Lovesac: Key Takeaways From The Q3 Results

Dec. 08, 2022 5:20 AM ETThe Lovesac Company (LOVE)21 Comments
Bela Lakos profile picture
Bela Lakos
701 Followers

Summary

  • Net sales growth despite the challenging macroeconomic environment, fueled by more aggressive advertisement and the opening of additional pop-up shops and shop-in-shops.
  • As the firm could not pass on the additional costs to the customers, margins have contracted. It may indicate that the demand for LOVE's products is relatively elastic.
  • Inventory levels have substantially grown year-over-year. If inventory becomes obsolete, it may lead to further margin contractions.
  • We maintain our "hold" rating.
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The Lovesac Company (NASDAQ:LOVE) designs, manufactures, and sells furniture. We have published an article on the firm in June 2022, titled: "Declining Consumer Confidence May Slow Lovesac's Growth". At that time, we have rated LOVE's stock as a hold, due to

This article was written by

Bela Lakos profile picture
701 Followers
Petroleum engineer with an enthusiasm for investing, accounting and personal finances.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Past performance is not an indicator of future performance. This post is illustrative and educational and is not a specific offer of products or services or financial advice. Information in this article is not an offer to buy or sell, or a solicitation of any offer to buy or sell the securities mentioned herein. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. Expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. This article has been co-authored by Mark Lakos.

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