Here's What to Expect From Lovesac's (LOVE) Q3 Earnings
The Lovesac Company LOVE is scheduled to report its third-quarter fiscal 2024 results on Dec 6, before the opening bell.
In the last reported quarter, the company’s loss per share was narrower than the Zacks Consensus Estimate. In the year-ago period, the company reported earnings per share (EPS) of 45 cents. On the other hand, the net sales topped the consensus mark by 3% and grew 4% year over year.
Lovesac’s earnings topped the consensus mark in three of the trailing four quarters and missed on the remaining one occasion, the average surprise being 17.4%.
How are Estimates Placed?
The Zacks Consensus Estimate for the company's fiscal third-quarter loss per share has moved south to 31 cents against an EPS of 3 cents over the past 30 days. In the year-ago period, the company reported a loss per share of 55 cents.
The Lovesac Company Price and EPS Surprise
The Lovesac Company price-eps-surprise | The Lovesac Company Quote
The consensus mark for net sales is pegged at $153.7 million, suggesting growth of 14% from the year-ago reported figure of $134.8 million.
Key Factors to Consider
The to-be-reported quarter’s net sales of Lovesac are likely to have increased year over year attributable to solid growth in its Showroom and Internet sales channels. Also, the launch of its new Angled Side product under the Sactionals portfolio adds to the growth trend. The company intends to focus on proactive investments in new products to spark consumer demand as it has been facing soft consumer spending, which is expected to continue in third-quarter fiscal 2024. The company expects the to-be-reported quarter’s net sales to be approximately $154 million.
For the fiscal third quarter of 2024, the Zacks Consensus Estimate for net sales in Showroom and Internet channels is pegged at $101 million and $38.7 million, notably up from year-over-year reported values of $83 million and $33.3 million, respectively.
Furthermore, the quarter’s comparable sales are expected to grow on the back of higher point-of-sales transactions with lower promotional discounting accompanied by the addition of new retail showrooms.
Meanwhile, Lovesac is likely to have witnessed higher operating expenses driven by an increase in selling, general and administration expenses on the back of an increase in employment costs, overhead expenses, selling-related expenses and rent. However, the company’s expense control initiatives are likely to have helped offset these headwinds to a great extent.
The company expects the quarter’s adjusted EBITDA to range within a loss of $1.5 million and a gain of $0.5 million compared with the year-over-year reported adjusted EBITDA loss of $8.4 million.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Lovesac this time around. The company does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat.
Earnings ESP: LOVE has an Earnings ESP of 0.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).
Key Picks
Here are some better-ranked stocks that investors may consider from the Zacks Retail-Wholesale sector.
Wingstop Inc. WING sports a Zacks Rank of 1. You can see the complete list of today’s Zacks Rank #1 stocks here.
It has a trailing four-quarter earnings surprise of 28.9%, on average. The stock has increased 53.8% in the past year. The Zacks Consensus Estimate for WING’s 2023 sales and EPS suggests increases of 26.3% and 29.2%, respectively, from the year-ago period’s levels.
Brinker International, Inc. EAT currently sports a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 223.6%, on average. The stock has rallied 15.4% in the past year.
The Zacks Consensus Estimate for EAT’s fiscal 2024 sales and EPS indicates a 5.1% and a 26.2% rise, respectively, from the year-ago period’s levels.
The Gap, Inc. GPS currently sports a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 137.9%, on average. The stock has gained 38.8% in the past year.
The Zacks Consensus Estimate for GPS’ fiscal 2024 sales suggest an improvement of 1% but the EPS suggests a decline 0.6%, from the year-ago period’s levels.
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The Lovesac Company (LOVE) : Free Stock Analysis Report
