Lovesac Co
For the period ended May 3, 2026. Filed Jun 11, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
May 3, 2026 · Filed Jun 11, 2026
LOVE$15.80-4.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-11-02; filed 2025-12-11.
0001628280-25-056423
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-05-03; filed 2026-06-11.
0001628280-26-042366
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 114 previous paragraphs and 98 current paragraphs.
55 unchanged; 36 reworded; 5 added; 18 removed; 5 previous and 2 current paragraphs rearranged.
Tables are not compared: 4 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Tariff Refunds
Current report
In April , 2026, we filed for refunds of previously paid tariffs assessed under the International Emergency Economic Powers Act. As of May 3, 2026, due to the uncertainty surrounding the ultimate receipt and amount of these refunds, we have not recorded a receivable or any related reduction to cost of merchandise sold or inventories in our condensed financial statements for the first quarter of fiscal 2027. Any benefit from these refunds will be recognized in the period the refunds are received. See Note 6. Commitments and Contingencies in the notes to the condensed financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, for more information.
Current report
We are pursuing initiatives to increase domestic manufacturing of Sactionals (or certain products) as part of our broader supply chain strategy. These efforts are intended to enhance supply chain reliability, mitigate tariff and logistics risks, and improve operational efficiency through automation and reduced transportation distances. Implementation is expected to occur in phases and requires upfront investment and operational execution. The ultimate impact on our cost structure and operating results will depend on a number of factors, and there can be no assurance that anticipated benefits will be realized.
Current report
Showroom net sales increased $0.6 million, or 0.6%, in the thirteen weeks ended May 3, 2026 compared to the prior year period.
Current report
Advertising and marketing expenses decreased $2.0 million, or 10.7%, in the thirteen weeks ended May 3, 2026 compared to the prior year period, primarily due to the strategic timing of marketing investments and continued emphasis on efficiency. Advertising and marketing expenses were 12.0% of net sales in the thirteen weeks ended May 3, 2026 compared to 13.4% of net sales in the prior year period.
Removed paragraphs (18)
Previous report
Showroom net sales increased $11.7 million, or 12.8%, in the thirteen weeks ended November 2, 2025 compared to the prior year period.
Previous report
Advertising and marketing expenses increased $1.1 million, or 5.7%, in the thirteen weeks ended November 2, 2025 compared to the prior year period. Advertising and marketing expenses were 14.0% of net sales in the thirteen weeks ended November 2, 2025 compared to 13.3% of net sales in the prior year period.
Previous report
Thirty-nine weeks ended November 2, 2025 compared to the thirty-nine weeks ended November 3, 2024
Previous report
Net sales
Previous report
Net sales increased $9.9 million, or 2.3%, in the thirty-nine weeks ended November 2, 2025 compared to the prior year period driven by an increase of 0.4% in omni-channel comparable net sales and new showroom openings. In the thirty-nine weeks ended November 2, 2025, the numbers of repeat customers increased by 8.9%, partially offset by a 8.5% decline in new customers. In the comparable prior year period, the number of repeat and new customers increased by 19.5% and 4.2%, respectively.
Previous report
Showroom net sales increased $36.8 million, or 13.6%, in the thirty-nine weeks ended November 2, 2025 compared to the prior year period.
Previous report
Other net sales, which include pop-up-shop sales, shop-in-shop sales, barter inventory transactions, and the Loved by Lovesac program, decreased $14.2 million, or 33.9%, in the thirty-nine weeks ended November 2, 2025 compared to the prior year period. The decrease was primarily attributable to the Company’s decision not to engage in any barter transactions during the current period, and the closure of the Company's Best Buy shop-in-shop locations as a result of the discontinuation of its partnership with Best Buy.
Previous report
Gross profit
Previous report
Selling, general and administrative expenses
Previous report
SG&A expenses increased $0.4 million, or 0.2%, in the thirty-nine weeks ended November 2, 2025 compared to the prior year period. The increase was primarily related to increases of $6.9 million in payroll, including an out-of-period $1.6 million expense pertaining to prior periods employee benefits, $1.7 million in rent, $1.5 million in equity-based compensation, and $1.5 million in impairment charges related to the Best Buy partnership discontinuation. The increases were partially offset by decreases of $8.9 million in legal and professional fees, $1.3 million in credit card fees, and $1.0 million in other overhead costs. As a percentage of net sales, SG&A was 47.7% in the thirty-nine weeks ended November 2, 2025, compared to 48.7% in the prior year period.
Previous report
Advertising and Marketing
Previous report
Advertising and marketing expenses increased $1.9 million, or 3.1%, in the thirty-nine weeks ended November 2, 2025 compared to the prior year period. Advertising and marketing expenses were 14.1% of net sales in the thirty-nine weeks ended November 2, 2025 compared to 13.9% of net sales in the prior year period.
Previous report
Depreciation and amortization expenses
Previous report
Depreciation and amortization expenses increased $0.5 million, or 4.8%, in the thirty-nine weeks ended November 2, 2025 compared to the prior year period primarily driven by capital investments for new showrooms.
Previous report
Interest and other income, net
Previous report
Income tax benefit
Previous report
Our primary sources of liquidity are cash flows from operations, our current balances of cash and cash equivalents and our revolving line of credit (see “Revolving Line of Credit” below). At November 2, 2025, we had $23.7 million in cash and cash equivalents. We have pursued in the past, and may pursue in the future, additional strategies to generate capital to pursue opportunities and investments, including through issuing equity and/or debt securities. To the extent we choose to secure additional sources of liquidity through incremental equity or debt financing, there can be no assurances that we will be able to raise such financing on favorable terms, if at all, or that future financing requirements will not require us to raise money that could be dilutive to holders of our capital stock.
