What Happened?
Shares of furniture company Lovesac (NASDAQ:LOVE) jumped 19% in the pre-market session after the company reported impressive fourth quarter 2024 results which beat across the board on revenue, EBITDA, and EPS despite a choppy macro. While sales did drop 3.6% from last year, that was mostly because of weaker online and store demand, but adding more stores helped cushion that fall. With better margins and lean costs, earnings per share rose significantly and ahead of expectations. Looking ahead, full-year sales and EBITDA guidance both topped Wall Street's expectations, suggesting confidence in the company's new product roadmap, including launches like the Sactionals Reclining Seat and EverCouch. Overall, we think this was a very strong quarter with some key metrics above expectations.
The shares closed the day at $18.52, up 16.4% from previous close.
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What The Market Is Telling Us
Lovesac’s shares are extremely volatile and have had 38 moves greater than 5% over the last year. But moves this big are rare even for Lovesac and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock dropped 25.5% on the news that the company reported underwhelming third-quarter financial results, with revenue falling below Wall Street's expectations. In addition, its full-year EPS guidance missed significantly, and its EPS guidance for the next quarter fell short of Wall Street's estimates. Management added, "Near-term headwinds for our category clearly persisted through the pre-election period." Overall, this quarter could have been better.
Lovesac is down 23% since the beginning of the year, and at $18.42 per share, it is trading 52.3% below its 52-week high of $38.64 from December 2024. Investors who bought $1,000 worth of Lovesac’s shares 5 years ago would now be looking at an investment worth $3,249.
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