The Lovesac Company (LOVE) 12 Dec 242025 Q3 Earnings call transcript

Greetings, and welcome to the Lovesac Third Quarter Fiscal Year 2025 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Ms. Caitlin Churchill, Investor Relations. Thank you.

begin. may You

morning, Shawn Good and me the Financial on Operating Thank Chief everyone. Executive is Officer. Chief Siegner, Nelson, and President Officer; call Officer; you. Keith With Mary Chief Fox,

materially would I information plans expectations, and those financial our the include from our started, get financial will may prospects. we like remind Actual include some discussed future you regarding statements in our future performance. These forth projections and such to results forward-looking future and of that events differ set about Before statements statements.

risks discussion of includes uncertainties, a the For review release. company's press with these which and SEC, you the should filings today's

You All based of as and assumptions forward-looking our forward-looking required and we on future today, obligation to undertake law. applicable statements as should that on except rely events. are update of we on by call them, statements beliefs as not no make predictions this

non-GAAP EBITDA. to should including from has today measures, EBITDA comparable our measure reconciliation will discussion our not GAAP as adjusted as to and provided considered financial in include be supplemental or a measure most non-GAAP substitute such results. A and in Our GAAP directly the for been financial release. measures isolation financial in press non-GAAP of information These financial addition

Now Nelson, call Lovesac I Chief the Shawn? would Shawn Company. like over Executive to to turn the Officer of

for I'll COO, quarter by key start and you us. initiatives. our sharing overview joining our and outlook. and results third growth thank Then of discuss high-level Good our morning, Mary everyone, will President a Fox,

other items in our will review our Finally, results more Keith a outlook financial CFO, to Siegner, few and related detail. our

sales our $XXX.X QX Turning year-over-year reflecting about to were decline million, of the results. Total a of net X.X%. highlights

in our many category, from the others persisted aware you're period. As pre-election clearly headwinds in

Underpinning footprint, the the in like platform, goods Life productive product enhanced quarter our built years. completed for order deleverage offset we was QX, by innovation. Demonstrating our X.X%, market comparable our new in we drink and Adjusted by but by large products, our evidenced our size, advertising with and on to partially those focus For category was and compelling new felt encouraging and our represented average insert highest Designed digits sales conversion engagement, in quotes in the contributions. and pressure the highly balance decreased very of table, and noncomp our the end trends which us less entered our category net overhaul surface our love accelerating by net third fans were down In is which our pre-holiday we share customer than and against expected. Total this a in coaster by successfully saw quarter SG&A, omnichannel omnichannel setups holder, by and for and tray the recent commitment from with our cash growth gross margin addressed innovation. in is request performance touchpoint a case protectors. where us, of on expansion gains we some quotes offset expectations, being still that by pressured partially saw quarter below an marketing. Despite high results any upon reinforced marketing the single common loss compounded EBITDA leverage offering

opportunities, simultaneously million to even base X over installed through these our competitive more make in add-on of platform All that business Sactionals back to for the driving it new our come. repeat introductions keep expand while more. More ways in prolific households marketplace details of

extension platform. also to well QX, now recently to StealthTech the into new launched have even We've we're are As super news to we side product more excited share. charge our

launch able factional any the to work long-awaited teams, embedded. Also, the done and recliner. by surround to collaborative thanks can charging even were many is recliner. soft power the full add world's innovative without most to Sactionals you we Now side pull This sound forward

one in marvel done way of so person. XXX you find engineering of in to showrooms the rearrangeable haven't you need your really already, If proper our sophisticated clearance, experience Lovesac sleek, any zero-wall to

back time the and to the and the hours selling and years enjoying now a the the XX,XXX we'll gravity this zero than positioning, This decades. of under of product went kicking beauty. look be for thing Besides more take cushions and Nearly hood. X is that engineering remove into design creation

replaces set It is be already of it or setup ever it's the any can own. are can it seat. and sides, durable with [indiscernible] ways Corus, deep that wide But course, with our utilized ways more and comfy. seamlessly simply in even customers one Lovesac works It sold, be smooth sectional up these to function arms configuration. any it miraculously, the Sactionals and backs

full demands It category relating the issued a and it. [indiscernible] only life for is are for numerous to Earth and XX% frame broader the truly a reclining of there designed patents pending sectional up the opportunity on market capabilities. bit, To

already. been as successful have in are believe sectional As currently to the with Sactionals, platform date U.S. best-selling we the Sactionals we

of feedbacks. We product weeks it is Already, few until in huge locked internal of ago. our our terms exceeding out market rates and a have this recliner just been effectively attachment expectations customer this we launched

customers. one seat also we compatible, existing explained, really was is As have Reclining best you reverse the ago to investment reclining ever maybe made not I of just yet compatible revealed. the made. but it future in investments years The Sactionals Sactionals says you ways seat in is

less. retail. over doing This business to consumer designed is world and Lovesac in and goods in ways time, its unique more of You trust action. catalog life not can that for product purchase XXX% to original the of is to expand way your valuable makes us This continue compelling with

are of We proud it.