Previous report
On March 24, 2023, we amended the credit agreement to, among other things, extend the maturity date to September 30, 2024. On July 29, 2024, we amended the credit agreement to add an uncommitted accordion feature that allows the Company, subject to certain customary conditions, to increase the size of the revolving credit facility by $10 million and, among other things, extend the maturity date of the loans made under the credit agreement from September 30, 2024 to July 29, 2029.
Reworded paragraphs (36)
Previous wording
We are a technology driven company that designs, manufactures and sells unique, high quality furniture derived through our proprietary "Designed for Life" approach which results in products that are built to last a lifetime and designed to evolve as our customers’ lives do. Our current product offering is comprised of modular couches called Sactionals, premium foam beanbag chairs called Sacs, the immersive surround sound home theater system called StealthTech, the PillowSac TM Chair, the Sactionals Reclining Seat and the most recently launched platform of premium seating called Snugg™. Innovation is at the center of our design philosophy with all of our core products protected by a robust portfolio of utility patents. We market and sell our products through an omni-channel platform that includes direct-to-consumer touch points in the form of our own showrooms, kiosks, and online directly at www.lovesac.com. We believe that our ecommerce centric approach, coupled with our ability to deliver our large upholstered products through express couriers, is unique to the furniture industry.
Current wording
We are a technology driven company that designs, manufactures and sells unique, high quality furniture derived through our proprietary Designed for Life® approach which results in products that are built to last a lifetime and designed to evolve as our customers’ lives do. Our current product offering is comprised of modular couches called Sactionals®, premium foam beanbag chairs called Sacs®, the immersive surround sound home theater system called StealthTech®, the PillowSac® Chair, the Sactionals Reclining Seat, a recently launched platform of premium seating called Snugg™, and various accessories. Innovation is at the center of our design philosophy with all of our core products protected by a robust portfolio of utility and design patents. We market and sell our products through an omni-channel platform that includes direct-to-consumer touch points in the form of our own showrooms and online directly at www.lovesac.com. We believe that our ecommerce centric approach, coupled with our ability to deliver our large upholstered products through express couriers, is unique to the furniture industry.
Previous wording
There are a number of macroeconomic factors and uncertainties that in recent years have negatively affected the overall business environment and our business, including fluctuations in inflation, elevated interest rates, housing market conditions, consumer debt and available credit, increased tariff and trade restrictions, global conflicts and uncertainties in the global financial markets. These factors have had and continue to have a negative impact on us and the markets in which we operate, including the potential for an economic recession, a continued downturn in the housing market, and a reduction in consumer discretionary spending. We believe that these macroeconomic factors have contributed to the slowdown in demand that we have experienced in our business which may continue in future periods. We will continue to evaluate our sources and uses of capital to reflect changes in market conditions and our business, including further developments with respect to macroeconomic factors.
Current wording
There are a number of macroeconomic factors and uncertainties that in recent years have negatively affected the overall business environment and our business, including fluctuations in inflation, elevated interest rates, housing market conditions, consumer debt and available credit, increased tariff and trade restrictions, global conflicts and uncertainties in the global financial markets. These factors have had and continue to have a negative impact on us and the markets in which we operate, including the potential for an economic recession, a continued downturn in the housing market, and a reduction in consumer discretionary spending. We believe that these macroeconomic factors have contributed to the slowdown in demand that we have experienced in our business which may continue in future periods.
Previous wording
•Sactionals. Our Sactional product line currently represents a majority of our net sales. We believe our Sactionals platform is unlike competing products in its adaptability yet is comparable aesthetically to similarly priced premium couches and sectionals. Our Sactional products include a number of patented features relating to their geometry and modularity, coupling mechanisms and other features. Utilizing primarily two, standardized pieces, “seats” and “sides,” and approximately 200 high quality, tight-fitting cover options that are removable, washable, and changeable, customers can create numerous permutations of a sectional couch with minimal effort. Customization is further enhanced with our specialty-shaped modular offerings, such as our wedge seat, angled sides and roll or swept arms. In September 2024, we launched the AnyTable TM, a versatile table that seamlessly enhances any Sactionals living space, and in November 2024, we launched the Sactionals Reclining Seat, an innovation that integrates advanced reclining technology and delivers unparalleled comfort and flexibility while maintaining the sleek, sophisticated aesthetic of our Sactionals. Our custom features and accessories can be added easily and quickly to a Sactional to meet endless design, style, storage and utility preferences, reflecting our Designed for Life philosophy. Sactionals are built to meet the highest durability and structural standards applicable to fixed couches. Sactionals are comprised of standardized units and we guarantee their compatibility over time, which we believe is a major pillar of their value proposition to the consumer. Our Sactionals represented 90.3% and 91.4% of our net sales for the thirteen weeks ended November 2, 2025 and November 3, 2024, respectively, and 91.8% and 91.5% of our net sales for the thirty-nine weeks ended November 2, 2025 and November 3, 2024, respectively.
