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Lovesac says accounting errors found related to last mile freight expenses

Aug. 16, 2023 5:29 PM ETThe Lovesac Company (LOVE)By: Ahmed Farhath, SA News Editor21 Comments
  • Lovesac (NASDAQ:LOVE) disclosed in an SEC filing Wednesday that it identified errors related to last mile freight expenses.
  • The company said it believes that previously reported operating income and net income were overstated by approximately $1.5 million to $2.5 million and $1 million

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Comments (21)

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MachineLearning profile picture
Did I read something like 30% short interest?
@MachineLearning looks like it per SA
21 Aug. 2023
@MachineLearning That means short squeeze coming.
Soooo. Not the worst thing ever….but not great…
2-3 million seems immaterial given about 800 million in 2023 revs.
Bradley Guichard profile picture
@lbeachmike I got to disagree a bit. 2-3 million in net income was overstated according to the article, not just revenue. That’s ~10% of the TTM net income of 22m. That’s a big oops.
@Bradley Guichard Okay - I didn't have the income at hand. You're right - this expense comes right off the bottom line. I am always concerned when I hear "accounting irregularities" - but this one seems to not be a major issue in terms of destroying the overall business story/direction. So do we expect that it is a material impact on the forward-looking EPS or cash flows? I am viewing it more as a buying opportunity if we assume no other oopsies.
Bradley Guichard profile picture
@lbeachmike You could be right. I own a few shares of this as a flyer (also bought a put as a hedge). My concern is that this could only be the tip of the iceberg. Hopefully not. Deloitte is their auditor and they are reputable. So hopefully just an honest mistake.

Also, it sounds like a revenue timing issue, so cash flow would not be affected.
Chris DeMuth Jr. profile picture
According to science, this is the funniest company name.
@Chris DeMuth Jr. Still don't know why this company hasn't signed the B-52's to cover their Love Shack hit in a campaign, the sweet spot for $10K sofas would be 60 year old boomers that were all playing the song at their weddings!

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