step-changed with us. yet for to even Clearly, the fiscal only for higher for few is months XXXX, Yes, XXXX. has be more I fiscal of pace innovation product significant launches announced many Lovesac, a which away even at said

specialists made marking that and to chain the we will repeat in Lovesac and come. sophisticated decades design investments working over and for product compounding the new last business in X from industrial research numerous including supply professionals comes innovation leverage all to and for solutions and this of deliver life years, All sourcing drive [indiscernible] designers, engineers

have in foundation Hopefully, for We for that despite for can tough about paying potential more held to supercharge going forward. profitable off. so investments new which the York our our Investor initiatives, see strategic Day December years should the operational next to category. financial framework, now should City New upcoming reveal are products our ambitions, why we'll and these be commitment been you growth excited XX, massive growth and Tuesday, growth about excellence a growth we're investing Lovesac. At which reinforce in

our in home so be the new opportunity still these green off remains rep Despite much the shoots from launches, more. the comers pipeline gains recovered some not growth in post of about gave challenged, pull severely to brand recent category and double-digit pandemic buzz, us excited terms forward. in Friday back attacking of Black business and

outlook Keith to But bringing well as holding adjust on indicated uncertainty, new We're accordingly our for our lingering as it's will is as but wise the customers we and interested our focused in back. fourth still quarter, believe quote converting consumer there customers clearly pipeline by share. outlook in those

and as of continue supported protecting controlling by that that profitability drive future In for powerful invest life we growth and expanding even portfolio prudently for new summary, to is growth remain product one we expenses will and brand. secular we an focused a what believe in design on story, unique platforms expansion is this

even worked earlier have and seat teams all out, day months do the very hard launch heart the reclining about than in of are to dynamic and day through of scheduled, the environment. Our navigate all-important at work they what through this as to talking while we the hard consumer all to ongoing for continue holiday season. thank them I their execution we of disciplined and executing want

which low even extremely markets, we is attractive runway Lovesac's enjoy very large addressable platforms. and in with for growth and fragmented currently current share our a long of

strengthening position, position QX. enabled balance and all solid Our ever on cash share business sheet, first profitable made growing buybacks our the during market and net

York on by review, XX. growth strategic will priorities to with that, New and Investor more With I our As cover we all detail. attendance stakeholders. in delivering Keith that to progress deploy vision capital to We for create on to profitable during sustainable, over Mary should and Oldman long-term long-term our forward operate sharing will to look our value discipline, continue December focused our on Day it Mary? hand Invite City more intend

morning, and Thank you, good everyone. Shawn,

up As on XX.X% X down Shawn basis but even X-year million remains discussed, a for $XXX.X of last challenging. our net as category from year, the was quarter sales slightly

are of a compared flattish. for category sales on almost the X-year up net prepandemic performance comparable levels Importantly, to twofold base

market gaining platform focus anyone period. in unique adjusted the we share resulting significant. a points Our customers over flywheel. market total basis a our continued to by In model Infinity the unlike that business margin time and category, EBITDA X, We've outperform a and in the category, increased is addressable has same built opportunity underpinned our omnichannel else quarter product-centric XXX

economics Brand health supply chain. experience growing, an a point is and that best-in-class touch strong high-return advantaged e-commerce and

in strategic initiatives and We continue come. profitability to our up to us set from to benefit underlying for extract disciplined years investments for capabilities enhanced

key of highlights of provide initiatives. our go-forward plans each on our I'll now strategic

curious power most product our Firstly, jump recliner. sub-launch you're ultimate innovation. that know of and let's the excited We into recent right

chain for holiday and the from a X our all launch points touch with targeting the We including online of date supply ahead were in quarter of effort soft to and just period. commercialization, able we launch been have teams, a fiscal 'XX recliner, Herculean but this key

than media more off organizational to throughout to have to for and We'll add fiscal to lean a to awareness aggressively recliner products conversion built more in just stronger I even market be start. it's want full and to a support, bring is life design of But capability 'XX. few we strong without details. able drive ever, The

penetration is breakthrough that platform. the customers incremental seat by Sactionals innovation Refining recliner category attracting drive a will to powered

that compatibility drive customer us comfort unparalleled the reverse the fleet known repeat for. greater flexibility with delivers is business. maintaining esthetic enables recliner and while existing to sophisticated The Sactionals Lovesac Importantly,

innovation. a configuration be are the aperture and into positioned seat and by addressable market to a the specific and a within incremental opportunity traditional We in tapping customer multiple orientation. value open or future recliner of virtually factional to tremendous spots market limited recliners see single for catch reclining this sectional lifetime Unlike in the anywhere with that driving section can

have XX. launch more year the next off our Investor sharing forward Day will on full with you campaign and during look kick early We to December

continue lean time. into forge partnerships brand-relevant that culture to also We real ambassador

