HomeMost PopularInvestingLovesac is Falling Short: Q3 Earnings Underwhelm

Lovesac is Falling Short: Q3 Earnings Underwhelm

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Prepare for the impending report of The Lovesac Company LOVE’s third-quarter fiscal 2024 results on Dec 6, prior to the market opening.

The company’s loss per share has deepened, plummeting to 31 cents, down from an EPS of 3 cents over the past 30 days. In the previous year’s corresponding period, Lovesac reported a loss per share of 55 cents.

Lackluster Earnings Anticipated

The consensus estimate for net sales stands at $153.7 million, denoting growth of 14% from the year-ago reported figure of $134.8 million.

Factors in the Mix

Lovesac’s sales are expected to have swelled due to robust growth in Showroom and Internet sales channels. The launch of the new Angled Side product and a focus on proactive investments in new products are expected to fuel consumer demand. Despite soft consumer spending, the company remains hopeful, with a projected net sales of approximately $154 million for the quarter.

The Zacks Consensus Estimate for net sales in Showroom and Internet channels is anticipated to be $101 million and $38.7 million, respectively, marking significant growth from the previous year’s values.

While the quarter’s comparable sales are projected to climb, the rise in operating expenses due to an increase in several costs is a looming concern. Nonetheless, the company’s expense control initiatives could offset these challenges to a large extent.

Anticipated adjusted EBITDA for the quarter ranges from a loss of $1.5 million to a gain of $0.5 million, compared to the year-over-year reported adjusted EBITDA loss of $8.4 million.

Predictions by Zacks Model

However, prospects seem bleak as per our proven model, which does not decisively predict an earnings beat for Lovesac this time around. The absence of the right combination of a positive Earnings ESP and a Zacks Rank #1, 2, or 3 lowers the odds of an earnings beat.

With an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell), pessimism looms large.

Alternative Options

Considering the predicament, investors may wish to explore other opportunities in the Retail-Wholesale sector, such as Wingstop Inc. WING, Brinker International, Inc. EAT, and The Gap, Inc. GPS, all of which are exhibiting promising prospects against the backdrop of Lovesac’s despondency.

Keep an eye on impending earnings announcements with the Zacks Earnings Calendar as a roadmap for navigating this tumultuous market environment.

Zacks Names β€œSingle Best Pick to Double”

Taking a detour from Lovesac’s underperformance, Zacks experts foresee a stock that may soar by +100% or more in the near future. This potential mover is hailed for its groundbreaking achievements in the medical domain, promising a revolutionary impact on patients battling a myriad of diseases. Amidst its resurgence from the bear market depths, this timely investment presents an opportunity akin to recent high-fliers such as Boston Beer Company and NVIDIA.

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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