Lovesac Company (LOVE) Stock Forecast & Price Target

Lovesac's net sales reached $160.5 million in the second quarter of fiscal year 2026, reflecting a year-over-year increase of 2.5%, which aligns with market expectations and showcases the company's resilience in maintaining revenue growth in a challenging macroeconomic environment. The company has narrowed its fiscal year 2026 revenue outlook to a range of $710-740 million, indicating a projected growth of 4-9% year-over-year, which supports its long-term growth potential despite current challenges. Additionally, the firm's strategic focus on modular couches (Sactionals) and premium beanbag chairs continues to drive market share gains and reinforces a positive performance outlook.

Lovesac's financial outlook is negatively impacted by a reduction in revenue estimates due to a challenging macroeconomic environment, which has led to pressures on profitability and gross margins. The company reported a 260 basis point decline in gross margins to 56.4%, coupled with reduced EBITDA guidance of $42-55 million, reflecting an overall tightening of financial expectations. Additionally, intellectual property risks, including competition from low-cost knockoffs, raise further concerns regarding future sales growth.