Lovesac Company (LOVE) Stock Forecast & Price Target

Lovesac experienced a net sales increase of 2.5% year-over-year, reaching $160.5 million in the second quarter of fiscal 2026, which aligns well with market consensus. The company has also revised its fiscal year 2026 revenue outlook to a range of $710 million to $740 million, indicating an expected growth of 4% to 9% year-over-year. Additionally, despite a contraction in gross margin, the adjusted gross margin remained 100 basis points above consensus, reflecting the company's ability to navigate macroeconomic challenges while maintaining its growth trajectory.

Lovesac's financial outlook appears negative due to a notable deceleration in revenue growth, alongside a significant decline in gross margins which fell 260 basis points to 56.4%, impacted by external pressures such as tariffs and competitive discounting. The company's revised EBITDA guidance projects a margin of only 6.7% at the midpoint, signaling concerns about profitability and overall financial health in a challenging macroeconomic environment. Furthermore, intellectual property risks related to competitors potentially offering similar products at lower prices pose a threat to future sales growth and market positioning.