X, gut back tour. quarter concert [indiscernible] in partnered Rodrigo international example, with for For her Olivia we World Tour

of matter has both our gut tour and by impressions stack grow in than anticipated more by exploded on days. followers base in helping more widely she TikTok. Instagram, million first and Her $X Instagram by million Live, XX a been has worldwide than The and on follow

omnichannel our experience. Second,

as of We continue position our through touch retailer points physical and to strengthen a our platform. combination true a digital omnichannel our

on showroom quarter, during over touch just at/or deliver we net opened Fiscal in First, the opening 'XX we X X. track and remain XX to new points,

improving to Second, addressable post-purchase plan locator strategic as to with opportunity the products our base during existing to expenses, enhancements with well as we to a purchases. website as an significant that quarter, information and enhancements relationships that have made integrate the pre- rich of experience. a MyHub, customer continued to including order launch customers new our new their improvement We key we continue existing customers journey and for to engaged building Lovesac significant nurture and long-term omnichannel the when support post-purchase existing focus showroom into launch enhancements relationships remains highly and long-term the best-in-class the

Backwards their purchase. relationships to after advantage unique nurture long customer deepen capability us gives initial a and

Chair, quarter a the driving in of X existing mix PillowSac Accent heels sales in assisted the customer double-digit in last the year. any and launch table On versus increase of

reclining attracting to new leverage existing loyal launch new and customers of will addition continue like charge as we side. seats our In base we to customers, innovations

of area for our strategic is Another quote programming engaged focus optimizing open holders. highly

systematically the more at capture, better time. right we Through enabling right with us out message this to augmenting data reach audience of our partners efforts the the are to amazing [indiscernible]

acquiring, with around loyal centered Third maintaining loving and ecosystem, customers. is our is relationships delighting which

and quarter the pulled throughout We during leverage mix linear on marketing strategically the continue period back into spend TV leading the election. our to and XXXX

TV social search in including positive generating video, and trends helping and pressures Our are to offset inflationary into traffic YouTube ROI, continued media. paid optimizations and

upside brand we've beloved as using sales conditions, to expanding and good and been macro approach effective significant As marketing our net through bad see this grow in and build from marketing next we Officer potential a Chief chapter and of into playbook Marketing Lovesac platforms, well established the to for anchored recruiting our with life design brand we and are portfolio us by growth. shepherd the product enhancing of

as We will have information. we share developments more

looking of launched We've X, results expand on and services. by the designed bringing Lovesac inspected experience In on beta to products quarter we're open-box to and phase or our and to operations. associates we our are our products in customers, internal offering update inventory for this test, to launching meticulously great seen life internal a continuing resell fuel circular that website, our to to forward leveraging a great supported experience. an Now first endeavor curated promise our with

tariff year-over-year. Finally, of infrastructure investments of DC, outside key prudent inbound versus costs and continued in infrastructure in efficiency, is investments, we material which of element making improvement disciplined management technology. planned A driving X, delivering and on quarter capabilities and manufacturing through both last diversification and freight year the savings delivered

logistics from rates. minimizing reliance forwarder our as earlier on of market to well benefit As continues we cost This inflation direct representing enhanced to better inbound model overall in pricing we carrier a significant moving tainers strategy avoidance. relationship, freight deemphasizing spot pricing us as both this and spot mentioned the a year, availability our

From an in by the offset increase the gross margin promotional higher continue levels were quarter to see in these in we deducting as category. partially a savings perspective, promotional

including outbound a delivered systems, end X% driven logistics by recent the at of total We of our assets. also quarter, which reduction investments, inventory in our benefits benefits management order new the the

lower in beyond. this and On is to cost and advancements successfully next parcel outbound in improved deliver We'll make markets, introduced X overall into and local year to expand key customer which logistics program that, and we strong helping continue satisfaction. continue providers our evaluate model

will the So priorities in support expand growth on substantial as important Keith. make I summary, lies over our that progress to to and as call the we're investments pleased with the pass well drive business ahead. strategic successfully foundational the we continue now to as