Current wording
•Sactionals. Our Sactional product line currently represents a majority of our net sales. We believe our Sactionals platform is unlike competing products in its adaptability yet is comparable aesthetically to similarly priced premium couches and sectionals. Our Sactional products include a number of patented features relating to their geometry and modularity, coupling mechanisms and other features. Utilizing primarily two, standardized pieces, “seats” and “sides,” and approximately 200 high quality, tight-fitting cover options that are removable, washable, and changeable, customers can create numerous permutations of a sectional couch with minimal effort. Customization is further enhanced with our specialty-shaped modular offerings, such as our wedge seat, angled sides and roll or swept arms. In September 2024, we launched the AnyTable®, a versatile table that seamlessly enhances any Sactionals living space, and in November 2024, we launched the Sactionals Reclining Seat, an innovation that integrates advanced reclining technology and delivers unparalleled comfort and flexibility while maintaining the sleek, sophisticated aesthetic of our Sactionals. Our custom features and accessories can be added easily and quickly to a Sactional to meet endless design, style, storage and utility preferences, reflecting our Designed for Life philosophy. Sactionals are built to meet the highest durability and structural standards applicable to fixed couches. Sactionals are comprised of standardized units and we guarantee their compatibility over time, which we believe is a major pillar of their value proposition to the consumer. Our Sactionals represented 90.9% and 92.0% of our net sales for the thirteen weeks ended May 3, 2026 and May 4, 2025, respectively.
Previous wording
Our Sactionals StealthTech Sound + Charge product line complements our Sactionals as a unique innovation that features immersive surround sound by Harman Kardon and convenient wireless charging, all seamlessly embedded and hidden inside the adaptable Sactionals platform. The system includes two Sound + Charge Sides each with embedded front- and rear-firing Harman Kardon speakers, a Subwoofer that easily integrates into a Sactionals Seat Frame and a Center Channel, all working in unison to deliver captivating surround sound that is completely hidden from view. In May 2023, we introduced Satellite Subwoofers as an add-on to the Sound + Charge System. The Satellite Subwoofer is an upgrade to the existing StealthTech setup and enhances the bass and overall entertainment experience. In November 2024, we launched the StealthTech Charge Side, integrating wireless device charging into our Sactionals Sides without the need for our sound system.
Current wording
Our Sactionals StealthTech Sound + Charge product line complements our Sactionals as a unique innovation that features immersive surround sound by Harman Kardon and convenient wireless charging, all seamlessly embedded and hidden inside the adaptable Sactionals platform. The system includes two Sound + Charge Sides each with embedded front- and rear-firing Harman Kardon speakers, a Subwoofer that easily integrates into a Sactionals Seat Frame and a Center Channel, all working in unison to deliver captivating surround sound that is completely hidden from view. We also offer Satellite Subwoofers as an add-on to the Sound + Charge System, enhancing the existing StealthTech setup with improved bass and overall entertainment experience. In November 2024, we launched the StealthTech Charge Side, integrating wireless device charging into our Sactionals Sides without the need for our sound system.
Previous wording
•Sacs. We believe that our Sacs product line is a category leader in oversized beanbags. The Sac product line offers 5 different sizes ranging from 32 pounds to 95 pounds with capacity to seat 3+ people on the larger model Sacs. Filled with Durafoam, a proprietary blend of shredded foam, Sacs provide serene comfort and guaranteed durability. Their removable covers are machine washable and may be easily replaced with a wide selection of cover offerings. In May 2024, we launched the PillowSac TMChair, an accessory that elevates the style and comfort of our existing PillowSac. In October 2025, the Company launched the PillowSac TM Chair Jr. which delivers the same comfort and premium materials as the PillowSac TMChair, scaled for smaller spaces. Our Sacs represented 6.6% and 7.2% of our net sales for the thirteen weeks ended November 2, 2025 and November 3, 2024, respectively, and 6.3% and 7.1% of our net sales for the thirty-nine weeks ended November 2, 2025 and November 3, 2024, respectively.
Current wording
•Sacs. We believe that our Sacs product line is a category leader in oversized beanbags. The Sacs product line offers 5 different sizes ranging from 32 pounds to 95 pounds with capacity to seat 3+ people on the larger model Sacs. Filled with Durafoam, a proprietary blend of shredded foam, Sacs provide serene comfort and guaranteed durability. Their removable covers are machine washable and may be easily replaced with a wide selection of cover offerings. In May 2024, we launched the PillowSac Chair, an accessory that elevates the style and comfort of our existing PillowSac. In October 2025, the Company launched the PillowSac Chair Jr. which delivers the same comfort and premium materials as the PillowSac Chair, scaled for smaller spaces. Our Sacs represented 5.3% and 6.8% of our net sales for the thirteen weeks ended May 3, 2026 and May 4, 2025, respectively.
Previous wording
•Other. Our Other product line enhances the versatility of our Sacs and Sactionals, catering to the evolving demands and preferences of our customers. Our current offerings also include Sactional-specific drink holders, Footsac blankets, decorative pillows, fitted seat tables, ottomans in various styles and finishes, and the unique Sactionals Power Hub. These products provide our customers with the flexibility to personalize their furnishings with both decorative and practical add-ons, ensuring they can adapt to meet changing style preferences.
Current wording
•Other. Our Other product line enhances the versatility of our Sacs and Sactionals, catering to the evolving demands and preferences of our customers. Our current offerings include Sactional-specific drink holders, Footsac blankets, decorative pillows, fitted seat tables, ottomans in various styles and finishes, and the unique Sactionals Power Hub. These products provide our customers with the flexibility to personalize their furnishings with both decorative and practical add-ons, ensuring they can adapt to meet changing style preferences.
Previous wording
In May 2025, the Company launched Snugg™ (previously referred to as EverCouch™), a new platform of premium seating. Snugg™ combines the familiar shape of a sofa, loveseat, or chair with durable quality and flexible design. Like Lovesac’s Sactionals seating solution, Snugg™ includes washable fabrics, changeable covers, adaptable arm styles, and customizable fill. Snugg™ can be moved as a single unit like a traditional couch, or disassembled and reassembled for easier transport, providing comfortable seating and a versatile fit for a range of spaces.
