The following is a summary of the The Lovesac Company (LOVE) Q3 2025 Earnings Call Transcript:

Financial Performance:

• Lovesac reported a Q3 2025 net sales of $149.9 million, a decline of 2.7% year-over-year.

• Gross margin expanded slightly due to a decrease in inbound transportation costs, partially offset by higher promotional discounting.

• Adjusted EBITDA was pressured by deleverage in SG&A but saw an increase to $2.7 million from $2.5 million the prior year.

Business Progress:

• Lovesac launched significant new products in Q3 2025, namely the 'AnyTable', and a variety of Sactional configurations including a new 'StealthTech' charging side, and the innovative pull-forward of the power recliner.

• Despite a constrained holiday market, Lovesac managed to introduce the power recliner ahead of schedule, supporting their strategic focus on product innovation and customer engagement.

• The company opened five new showrooms, continuing its expansion and aiming for a total of over 30 showrooms for fiscal 2025.

Opportunities:

• Introduced the innovative Sactionals recliner, targeting the 25% of the broader sectional category demanding reclining features, enhancing customer engagement and expanding market opportunity.

• Plans to expand strategic marketing efforts, including hiring a new Chief Marketing Officer, aiming to enhance brand awareness and conversion efficiently.

Risks:

• Persistent market challenges post-pandemic, with ongoing consumer spending caution impacting sales despite high interest (indicated by double-digits quote pipeline growth).

• Economic environment leading to reduced consumer finance usage, impacting final sales conversions.

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