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Shares of Lovesac (NASDAQ:LOVE) spent much of the last year quietly building up gains, all the way up to the election period. And then, in one swift fall, shares of Lovesac crashed after cutting its guidance yet again
Lovesac: Headwinds Are Unlikely To Subside
Summary
- Lovesac's stock has been volatile, with recent declines due to lowered guidance and a challenging furniture market, leading to a flat performance over the past year.
- Despite a better valuation post-drop, I maintain a sell rating on Lovesac, pending evidence of a sales recovery in FY26.
- Q3 results were disappointing, with a -2.7% revenue decline and missed expectations, highlighting potential over-investment in showrooms.
- Management is expecting sales to rebound in FY26, but with trends expected to worsen into Q4 and a poor track record for hitting guidance, we think it's best to wait.
With combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood.
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