Current wording
In May 2025, the Company launched Snugg (previously referred to as EverCouch™), a new platform of premium seating. Snugg combines the familiar shape of a sofa, loveseat, or chair with durable quality and flexible design. Similar to Lovesac’s Sactionals seating solution, Snugg includes washable fabrics, changeable covers, adaptable arm styles, and customizable fill. Snugg can be moved as a single unit like a traditional couch, or disassembled and reassembled for easier transport, providing comfortable seating and a versatile fit for a range of spaces.
Previous wording
•Showrooms. We market and sell our products through 275 showroom locations at top tier malls, lifestyle centers, kiosks, and street locations in 44 states in the U.S. We carefully select the best small-footprint showroom locations in high-end malls and lifestyle centers for our showrooms. Compared to traditional retailers, our showrooms require significantly less square footage because of our need to have only a few in-showroom sample configurations for display and our ability to stock our inventory for immediate sale. The architecture and layout of these showrooms are designed to communicate our brand personality and key product features. Our goal is to educate first-time customers, creating an environment where people can touch, feel, read, and understand the technology behind our products. Our showroom concept emphasizes our unique product platform and utilizes technology in more experiential ways to increase traffic and net sales. Net sales generated by this channel accounted for 68.4% and 60.7% of total net sales for the thirteen weeks ended November 2, 2025 and November 3, 2024, respectively, and 68.6% and 61.8% of our net sales for the thirty-nine weeks ended November 2, 2025 and November 3, 2024, respectively.
Current wording
•Showrooms. We market and sell our products through 281 showroom locations strategically situated at top tier malls, lifestyle centers, and street locations in 45 states in the U.S. We carefully select what we believe are the best small-footprint showroom locations in high-end malls and lifestyle centers for our showrooms. Compared to traditional retailers, our showrooms require significantly less square footage because of our need to have only a few in-showroom sample configurations for display and our ability to stock our inventory for immediate sale. The architecture and layout of these showrooms are designed to communicate our brand personality and key product features. Our goal is to educate first-time customers, creating an environment where people can touch, feel, read, and understand the technology behind our products. Our showroom concept emphasizes our unique product platform and utilizes technology in more experiential ways to increase traffic and net sales. Net sales generated by this channel accounted for 70.2% and 69.7% of total net sales for the thirteen weeks ended May 3, 2026 and May 4, 2025, respectively.
Previous wording
•Ecommerce. Through our ecommerce channel, we believe we are able to significantly enhance the consumer shopping experience for home furnishings, driving deeper brand engagement and loyalty, while also realizing more favorable margins than our showroom locations. We believe our robust technological capabilities position us well to benefit from the growing consumer preference to transact at home and via mobile devices. Our net sales generated by this channel accounted for 24.8% and 29.9% of total net sales for the thirteen weeks ended November 2, 2025 and November 3, 2024, respectively, and 25.2% and 28.6% of our net sales for the thirty-nine weeks ended November 2, 2025 and November 3, 2024, respectively.
Current wording
•Ecommerce. Through our ecommerce channel, we believe we are able to significantly enhance the consumer shopping experience for home furnishings, driving deeper brand engagement and loyalty, while also realizing more favorable margins than our showroom locations. We believe our robust technological capabilities position us well to benefit from the growing consumer preference to transact at home and via mobile devices. Our net sales generated by this channel accounted for 25.8% and 24.1% of total net sales for the thirteen weeks ended May 3, 2026 and May 4, 2025, respectively.
Previous wording
◦In store and online pop-up-shops. We utilize in store pop-up-shops to increase the number of locations where customers can experience and purchase our products, a low cost alternative to drive brand awareness, in store net sales, and ecommerce net sales. These in store pop-up-shops are typically 10-day shows and are staffed similarly to our showrooms with associates trained to demonstrate and sell our products and promote our brand. For the thirteen weeks ended November 2, 2025 and November 3, 2024, we operated 161 and 165 in store pop-up-shops, respectively, and 3 and 2 online pop-up-shops on Costco.com, respectively, and for the thirty-nine weeks ended November 2, 2025 and November 3, 2024, we operated 489 and 423 in store pop-up-shops, respectively, and 8 and 7 online pop-up-shops on Costco.com, respectively.
Current wording
◦In store and online pop-up-shops. We utilize in store pop-up-shops to increase the number of locations where customers can experience and purchase our products, a low cost alternative to drive brand awareness, in store net sales, and ecommerce net sales. These in store pop-up-shops are typically 10-day shows and are staffed similarly to our showrooms with associates trained to demonstrate and sell our products and promote our brand. For the thirteen weeks ended May 3, 2026 and May 4, 2025, we operated 159 and 171 in store pop-up-shops, respectively, and 9 and 2 online pop-up-shops on Costco.com, respectively.
Previous wording
◦Shop-in-shops. Shop-in-shops are designed to be in permanent locations carrying the same digital technology of our showrooms and are also staffed with associates trained to demonstrate and sell our products. Shop-in-shops require less capital expenditure to open a productive space to drive brand awareness and touchpoint opportunities for demonstrating and selling our products. In June 2025, the Company discontinued its partnership with Best Buy, resulting in the closure of all remaining Best Buy shop-in-shop locations as of November 2, 2025. Prior to the discontinuation of the partnership, we operated 49 Best Buy shop-in-shops as of November 3, 2024.
