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Lovesac (LOVE) is trading sharply lower despite delivering a sizable Q2 (Jul) EPS beat, as softer FY26 guidance weighed on sentiment. Revenue was in line at $160.5 mln (+2.5% yr/yr), but FY26 EPS outlook was cut to $0.52-1.05 (from $0.80-1.36) and revenue narrowed to $710-740 mln (from $700-750 mln), reflecting tariff and discounting pressures. The midpoint of FY26 EPS guidance is below consensus estimates.

• Showroom net sales increased 10.4% to $109.1 mln, driven by an increase of +0.9% in omni-channel comparable sales. Though that is a deceleration from the +2.8% comp in Q1 (Apr).
• LOVE saw slight improvement in May-July trends but cautioned it's too early to call a rebound amid tariff and consumer uncertainty.
• Gross margin decreased 260 bps yr/yr to 56.4%, driven by increases of 110 bps in inbound transportation costs, 50 bps in outbound transportation and warehousing costs and a decrease of 100 bps in product margin.
• New product momentum building with Snugg launch, expanding to 100 showrooms and backed by fresh brand/marketing efforts, positioning LOVE to capture share once category demand normalizes.

Briefing.com Analyst Insight

This was another challenging quarter for LOVE following a difficult Q1, underscoring how tariff volatility, sluggish consumer spending, and an intensely promotional furnishings market are weighing on results. Even so, the company continues to notch share gains, supported by ongoing product innovation, including the new Snugg couch, and solid showroom performance. That said, persistent margin compression and reduced earnings visibility remain key concerns. Management cautioned that Q3 will bear the brunt of current headwinds, though it anticipates a more favorable setup in Q4.