Lovesac Company (LOVE) Stock Forecast & Price Target

Lovesac's net sales rose by 2.5% year-over-year to $160.5 million in the second quarter of fiscal 2026, aligning with consensus expectations, indicative of steady consumer demand. The company has narrowed its full-year revenue outlook to a range of $710-740 million, reflecting an anticipated growth of 4-9% year-over-year, which highlights its resilience amid macroeconomic challenges. Additionally, despite a contraction in gross margin, it remains above consensus by 100 basis points, suggesting effective cost management and reinforcing the firm's long-term growth potential.

The Lovesac Co. has experienced a deterioration in key financial metrics, with gross margins declining by 260 basis points to 56.4%, despite slightly exceeding consensus expectations. Additionally, the company has revised its revenue estimates downward due to an uncertain macroeconomic environment and has cited pressures on profitability stemming from tariffs and competitive discounting, with adjusted EBITDA guidance set between $42 million and $55 million, translating to a 6.7% margin at the midpoint. Furthermore, there are concerns regarding intellectual property risks that may hinder future sales growth, as competitors could potentially undermine the company's market position by offering similar products at lower prices.