Current wording
◦Shop-in-shops. Prior to discontinuing this touchpoint at the end of fiscal 2026, shop-in-shops were designed to be in permanent locations carrying the same digital technology of our showrooms and were also staffed with associates trained to demonstrate and sell our products. In June 2025, the Company discontinued its partnership with Best Buy, resulting in the closure of all remaining shop-in-shop locations as of the end of fiscal 2026. Prior to the discontinuation of the partnership, we operated 49 Best Buy shop-in-shops as of May 4, 2025.
Previous wording
◦Barter inventory transactions. Our barter inventory transactions with a third party vendor are part of our Circular Operations ("CO"), Designed for Life, and Environmental, Social and Governance ("ESG") initiatives. CO is a way of doing business that is meant to reduce our footprint, while dramatically extending the life of products through more looped, localized, long-term, and sustainable practices, policies, and programs. We have the option to repurpose returned open-box inventory in exchange for media credits, which are being used to support our advertising initiatives to create brand awareness and drive net sales growth. See Note 2. Revenue Recognition— Barter Arrangements in the notes to the condensed financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, for more information about our unused media credits as of November 2, 2025.
Current wording
◦Barter inventory transactions. Our barter inventory transactions with a third party vendor are part of our Circular Operations ("CO"), Designed for Life, and Environmental, Social and Governance ("ESG") initiatives. CO is a way of doing business that is meant to reduce our footprint, while dramatically extending the life of products through more looped, localized, long-term, and sustainable practices, policies, and programs. Our barter inventory arrangement permits us from time to time to repurpose returned open-box inventory in exchange for media credits, which are being used to support our advertising initiatives to create brand awareness and drive net sales growth. See Note 2. Revenue Recognition— Barter Arrangements in the notes to the condensed financial statements included in Part I,
Previous wording
◦Loved by Lovesac. In June 2025, we launched the Loved by Lovesac program which enables customers to purchase quality-assured, revitalized open-box products through our dedicated resale platform at www.lovedbylovesac.com. All items are inspected and verified for resale prior to listing. We believe this initiative aligns with our Designed for Life philosophy and supports our commitment to sustainability by extending the lifecycle of our products and reducing environmental impact. The Company has initiated a limited launch of Loved by Lovesac, which is currently available in select states.
Current wording
◦Loved by Lovesac. In June 2025, we launched the Loved by Lovesac program which enables customers to purchase quality-assured, revitalized open-box products through our dedicated resale platform at www.lovedbylovesac.com. All items are inspected and verified for resale prior to listing. We believe this initiative aligns with our Designed for Life philosophy and supports our commitment to sustainability by extending the lifecycle of our products and reducing environmental impact. The Company has initiated a limited launch of Loved by Lovesac, which as of May 3, 2026, is currently available in 30 select states nationwide.
Previous wording
Other net sales, which includes pop-up-shop sales, shop-in-shop sales, barter inventory transactions, and the Loved by Lovesac program, accounted for 6.8% and 9.4% of our total net sales for the thirteen weeks ended November 2, 2025 and November 3, 2024, respectively, and 6.2% and 9.6% of our net sales for the thirty-nine weeks ended November 2, 2025 and November 3, 2024, respectively.
Current wording
Other net sales, which includes pop-up-shop sales, shop-in-shop sales, barter inventory transactions, and the Loved by Lovesac program, accounted for 4.0% and 6.2% of our total net sales for the thirteen weeks ended May 3, 2026 and May 4, 2025, respectively.
Previous wording
Cost of merchandise sold includes the direct cost of sold merchandise; inventory shrinkage; inventory adjustments due to obsolescence, including excess and slow-moving inventory and lower of cost or net realizable value reserves; inbound freight; freight costs to ship merchandise to our showrooms, and warehousing and all logistics costs associated with shipping product to our customers. Certain competitors and other retailers may report gross profit differently than we do, by excluding from gross profit some or all of the costs related to their distribution network and instead including them in selling, general and administrative expenses. As a result, the reporting of our gross profit and profit margin may not be comparable to other companies.
Current wording
Gross profit is equal to our net sales less cost of merchandise sold. Gross profit as a percentage of our net sales is referred to as gross margin. Certain competitors and other retailers may report gross profit differently than we do, by excluding from gross profit some or all of the costs related to their distribution network and instead including them in selling, general and administrative expenses. As a result, the reporting of our gross profit and profit margin may not be comparable to other companies.
Previous wording
The following tables summarize key components of our results of operations for the thirteen and thirty-nine weeks ended November 2, 2025 and November 3, 2024:
Current wording
The following tables summarize key components of our results of operations for the thirteen weeks ended May 3, 2026 and May 4, 2025:
Previous wording
(1) Showrooms open at the end of the period include 1 kiosk as of November 2, 2025 and November 3, 2024. Showrooms open as of November 3, 2024 also include 2 mobile concierges. During the second quarter of fiscal 2026, the Company made the decision to repurpose the mobile concierges for marketing related activity and are included in the showrooms closed within the thirty-nine weeks ended November 2, 2025.
Current wording
(1) During the second quarter of fiscal 2026, the Company made the decision to repurpose its 2 mobile concierges, and subsequently closed its last remaining kiosk in the fourth quarter of fiscal 2026. Showrooms open as of May 4, 2025 included 1 kiosk and 2 mobile concierges.
Previous wording
Net sales increased $0.3 million, or 0.2%, in the thirteen weeks ended November 2, 2025 compared to the prior year period driven by new showroom openings, partially offset by a decrease of 1.2% in omni-channel comparable net sales. In the thirteen weeks ended November 2, 2025, the number of repeat and new customers decreased by 2.3% and 16.4%, respectively. In the comparable prior year period, the number of repeat and new customers increased by 23.4% and 6.9%, respectively.
