Lovesac (NASDAQ:LOVE) promised earlier this month that it would be unveiling a new "never-before-seen product" this week. The media event took place on Monday. Was it enough to get investors excited again for the maker of premium beanbag chairs and modular sectionals? 

The new product line -- Sactionals StealthTech Sound + Charge -- could appeal to audiophiles hoping for a bar-raising home-theater experience. It features thin Harman Kardon speakers with wireless charging that can be tucked away inside the Lovesac Sactionals pieces. A subwoofer that embeds in one of the seats will provide some extra oomph to the experience. A center channel completes the experience of a surround-sound experience with front- and rear-firing speakers and subwoofer working together for an immersive sound system.

A family on a Lovesac Sactional with the new StealthTech Sound + Charge system. Holograms suggest they're checking out a prehistoric flick.

Image source: Lovesac.

Sounds good

Lovesac's new toy isn't cheap. The audio upgrade packs a manufacturer's suggested retail price of $3,700. The expected retail selling price will be $2,923, but we're still talking about roughly $3,000 that most families can't justify to upgrade their home-theater and entertainment systems. Thankfully for Lovesac, it doesn't have to be in every home.

Lovesac is a small-cap stock with a $1.1 billion market cap. It won't take much to move the needle. It also helps that Lovesac has already positioned itself as premium-priced company. If you can get someone to pay four figures for a beanbag chair -- granted one large enough to fit an entire family -- it's not an outrageous suggestion to think it can find enough high-wheeled individuals willing to spend another $3,000 to have the ultimate conversation piece. 

Here's where Lovesac's growing retail reach kicks in. Sactionals StealthTech Sound + Charge sounds cool, but it will be easy for a lot of people to check out themselves. It has 123 showrooms across the country that will be demonstrating the product. It will also be on display in select Best Buy stores. A big-ticket item needs the kind of hands-on affirmation that Lovesac can deliver. 

The good news for investors is that Lovesac doesn't need this product to be a hit. It's been doing just fine on its own. There are some good reasons why I singled the stock out as one of three small-cap stocks that could be mid-caps soon.  

The pandemic has made us appreciate better home furnishings, but Lovesac was growing just fine before the COVID-19 calamity sent homebodies scurrying for its comfortable collection of high-end beanbags and modular sectionals. Growth over the past four fiscal years has been phenomenal.

  • Fiscal 2018: 33% growth
  • Fiscal 2019: 63% growth
  • Fiscal 2020: 41% growth
  • Fiscal 2021: 37% growth

Fiscal 2021 is off to a hot start, with sales up 59% through the first six months. Thanks to Lovesac's growing list of clients, glowing reviews, and expansion of its presence through namesake showrooms, as well as third-party partners, you don't need to buy the new audio-system upgrade to sense the Hollywood ending here.

Lovesac has been on a roll for years. It just happens to have a thunderous drum roll to go along with it now.

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