Lovesac (LOVE) Plunges 20.30% Amid Earnings Miss, Guidance Concerns

The Lovesac (LOVE) stock price fell 0.98% today, marking its third consecutive day of decline, with a total drop of 20.30% over the past three days. The share price hit its lowest level since April 2025, experiencing an intraday decline of 1.31%.

The strategy of buying LOVE shares after they reached a recent low and holding for 1 week showed poor performance over the past 5 years. The annualized return was -3.5%, significantly underperforming the market. This indicates that relying on recent price lows as a buying signal can lead to subpar returns, especially when combined with a short holding period..

Lovesac's recent financial performance has been a significant factor in its stock price movement. The company reported a quarterly net loss of $10.8 million or $0.73 per share for the first quarter of fiscal 2026, which is an improvement from the previous year's loss of $13.0 million or $0.83 per share. However, total net sales for the quarter increased by only 4.3% to $138.4 million, falling short of analysts' expectations of $162.29 million. This discrepancy between actual performance and market expectations has contributed to the stock's decline.

Additionally, Lovesac's guidance for fiscal year 2026 projects revenue between $700 million and $750 million, which is slightly below the analyst consensus of $719.70 million. This conservative outlook has raised concerns among investors about the company's growth prospects and its ability to meet future financial targets.

On the business development front, Lovesac's decision to exit its collaboration with Best Buy has also impacted its stock price. This move, coupled with ongoing macroeconomic headwinds, has created uncertainty about the company's strategic direction and its ability to navigate challenging market conditions. Investors are closely monitoring these developments as they assess the long-term viability and growth potential of Lovesac.