting significant upside potential from the current price of $16.81.
The furniture retailer reported first-quarter earnings that exceeded expectations on both revenue and profit, continuing the improving trend observed at the end of the previous quarter. Sales reached the midpoint of the company’s plan and featured the first positive comparable sales in more than a year, while EBITDA hit the high end of projections. InvestingPro analysis shows the company maintains healthy financials with a current ratio of 1.6 and has been profitable over the last twelve months, generating $31.37 million in EBITDA.
The company achieved these results despite lower-than-expected gross margins due to discounting activities. Lovesac maintained its full-year guidance, which DA Davidson viewed as a positive signal amid the challenging retail environment.
For the second quarter of fiscal 2025, Lovesac provided what DA Davidson characterized as a "mixed" initial outlook, with revenue expectations in line with projections but a lower EBITDA forecast than anticipated.
The current outlook continues to suggest a significant performance improvement in the second half of the fiscal year, which DA Davidson noted "does add some risk to the story" for the specialty furniture company known for its modular seating systems.
In other recent news, Lovesac Co. reported its fiscal first-quarter results, revealing a revenue of $138.37 million, which was slightly below analyst estimates but represented a 4.3% increase compared to the previous year. The company also reported a loss of $0.73 per share, which was better than the expected $0.80 loss. Despite these figures, Lovesac’s full-year guidance fell short of analyst expectations, projecting earnings per share between $0.80 and $1.36 and revenue between $700 million and $750 million. For the second quarter, the company expects revenue between $157 million and $166 million, aligning with consensus estimates, but forecasts a loss per share significantly worse than expected.
Lovesac highlighted its strategic focus on showrooms, which saw an 18% year-over-year sales growth, and the launch of its EverCouch product line, which has received positive initial feedback. The company plans to expand this product to about 100 showrooms later this summer. Canaccord Genuity reiterated its Buy rating on Lovesac, maintaining a $30 price target, citing the company’s market share gains and evolving product portfolio as key strengths. Despite the challenges, Lovesac remains committed to its fiscal year 2026 outlook, anticipating gross margin expansion in the latter half of the year as tariff-related costs decrease.
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