Lovesac Swings to Q2 Profit on $21M Tariff Refund; Raises FY27 EPS Outlook
LOVE sits 56% above its 52-week low of $10.33 on elevated volume (2.6× avg).
Summary
Lovesac reported Q2 FY27 net income of $7.4M ($0.51/share) versus a year-ago loss, boosted by a $21M tariff refund. FY27 EPS guidance raised to $0.98–$1.26, but underlying margins and comparable sales remain weak.
Key Events · Earnings and Guidance · LOVE
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Q2 Swings to Profit on Tariff Refund
Net income of $7.4M ($0.51 diluted EPS) vs a $6.7M loss last year, driven by a $21.0M IEEPA tariff refund — $20.0M recognized in cost of merchandise sold.
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Underlying Margins Still Under Pressure
Excluding the tariff refund, gross margin fell 40 bps to 56.0%; adjusted EBITDA was negative $1.3M for the quarter.
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FY27 Guidance Raised
Full-year net income guidance raised to $14.5–18.5M and diluted EPS to $0.98–$1.26, but the range includes the one-time tariff benefit.
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Q3 Expected to Return to Loss
Q3 FY27 guidance calls for net sales of $140–150M and a net loss of $9–12M ($0.62–$0.83 basic loss per share).
Analysis · LOVE · Trade & Services
Lovesac delivered a record Q2 with net income of $7.4 million, or $0.51 per diluted share, versus a $6.7 million loss a year ago. The swing was driven almost entirely by a $21.0 million IEEPA tariff refund — $20.0 million of which flowed through cost of goods sold, lifting gross margin to 68.4% from 56.4%. Excluding the refund, gross margin actually fell 40 basis points to 56.0%, and adjusted EBITDA was negative $1.3 million. The company raised full-year EPS guidance to $0.98–$1.26, but that range also includes the one-time tariff benefit. Underlying demand remains soft: comparable sales fell 1.9% and total sales rose just 0.4%. The balance sheet is healthy with $68.8 million in cash and no debt, but the core business is still burning cash on an adjusted basis.
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At the time of this filing, LOVE was trading at $16.14 on NASDAQ in the Trade & Services sector, with a market capitalization of approximately $234.7M. The 52-week trading range was $10.33 to $20.87. This filing was assessed with neutral market sentiment and an importance score of 7 out of 10.