Lovesac Company (LOVE) Stock Forecast & Price Target

Lovesac reported a 2.5% year-over-year increase in net sales, reaching $160.5 million for the second quarter of fiscal year 2026, aligning with consensus expectations. The company has also narrowed its full-year revenue outlook to between $710 million and $740 million, indicating anticipated growth of 4-9% year-over-year, which reflects confidence in its market positioning. Despite a contraction in gross margin, the EBITDA metrics suggest that the business is well-positioned to weather short-term macroeconomic challenges while capitalizing on long-term growth opportunities.

Lovesac is experiencing a deterioration in key financial metrics, particularly with a decrease in its gross margins, which fell by 260 basis points to 56.4%, despite outperforming consensus expectations. The company has adjusted its revenue estimates downwards due to an uncertain macroeconomic environment, as well as profitability forecasts reflecting margin pressures from tariffs and competitive discounting. Furthermore, there are concerns over potential risks related to intellectual property that may hinder future revenue growth, particularly if competitors produce similar, lower-priced products.