Lovesac Company (LOVE) Stock Forecast & Price Target

Lovesac reported a year-over-year net sales increase of 2.5%, reaching $160.5 million for the second quarter of its fiscal year 2026, thereby aligning with consensus expectations. The company also revised its fiscal year 2026 revenue outlook to between $710 million and $740 million, representing anticipated growth of 4-9% year-over-year, which reflects ongoing momentum in market share gains. Despite a contraction in gross margin of approximately 250 basis points to 56.4%, which remains 100 basis points above consensus estimates, the company’s EBITDA position indicates a strong foundation that supports long-term growth potential.

The Lovesac Co. is experiencing a decline in growth, with its revenue estimates being lowered due to an uncertain macroeconomic environment, which has contributed to decreased profitability forecasts and heightened gross margin pressure from tariffs and competitive discounting. In addition, gross margins fell by 260 basis points to 56.4%, despite being slightly better than consensus estimates, indicating significant challenges ahead. Furthermore, the company's reduced EBITDA guidance and concerns about potential risks from intellectual property issues may further hamper revenue growth and pressure the stock.