Mary. Thanks,

At on reasons Shawn the third achieve to rest guided of the of sales level, the fell into expenses us quick quarter the of net quarter, fiscal management guidance enabled regardless. review a a jump the Let's followed profit of our our favorable by of 'XX. right for outlook for third our short ranges slightly discussed, controllable end high disciplined

restatement That's of despite financials. even expenses related incremental year's period to prior last

As noted. quarter the in the million we metrics, unless compared $XXX.X begin Net sales with third that decreased $X.X to note all references to X.X% to period. prior 'XX or performance quarter otherwise refer please million to the year fiscal third

in XX.X% decreased sales in $XX or year sales the net to showrooms. the partially compared of $X.X million driven new net quarter offset increased addition or to period. sales, million Showroom period, in million by million Internet a to prior quarter XX X.X% comparable third by third X.X% net of compared the prior year omnichannel net $X.X to decrease the $XX.X

productivity to year-over-year inventory the our million of include were primarily which Other year with third in to third on net sales, box transactions or decreased and quarter. quarter open-box transactions pop-up lower shops period Open ICON million to $X.X shop, costco.com. the due in million prior $XX flattish at online the pop-up shop-in-shop $X.X inventory compared X.X% temporary

quarter. We fiscal anticipate in not category, net do our X%. sales the product sales any transactions currently net the decreased By third X%. these of quarter, decreased in Sactional fourth Sacs

of these StealthTech second than accounted We be Combined, will up quarter. chair expect quarter. in to for to with and fourth sales transfer largely third the on the fourth net in we accent $X Telisa quarters backlog and from the million continue caught less

the margin, by partially of and year period. versus over increased points XXX driven XX.X% the sales, promotional to margin decreased third sales Our of primarily in transportation prior XX.X% basis of decorative basis XXX higher XX net warehousing and XX% costs outbound basis in in by blankets quarter decrease pillows, Gross is inbound points product in other which This year by points transportation XX and the prior decreases includes costs period. offset a net accessories points driven discounting. in

and million in a primarily of million lower sales in was related XX.X% by as card in credit expense general partially period. equity-based in as offset current in million in selling, decreases to increased payroll, fees $X.X in third to compensation, an SG&A related in rent million increase increase $X.X XX.X% administrative investments percentage versus the professional of future $X.X was as equity-based and expense is prior million and investments The year $X.X compensation infrastructure in sales. in primarily growth. The rent dollars $X quarter million $X.X the business and well of payroll, fees, the net to percent net in support

the XX million to reduction from in of Rent percentage addition rent. expense $X.X increased related by $X.X in showrooms, offset million net million $X.X increase rent by partially a

expect fees the the million included the associated settlement financials of $X.X which We These are with was to with SEC. restatement very nonrecurring period the quarter, difficult approximately incremental third prior in forecast.

would hope these X.X% highlight applicable, million Advertising quarter. $XX.X third quarter if forward, going at in million for compared decreased prior Advertising year the and or smaller year each sales we'll sales And to the quarter compared in XX.X% and period. while marketing to third $X.X we the continue remained should expenses any, net much to XX.X% to prior period. expenses of flat of the marketing net be

million just of in driven Operating million the quarter discussed. the to compared factors was last loss quarter third for we $X.X by year, $X.X the

our Before in directly our refer and morning. share between of release comparable adjusted this loss please and earlier most net metrics our reconciliation we EBITDA, turn to loss, attention adjusted measurements GAAP the and terminology to their common issued net earnings per each

negative or share the $X.XX share the per $X.XX $X.X a period. for year to compared per million common $X.X or loss prior negative quarter loss in of million Net net was common

in as year. tax $X.X quarter, we income third the million to million $X.X benefit prior an of compared the During recorded

to million compared million year was for in prior as the period. EBITDA quarter Adjusted the $X.X $X.X

Turning to to flexibility our in third long-term very shareholders. Lovesac sheet. growth a balance creation the substantial healthy balance for invest sheet We enhance to provides with ended quarter for it value

First, $XX.X availability amended equivalents borrowings committed and in and recently we in credit retaining reported million million facility. while no cash on our $XX cash

While quarter our cash third and 'XX. it was balance 'XX was from down fiscal meaningfully fiscal the balances in slightly sequentially, up

lowest been we of as cash Third ahead historically seasonally selling quarter balance our holiday build the has flow season. inventory

So this cash position. emphasizes of our net the strength

merchandise projections. total in our our Second, levels line inventory are with

and times. quantity both in-stock our and feel quality maintain We very delivery and inventory about good of our ability positions industry-leading the to

XXX,XXX of price common for an our quarter, $XX.XX, at during we approximately million. repurchased $X.X shares Third, stock approximately the average of

This leaves authorization. approximately for share provide capital to We more managing our potential next strategic $XX.X repurchase Investor existing Day. million remaining excess under week at our our approach details plan around

Please release refer earnings financial to press on quarter details third our other our for performance.