Current wording
Net sales decreased $0.2 million, or 0.1%, in the thirteen weeks ended May 3, 2026 compared to the prior year period driven by the closure of the Company's Best Buy shop-in-shop locations and a 1.0% decrease in omni-channel comparable net sales, partially offset by new showroom openings. In the thirteen weeks ended May 3, 2026, the number of repeat and new customers decreased by 1.2% and 2.5%, respectively. In the comparable prior year period, the number of repeat and new customers increased by 23.0% and 1.2%, respectively.
Previous wording
Internet net sales (sales made directly to customers through our ecommerce channel) decreased $7.6 million, or 16.9%, in the thirteen weeks ended November 2, 2025 compared to the prior year period.
Current wording
Internet net sales (sales made directly to customers through our ecommerce channel) increased $2.4 million, or 7.1%, in the thirteen weeks ended May 3, 2026 compared to the prior year period.
Previous wording
Other net sales, which include pop-up-shop sales, shop-in-shop sales, barter inventory transactions, and the Loved by Lovesac program, decreased $3.8 million, or 27.3%, in the thirteen weeks ended November 2, 2025 compared to the prior year period. The decrease was primarily attributable to the Company’s decision not to engage in any barter transactions during the current period, and the closure of the Company's Best Buy shop-in-shop locations as a result of the discontinuation of its partnership with Best Buy.
Current wording
Other net sales, which include pop-up-shop sales, shop-in-shop sales, and the Loved by Lovesac program, decreased $3.1 million, or 36.3%, in the thirteen weeks ended May 3, 2026 compared to the prior year period. The decrease was primarily attributable to the closure of the Company's Best Buy shop-in-shop locations as a result of the discontinuation of its partnership with Best Buy.
Previous wording
Gross profit decreased $3.4 million, or 3.9% in the thirteen weeks ended November 2, 2025 compared to the prior year period. Gross margin decreased 240 basis points to 56.1% of net sales in the thirteen weeks ended November 2, 2025 from 58.5% of net sales in the prior year period primarily driven by increases of 320 basis points in inbound transportation and tariff costs and 20 basis points in outbound transportation and warehousing costs, partially offset by an increase of 100 basis points in product margin driven by cost reduction initiatives from our vendors in response to changes in the tariff environment.
Current wording
Gross profit decreased $2.4 million, or 3.2% in the thirteen weeks ended May 3, 2026 compared to the prior year period. Gross margin decreased 160 basis points to 52.1% of net sales in the thirteen weeks ended May 3, 2026 from 53.7% of net sales in the prior year period primarily driven by increases of 380 basis points in inbound transportation and tariff costs and 110 basis points in outbound transportation and warehousing costs, partially offset by an increase of 330 basis points in product margin driven by price increases and cost reduction initiatives, partially offset by higher promotional discounting.
Previous wording
SG&A expenses increased $3.2 million, or 4.5%, in the thirteen weeks ended November 2, 2025 compared to the prior year period. The increase was primarily related to increases of $4.1 million in payroll, including an out-of-period $1.6 million expense pertaining to prior periods employee benefits, $1.0 million in licenses and registrations, $0.7 million in rent, and $0.8 million in other overhead costs. The increases were partially offset by decreases of $3.0 million in legal and professional fees and $0.4 million in equity-based compensation. As a percentage of net sales, SG&A was 49.9% for the thirteen weeks ended November 2, 2025 compared to 47.9% in the prior year period.
Current wording
SG&A expenses increased $1.5 million, or 2.2%, in the thirteen weeks ended May 3, 2026 compared to the prior year period. The increase was primarily related to increases of $1.0 million in payroll associated with higher incentive compensation and $0.5 million in other overhead expenses. As a percentage of net sales, SG&A was 49.6% for the thirteen weeks ended May 3, 2026 compared to 48.5% in the prior year period.
Previous wording
Depreciation and amortization expenses increased $0.3 million, or 9.2%, in the thirteen weeks ended November 2, 2025 compared to the prior year period primarily driven by capital investments for new showrooms.
Current wording
Depreciation and amortization expenses increased $0.6 million, or 15.7%, in the thirteen weeks ended May 3, 2026 compared to the prior year period primarily driven by capital investments for new showrooms.
Previous wording
Interest and other income, net was $0.2 million for the thirteen weeks ended November 2, 2025 compared to $0.7 million in the prior year period. The decrease in interest income was primarily the result of lower cash deposits in the Company's interest-bearing bank accounts.
Current wording
Interest and other income, net was $0.7 million for the thirteen weeks ended May 3, 2026 compared to $0.3 million in the prior year period. The increase in interest income was primarily the result of higher cash deposits in the Company's interest-bearing bank accounts.
Previous wording
Income tax benefit was $5.0 million for the thirteen weeks ended November 2, 2025, compared to $2.1 million in the prior year period. The change in benefit was primarily driven by a higher net loss before taxes.
Current wording
Income tax benefit was $5.6 million for the thirteen weeks ended May 3, 2026, compared to $3.8 million in the prior year period. The change in benefit was primarily driven by a higher net loss before taxes and an increase in the effective tax rate.
