On September 10, 2026, The Lovesac Company (NASDAQ:LOVE) reported second-quarter fiscal 2027 results for the period ended August 2, 2026. Net sales rose 0.4% to $161.2 million, a record for the quarter, and the company swung to net income of $7.4 million, or $0.51 per diluted share, from a loss of $6.7 million a year earlier. Inside that $0.51 sits $0.86 of net benefit from IEEPA tariff refunds. Omni-channel comparable sales fell 1.9%.
High-End Demand Is Holding Up
Canaccord’s Maria Ripps read the quarter as in line, with revenue and adjusted EBITDA both landing within guidance and near consensus while tariff refunds pushed gross margin and earnings above expectations; she cut the firm’s target on The Lovesac Company to $20 from $22 but held the Buy rating.
Roth Capital’s Matt Koranda also called the quarter in line with consensus, though he flagged omni-channel comps trending modestly negative on soft lower-end consumer demand. He lowered the firm’s target on The Lovesac Company to $20 from $22 as well, keeping a Buy rating, and noted that management reset full-year guidance lower on a tough demand environment and modest product launch delays.
DA Davidson offered a similar interpretation of the lower guidance, arguing that the reset reflects the new CFO’s approach more than a deterioration in the underlying business. The firm said the CFO, who joined during the quarter, appears to be establishing more conservative expectations that could restore a beat-and-raise pattern the stock had lacked. DA Davidson lowered its target on The Lovesac Company to $18 from $20 while maintaining its Buy rating.
The operating case rests on the high end: configurations above $6,000 grew double digits against a tough comparison, showroom net sales rose 4.6% to $114.1 million on 14 net new locations, and Snugg helped push other products revenue up 198.2%. Lovesac ended the quarter with $68.8 million in cash and no debt.
The Core Business Still Looks Soft
None of the three firms is bearish on paper, but the numbers underneath are.
Excluding tariff recoveries, second-quarter gross margin was 56.0%, a 40 basis point decline from a year earlier, and adjusted EBITDA was a loss of $1.3 million against income of $0.8 million. Demand below the $6,000 price point continues to erode, with internet sales down 5.3%, Sacs sales down 8.6%, and the Best Buy shop-in-shop exit cutting other net sales 23.2%. Inventory rose to $130.2 million from $124.0 million ahead of a heavy second-half launch schedule, which raises the cost of any product slipping.
Management guided third-quarter sales to $140 million to $150 million with a net loss of $9 million to $12 million and an adjusted EBITDA loss of $7 million to $10 million.
What The Smart Money Sees
Anson Investments held the largest stake among hedge funds, 1.18 million shares worth $19.76 million as of the second quarter of 2026, unchanged from the prior quarter. Several sizable holders cut exposure, including Invenomic Capital Management at 12%, Rima Senvest Management at 4%, and Hood River Capital Management and Arrowstreet Capital at 2% each. AQR Capital Management moved the other way, raising its position 12% to 272,794 shares worth $4.55 million.
Overall hedge fund ownership held flat at 20 funds versus 20 the quarter before. Short interest stands at 21.93% of float, and shares trade at 32.68 times forward earnings as of September 15, 2026.
Takeaway
Three Buy ratings and three target cuts on the same day is a fair summary of where The Lovesac Company sits: analysts still believe in the brand, and none of them is willing to underwrite the current guidance as is. The headline profit came from a tariff refund that will not repeat, and the underlying business lost money on an adjusted EBITDA basis.
With the stock at 32.68 times forward earnings and nearly 22% of float sold short, the second-half product launches carry much of the thesis. This is because the management expects only limited contribution from new products in the third quarter before a more meaningful impact in the fourth quarter.
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