Now outlook. for our

early challenge quite for anecdotal X evidence don't Cyber so was furniture that is just companies numbers Our hard period a we yet. have the

year category Our holds. for XX% still largely baseline decline full assumption a

So the the gains. of let full we aspire third or to it's share the grow improve from sustain roughly quarter. fiscal irrespective alone in unclear quarter whether we Regardless, declines category, deteriorate market fourth X% our will saw

primed initial our we category to a to to Investor outlook unique at as solid as time as business our recover than believe owing Day. in peers. on and always, real growth next from capitalize quickly more are soon and XQ rebound the happens Plus, lot aim it which about to model, We talk we'll our plan we the more secular have so, week do a

growth of As revenue to bottom growth. line line top should this expanding flow-through occurs, drive the additional

estimate million. the ranges. to full 'XX, year sales of $XXX We are lowering For $XXX million our fiscal we guidance net

million. We million EBITDA expect $XX.X $XX.X and between adjusted

a sales. common be in estimate million per $X.XX net the XX% and of margins and a net XX% million. XX%, between weighted share includes percent of average to shares marketing net SG&A and $XX.X million income percent sales estimate diluted and We of approximately of range We estimated having This of XX% of XX.X diluted to outstanding. $X.XX $X.X gross as to approximately as income approximately

in XX 'XX, fiscal reminder, the versus fiscal quarter. week an fourth will 'XX continue weeks additional a XXrd which As contain

For net million. $XXX the fourth sales to we of estimate quarter, million $XXX

and $XX adjusted EBITDA $XX million. between million expect We

approximately XX.X% SG&A sales net approximately million. and This as sales. and XX% includes a between advertising percent million estimate XX.X%, as $XX of margins of net to income gross of percent marketing net approximately $XX and a of of We

of approximately We shares unclear. common range million an conclusion, XX.X the us eventual growth estimate in exact diluted and $X.XX the if income of are category average estimated $X.XX to ahead and even timing of remains return outstanding. per weighted diluted category share of In stabilization that

we In near-term believe with come. value optimally the to generate thereby meantime, balance in stakeholder innovation years growth and performance we and positioning even while for us the investments category profitability product linger, can long-term to headwinds

session, Before ask to expectations. Q&A I call to operator refer primarily that to to like results our turn the and questions we'd back the over the start our near-term

around plan We'll our join and over presentations, even there Q&A We We our a products please you'll context that, This have framework, Day With plenty Tuesday, hope products, to operator. of will our strategic you, for amazing new full design financial at investorrelations@lovesac.com the really with. formal interact next growth to provide details. perspective for request to initiatives section. Investor e-mail event ambitions to and us XXth. include folks life and

[Operator Instructions]

. Our first with comes Maria line of from Genuity. Canaccord the question Ripps

First, I QX ask wanted just about outlook. your to

share on color updated sorry, about of delayed on of improvement? outlook. like at changes to talked how Can a much you that just is quarter catching and of last you quarter, -- in shipments, more implied up if look the delta versus prior maybe we category bit new factors broader So that attributable your products sort little guidance last sort sort of

supply is category. kick more surprises I'll the few there the had millions that StealthTech some stock chain being relatively were be to amounts in were last talk terms about in I'll pass job long between after did turned -- some about and to the the times over out great it the We as $X quarter, million. The millions the in single-digit and of a in previous delays we details. sourcing. we back Honestly, bit of teams or getting guidance Sure. and then Shawn little lead this biggest mid-single-digit the a in it now a delta little backlog to in talked than off, less

consistent. into all of very been were of to those even We've encouraging soft pulling it perspective, launching, forward and call, most like more recliner has mean was been what So from of I feedback get us. And this seen interest. us. quotes. actually, on we'll but that -- and relatively encouraging that's it it a great great to quite I'm factors conversion down sure to Really, boiled

you Shawn, that about So don't what talk little dynamic? more a bit why we've seen of in terms

think experiencing We way conversion, is in -- year-over-year. seeing as Yes. thing -- than more about spending supposed we're quotes I a the the we're is pre-holiday. other most business their the what with being cautious to our is particularly This functioning which anecdotally up heartening customers business it

and that of to share us process And years headwinds. is we're couple business. Obviously, tremendous not which a of now the in at until And that's to next on new drive going Day. continues news as early this Investor It's recognized this well sales, for repeat category severe persist. year business driving of the where the our that headwind pulled because launch have the to is we're the to as innovating. seeing X week that family offset forward last fight Meanwhile, enough and suite repeat put to that. Lovesac we minute And we're begins. of over, we've not well more got going exciting full that products, we've now drive to years we Look, over revenue into just including the people a fold recliner

few paranoid left in to sales, are consumer going over know And don't fiscal what's our about so business while are the remain we totally just day-to-day on transpire and driving that next exactly the we weeks year. focused