Previous wording
Our primary cash needs are for marketing and advertising, inventory, payroll, showroom rent, capital expenditures associated with opening new showrooms and updating existing showrooms, as well as infrastructure and information technology. We periodically use cash to repurchase shares of our common stock under our share repurchase program. The most significant components of our working capital are cash and cash equivalents, merchandise inventory, prepaid expenses, accounts payable, accrued expenses, customer deposits, and other current liabilities. We believe that cash expected to be generated from operations, the availability under our revolving line of credit and our existing cash balances are sufficient to meet working capital requirements and anticipated capital expenditures for at least the next 12 months.
Current wording
Our business relies on cash flows from operations, our revolving line of credit (see “Revolving Line of Credit” below) and securities issuances as our primary sources of liquidity. At May 3, 2026, we had $57.0 million in cash and cash equivalents. Our primary cash needs are for marketing and advertising, inventory, payroll, showroom rent, capital expenditures associated with opening new showrooms and updating existing showrooms, as well as infrastructure and information technology. We periodically use cash to repurchase shares of our common stock under our share repurchase program. The most significant components of our working capital are cash and cash equivalents, merchandise inventory, prepaid expenses, accounts payable, accrued expenses, customer deposits, and other current liabilities. We believe that cash expected to be generated from operations, the availability under our revolving line of credit and our existing cash balances are sufficient to meet working capital requirements and anticipated capital expenditures for at least the next 12 months. Our long-term cash needs will depend on, among other things, our profitability and our ability to manage working capital requirements, and if needed, our ability to identify and secure other potential sources to fund future working capital needs and meet capital expenditure requirements.
Previous wording
Historically, we have invested significant capital expenditures in opening new showrooms and updating existing showrooms. These capital expenditures have increased in the past and may continue to increase in future periods as we open additional showrooms. Capital expenditures are anticipated to support our showroom growth, including capital outlays for leasehold improvements, fixtures and equipment, and the construction of new showrooms. Capital expenditures also include patents and trademarks used in the normal course of our business. Cash paid for capital expenditures was $18.7 million in the thirty-nine weeks ended November 2, 2025.
Current wording
Historically, we have invested significant capital expenditures in opening new showrooms and updating existing showrooms. These capital expenditures have increased in the past and may continue to increase in future periods as we open additional showrooms. Capital expenditures are anticipated to support our showroom growth, including capital outlays for leasehold improvements, fixtures and equipment, and the construction of new showrooms. Capital expenditures also include patents and trademarks used in the normal course of our business. Cash paid for capital expenditures was $5.3 million in the thirteen weeks ended May 3, 2026.
Previous wording
Net cash used in operating activities was $34.1 million in the thirty-nine weeks ended November 2, 2025, compared to $5.0 million in the prior year period. The increase was primarily attributable to working capital fluctuations, driven by inventory purchases and the timing of payments to vendors.
Current wording
Net cash used in operating activities was $35.4 million in the thirteen weeks ended May 3, 2026, compared to $41.4 million in the prior year period. The decrease was primarily attributable to working capital fluctuations, driven by timing of payments to vendors.
Previous wording
For the thirty-nine weeks ended November 2, 2025, net cash used in investing activities was $18.7 million, primarily driven by one-time capital expenditures related to our new corporate office and continued investments in new showrooms. For the thirty-nine weeks ended November 3, 2024, net cash used in investing was $16.1 million, primarily driven by the continued investments in new showrooms.
Current wording
For the thirteen weeks ended May 3, 2026, net cash used in investing activities was $5.3 million, primarily driven by continued investments in new showrooms. For the thirteen weeks ended May 4, 2025, net cash used in investing activities was $8.7 million, primarily driven by one-time capital expenditures related to our new corporate office and the continued investments in new showrooms.
Previous wording
For the thirty-nine weeks ended November 2, 2025 and November 3, 2024, net cash used in financing activities was $7.2 million and $4.2 million, respectively, mainly due to the repurchase of our common stock and taxes paid for the net share settlement of equity awards.
Current wording
For the thirteen weeks ended May 3, 2026 and May 4, 2025, net cash used in financing activities was $4.2 million and $6.8 million, respectively, mainly due to the repurchase of our common stock and taxes paid for the net share settlement of equity awards.
Previous wording
On March 25, 2022, we amended our existing credit agreement providing for an asset-based revolving credit facility with the lenders party thereto, and Wells Fargo Bank, National Association ("Wells Fargo Bank"), as administrative agent. Pursuant to the amendment, the maturity date of our credit agreement was extended to March 25, 2024 and, among other things, the maximum revolver commitment was increased from $25.0 million to $40.0 million, subject to borrowing base and availability restrictions.
Current wording
We are party to a credit agreement providing for an asset-based revolving credit facility with the lenders party thereto, and Wells Fargo Bank, National Association ("Wells"), as administrative agent, that matures July 29, 2029. The maximum revolver commitment is $40.0 million, subject to borrowing base and availability restrictions, and also includes an uncommitted accordion feature that allows the Company, subject to certain customary conditions, to increase the size of the revolving credit facility by $10.0 million. Our credit agreement includes a $1.0 million sublimit for the issuance of letters of credit and a $4.0 million sublimit for swing line loans.
Previous wording
For additional information regarding our line of credit with Wells Fargo Bank, see Note 7. Financing Arrangements. As of November 2, 2025 and February 2, 2025, the Company’s borrowing availability under the line of credit was $36.0 million and $32.6 million, respectively, and there were no outstanding borrowings under our credit facility.
Current wording
For additional information regarding our line of credit with Wells, see Note 7. Financing Arrangements. As of May 3, 2026 and February 1, 2026, the Company’s borrowing availability under the line of credit was $34.9 million and $36.0 million, respectively, and there were no outstanding borrowings under our credit facility.
