What happened

Shares of Lovesac (NASDAQ:LOVE) are up 15.4% as of 2:15 p.m. EDT Wednesday after the specialty-furniture retailer announced better-than-expected fiscal second-quarter 2020 results. 

More specifically, Lovesac's net sales soared 44.8% year over year to $48.1 million, translating to an adjusted net loss of $4.5 million, or $0.31 per share (narrowed from a $0.63-per-share loss a year earlier). Most analysts were expecting a wider loss of $0.50 per share on revenue of $47.7 million.

Man in white shirt and black/white tie celebrating in front of a wooden arrow chart indicating gains.


So what

Lovesac's top-line growth was led by strength across its showroom, internet, and pop-up shop sales. These venues were collectively fueled by successful marketing campaigns that not only attracted new customers to the brand, but also encouraged repeat purchases from existing clients. Lovesac's comparable sales skyrocketed 40.7% in the quarter, including a 31.8% increase from showrooms and 71.5% growth from online sources.

"We are further strengthening our multi-channel model with the addition of productive new showrooms, the expansion of our pop up shop business at Costco and the announcement of a brand new shop in shop pilot with Macy's that is expected to launch late in the third quarter, as well as increasingly effective advertising and marketing strategies," stated Lovesac CEO Shawn Nelson.

Now what

Lovesac also reiterated its outlook for full-fiscal-year 2020 growth of 40% to 45% and for positive full-year adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). With that in mind, Lovesac also noted this reiterated guidance includes the negative impact from all announced tariffs to date, which the company has managed to mitigate through a combination of "minor" price increases and reducing its manufacturing in China to just 44% of its total (from 75% at the start of this year).

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