And end. is seeing optimistic so you're being on driving us focused that well as, the . business the of until guidance and cautious course, as

then in marketing you how inform can building sort the . strategy sort the maybe about for for broader your to talk product of awareness and brand your And year? pipeline it. Got of launches secondly, next approach next year recent

Shawn, I mute. you're on think

all I the strategy of going see you're year, to used design is Yes, further seeing rolled or think introductions X pace this life expansion mean, of I with to is a out. new increasing. a our you're exciting be most X launches Lovesac the what's It as at innovation for year. of

Now customers adopt brand ability us drive half provides dozen repeat. year. but a with gives their we've to fulsome our so done this lives, many And into this more than more opportunities not only to

to us us going their in then people spend of purchases the to flywheel this increase data is number where just great with we And them and business days We're make outcome. share few over some of years, on. time large a a speaks give not this add one as power opportunities that often with to a

this when the way, are sustainability, that make also later sustain can is than initial you aware unique and only no initial This is drive not consumer that on few totally it. landscape. more actually a There right? These allows company but valuable in the originally other in expand I'm products of that you that purchase years purchase truly made to

new the really of, Sactionals not we're only exciting speak and you're coming, so but aware see And to us. -- that that's evidence in to and to this Sacs of going platforms on you platforms are for going are

that, on Shawn, Yes. question. just add to Maria, your

So a couple of things.

continue and ideal customers build actually think minutes growth they configuration quotes strong the of their to choosing I more. the with with digits that's double cover. than us seen more customers awareness, the funnel. as very that we've and We And into even evidence their drive building XX And bringing spent part more and

opportunity. the we're about huge fact that able Marketing the see and Officer, amount and talked see very health second drive effectiveness. is obviously to opportunity of be that we Chief awareness a And brand So about that because first continuing our critical thing hiring funnel still for excited being we us to I going

you on such soft efforts was the we just our media matched and due which of teams, we product. talked This campaign. our just launch earlier shown recliner the we've is even a incredible, a haven't Herculean about as And it's to launch, great because pulled it

going is we a the what it and to then the and be at we now have attracting on recliner, and come just -- on to how early the customers incredible year half us have we add configuration current recliners why really switch planer a next new can to lot people campaign because going best and best are We have just about they can of buy wouldn't customers the market. didn't tell it into have that an considered

question from Maxim of Thomas next Our line comes Forte with the Group.

question the soft So one and launch. have I congrats recliner follow-up. on first, one

promotional a category, So for Shawn and your to protect including highly sales team, your is about what And think promotional willingness the strategy? to profitability? how should environment lose we

say and I'll can a Mary of things, on. Yes. add couple

have past to -- be X realm since off We things. the further not sometimes XX% and in particular, really our over strategy you'll than extend thoughtful what worked into COVID hard promotional see about years the different since

This us. is significantly admittedly marketplace, important broader from products and higher our much XX% off recognize And out do. XX%, we of catalog promotional a XX%, to lot our that. In than peers peers, the levels seeing we have seeing We're there. we're a different

to And that. obviously there disadvantages are advantages and

of the there. out promoting recliner our And it the particular, inventions as holding on to like new we table and products the heavily in for any line. the Lovesac and we're pertains some As are not new

because, that is believe end quite very year-on-year, little are being us fiscal hump original meet growth We sales doing up is doing a marketing to and over more our goals. cautious. need well quote time So is the we're seeing until get Why that? the a functioning we where still in We're said, machine of but bit we're that do that, we help Mary there to as and the this us double-digit right? conversion

we are here sling back the to and here brand. to make it and go on myopically build We're not pertains it forward, to StealthTech a just As focused that.