Previous wording
On June 11, 2024, our board of directors authorized a share repurchase program for up to $40.0 million of shares of our common stock. Under the share repurchase program, we may repurchase shares from time to time in the open market, privately negotiated transactions and accelerated share repurchase. The timing, volume and nature of share repurchases, if any, will be at our sole discretion and will be dependent on market conditions, liquidity, applicable securities laws, and other factors. We may suspend or discontinue the share repurchase program at any time. We plan on funding any repurchases in the future with our current cash and cash equivalents and future cash flows.
Current wording
On June 11, 2024, our board of directors authorized a share repurchase program for up to $40.0 million of shares of our common stock. On March 26, 2026, our Board of Directors authorized the repurchase of an additional $40.0 million of our outstanding common stock under the share repurchase program. Repurchases may be made through open market purchases, privately negotiated transactions, and accelerated share repurchases. The timing, volume and nature of share repurchases, if any, will be at our sole discretion and will be dependent on market conditions, liquidity, applicable securities laws, and other factors. We may suspend or discontinue the share repurchase program at any time. We plan on funding any repurchases in the future with our current cash and cash equivalents and future cash flows.
Previous wording
During the thirty-nine weeks ended November 2, 2025, we repurchased and subsequently retired 306,325 shares of common stock at a total cost of $6.0 million, including broker commissions and fees.
Current wording
During the thirteen weeks ended May 3, 2026 and May 4, 2025, we repurchased and subsequently retired 141,482 and 306,325 shares of common stock, costing $2.4 million and $6.0 million, respectively, including broker commissions and fees.
Previous wording
As of November 2, 2025, approximately $14.1 million remained available for future purchase under our share repurchase program. For additional information, see Note 8. Stockholders' Equity in the notes to the condensed financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Current wording
As of May 3, 2026, approximately $51.7 million remained available for future purchase under our share repurchase program. For additional information, see Note 8. Stockholders' Equity in the notes to the condensed financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Previous wording
The discussion and analysis of financial condition and results of operations is based upon our condensed financial statements, which have been prepared in conformity with US GAAP. Certain accounting policies and estimates are particularly important to the understanding of our financial position and results of operations and require the application of significant judgment by our management or can be materially affected by changes from period to period in economic factors or conditions that are outside of our control. As a result, they are subject to an inherent degree of uncertainty. In applying these policies, management uses their judgment to determine the appropriate assumptions to be used in the determination of certain estimates. Those estimates are based on our historical operations, our future business plans and projected financial results, the terms of existing contracts, observance of trends in the industry, information provided by our customers and information available from other outside sources, as appropriate. Refer to Note 1 of our financial statements included on Form 10-K for the fiscal year ended February 2, 2025 for a complete description of our significant accounting policies. There have been no material changes to the significant accounting policies during the thirty-nine weeks ended November 2, 2025.
Current wording
The discussion and analysis of financial condition and results of operations is based upon our condensed financial statements, which have been prepared in conformity with US GAAP. Certain accounting policies and estimates are particularly important to the understanding of our financial position and results of operations and require the application of significant judgment by our management or can be materially affected by changes from period to period in economic factors or conditions that are outside of our control. As a result, they are subject to an inherent degree of uncertainty. In applying these policies, management uses their judgment to determine the appropriate assumptions to be used in the determination of certain estimates. Those estimates are based on our historical operations, our future business plans and projected financial results, the terms of existing contracts, observance of trends in the industry, information provided by our customers and information available from other outside sources, as appropriate. Refer to Note 1 of our financial statements included on Form 10-K for the fiscal year ended February 1, 2026 for a complete description of our significant accounting policies. There have been no material changes to the significant accounting policies during the thirteen weeks ended May 3, 2026.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Item 1 of this Quarterly Report on Form 10-Q, for more information about our unused media credits as of May 3, 2026.
Current report — wording carried from elsewhere
Cost of merchandise sold includes the direct cost of sold merchandise; inventory shrinkage; inventory adjustments due to obsolescence, including excess and slow-moving inventory and lower of cost or net realizable value reserves; inbound freight; freight costs to ship merchandise to our showrooms, and warehousing and all logistics costs associated with shipping product to our customers.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
Gross profit is equal to our net sales less cost of merchandise sold. Gross profit as a percentage of our net sales is referred to as gross margin.
Previous report — wording carried elsewhere
Internet net sales (sales made directly to customers through our ecommerce channel) decreased $12.7 million, or 10.1%, in the thirty-nine weeks ended November 2, 2025 compared to the prior year period.
Previous report — wording carried elsewhere
Gross profit decreased $2.8 million, or 1.1%, in the thirty-nine weeks ended November 2, 2025 compared to the prior year period. Gross margin decreased 190 basis points to 55.5% of net sales in the thirty-nine weeks ended November 2, 2025 from 57.4% of net sales in the prior year period primarily driven by increases of 110 basis points in inbound transportation and tariff costs and 10 basis points in outbound transportation and warehousing costs, and a decrease of 70 basis points in product margin driven by higher promotional discounting.
Previous report — wording carried elsewhere
Interest and other income, net was $0.6 million for the thirty-nine weeks ended November 2, 2025, compared to $2.1 million in the prior year period. The decrease in interest income was primarily the result of lower cash deposits in the Company's interest-bearing bank accounts.
Previous report — wording carried elsewhere
Income tax benefit was $10.9 million for the thirty-nine weeks ended November 2, 2025, compared to $8.1 million in the prior year period. The change in benefit was primarily driven by a higher net loss before taxes.