We that be a which new that a days. think categories, we're here believe And few in building brand talk will you us expand as for into just some of see decades. about I we'll

course, this confident in on time understand don't real why the go business You so of we're about forward. and

we're We've And that protecting built so category to slipping in. controlling SG&A. state the the profitability current cash. of being through We're not

crazy go where a feel with we're seeing promotions. discounts for not very good and position part. just we're that to the so about businesses the And most want in We we

Tom, I I last And think great test the agility. is that's of to a think one and Yes. we elements continue that our and to of is learn, add just bit, team

XX the as a innovation we are But have we that others goes do doesn't we're new XX, a the go the So uptake that in there. of discount long to see at have really of. yet always as brand. that. seeing have front XX, and of we'll our power promotions, all, And to talked as material we we deep And back continue good again, X as as need to don't

So work. and continue to really that that to conversion, appreciate those for able pull determined we pipeline them The to through be team strong quote tenacity. are to and

relative how margin then products? the follow-up, And gross decline for my to does or Wonderful. other compare your

it's margins. gross proud Yes, it really have line. in profile. to of our proud gross our in be this with line targeted We're We're of overall margin we've product.

highest that customers, in in the of customers seeing the exist And perhaps highest you adoption between almost category. know, the new obviously, moment, significant the at they're recliner into the category we're and their configuration. the adding or XX-XX As amongst

haven't it's . to extent. So we its full advertising and it softening, even begun

Matt line question comes Koranda next Partners. the with of Capital from Roth Our

could the the maybe, last week And that period. the then for what relative the apples get had the high to year. Black extra unpack a that guide? to in I stuff. if we see that's guidance, underlying interest trying it Wondering single to on is sense share Friday, Was just near-term digits did quarter guess sort guide. X% in comparison of is apples of embedded quarter specifically down in Just the assumption you line negative you focusing could you fourth during Cyber fourth tracking Monday omnicomp how with Keith,

So totally Matt, question, I think, we to appreciate that. fair

reasons. terms We Black have our Just for a to still be specific long they guidance, to there for this fold the understand of going as how clear way of go full a to QX I quarter. Friday totally not into couple to we're clear in trends in be

We growth year-over-year. double-digit have pipeline

let's conversion interest. large rates, configuration time this the, of in call some seen a particularly quarter. the There's have there's it, to tons go We at side? of lower here long very But

that people pipeline numbers, that phone We are we with entire relationships and converting. e-mail of focused quote on have

much. that be a and through to able would very pragmatic hope the lean ability we're conservative to converting right at But As like conversion pipeline factored the Shawn too taken what's approach now, a in. our that not we've were that's We more mentioned, we to going to quarter. that successful accelerate lot rest of the given in backdrop

showrooms period how would to is and What the the the the quotes with I couple that encapsulated period, the say, just we pertains QX. is Cyber within guidance of others fully is about gave think useful In and web X it, you let's Friday tell guidance call updated for you. things to, versus for Black omnichannel think terms I a it of

So in II first, July, of is MyHub, tool. and our had which out Remember, Phase CRM rolled our omnichannel we

as you and it's no in our your launch. showroom, we omnichannel that is Internet web, Lovesac, in whether growth on of people talked higher. us matter full with seamless see into website, the execute quote on begin come any expected as fold a showrooms, which engage but about, way now you the close now we've or to So whether close our driving continue it's sales with journey that, where it's to whether before the And have a then

expected omnichannel as totally that's So we is what want an and brand.

keep others, omni-channel QX, year-over-year see quotes really growth stable versus once The So is difference when trends you openings just and basis revenue in Internet mind. take QX, showroom the -- and the that on our you're Q QX. about will from between new sales that into growth the be a account, thinking omnicenral consistent you in the the the that contribution because that

delta same remain the well. in really, QX so And the will as

the have we That start in the to the on reads at put on Okay. that Maybe of anything the to that or place in that attach . like And you quotes the our All rates have guys recliner the it we that could Wondering on several times. front. -- helpful. be tools right. would growth finer have disposal maybe like terms then in it. mentioned you sounds initial given conversion just initiatives point very have you Got platform. boosting Sactionals curious conversion within just on this just challenge a near-term double-digit a quarter.

yes, me take Matt, those let questions.

we to as them So we pipeline we strength continue test with have, that think have I this e-mail addresses.

our We have with a be connect great to to able customers. way

of So around question timing? period, focus with this a gift they they we've of holiday shopping heard to came this is, build we'll test because terms just really a to in it period. just this. how It's buying holiday need want people on continue but drive that for is timing us a to know to lot in compressed in configuration Because through getting of terms they through that conversion. The matter

stay connected to of for We're -- holidays gift got testing a with see you a family. great that as events winter as leading to you're customers. couple we're a will to going our purchase, we've It going -- well with gift through your with convert

customers by agility that our very continue have strongly again, connections we relationships, the powered the and to we feel be organization through drive that and with, the we'll that the So of quarter. able with to the

and done they're the with both X units performance, we and it are excited any the comfort, and really in just that discount, work new they In into to that because teams. fact in stuff. we location a already weeks any recliner media or to of you're the we've a launched campaign the of results which in in a into are the and really power online, sold by the in, they're anyone put it great significantly And terms material incredible we us recliner just were this just about -- beating forward advantage back coming as terms innovation. coming as And believe are that customers blown initial and on mentioned that's of to the have this customers able telling love huge fractional of pulling showrooms good then Sactional, our just that feel level Shawn to that else. Early just component. also It X,XXX have ago of great the on over our KPIs. any they're very that setter. of adding already We've away super and add talked their without Customers is they switching to

without huge can the And up having also have then you wall for that. have is flat actually any to advantage against a which set it that clearance,

have the that zooming meantime, up, as after in opportunity the launch days, And are So a eyeballs buying for super campaign. early lot more to us line. X recliners drive the we the certainly teams the go are back through them just we the be able all We the to the to get quarter over opportunity there. improvement to customers across as need

very them. So we're for grateful

wrap of the Yes. what shortened entertaining for about as the And Mary said, space as as post And setting optimistic just it's which Mary we to celebrating or on to their month January, said, up shift think their end holiday for Christmas. or our Remember, until build Home strong I the about year. very we're a doesn't a Decor fiscal talked period year is shouldn't season, from also, thinking people right?

frenetic pace election, holiday think being dynamic I things of buying these on all And purchasing. to at of the so pile and change really

seeing leave we're or where look, might was you chase these guidance real remain We your it say, time. in So optimistic. why that, not shifts

have our of tools We a at lot disposal.

to this a that that, And point unique to pipeline really put finer speaks Lovesac. Mary on just of is

Let me explain why.

our do. line the for handheld Sactionals, While showroom into come of is experience They're certainly of there one in salespeople. good our particularly quotes and a without in what way not competitors landscape it's to unique with no a tremendous different generate they to at things, transact furniture some better on

us Lovesac going do the don't working requires most customer's of a price calling, you which at or ways where client This to a because in and play with be not notes, lot we're some can't from showrooms the we're our quite possible. around the we're competitors of their to I number just and wander and to gives can You're choice and such you're from sides reclining all look that really wasn't StealthTech think no as arms. information telling businesses cases, add-ons blocks, your can't to but that in people look gathered deep seats from tags e-commerce make is own at telling testing, clien either e-mail, that -- at going process to their complex

it we growth, just lot a face year of this the significant the Lovesac, enough a some way for Lovesac. we're sound the calm this of exactly. of so a It's because why will think is unique headwinds, in close seeing I a question really to it. close we'll it's find bit strength of if And before whether we these fiscal of And a end that's

so charge the questions. we to appreciate continue and And forward

Craig comes Capital question line Furman . Alex Holland next of from with Our Group. the

media I'd about to new the ask to the buying transition agency. love

there think some very early I this remember days year, were headwinds I earlier the the of just during transition.

during that peak some was gone? holiday about has you think Now season, you can time the And experience transition how more you've move. and that that had if a talk good

transition. very lot the and continued that a continue we as on Alex, good across, We moved their stronger, it power. see, in we everything but our both quarter performance has Yes, to thank media buying our you as return be to choppy on performance feel in shared much. we so based X was And about spend. before,

So to much better access get to better even as well as much their pricing just media ability spots.

they're key like really we cultural been time a a moving watching customers we terms ago. a more see search, than in of we've as as So lot and optimization effect that as lot which were lot investing moment do is a having real inflation just able in driving paid to of even medium MBA, year in know continually well things and more a we

strength opportunity the their side, them. though, that that a we've with on able good with as our led brands teams to conversion. our And working being continued do, that's about, very talked drive see and performance. from We of accelerated we feel obviously, So

resources for learn. really to just heavily are and even then get that piece they focused more we've into are we're in. to more. the the a able drive that influencer around doing going is job teams be we're more to starting seeing marketing. but to Again, done step like have continue So But think marketing with, shoppers to efforts the test us. I and great last tactics digital things And that really targeted localized

our at think, of have build So such Shawn effectiveness. demo, touch points a as important Lovesac talked an about, media a part just I and quote and is

continuing forward I drive So obviously seeing good, come looking think, end feel quarter through to and to those improvements through. that X

Our Nagel Oppenheimer. next question comes from the Brian with line of

for on Brian. is This Andrew

commented kind and market a in around your the a launches. the is prepared guidance. to know also product recent So period noting the strength first the and around follow-up on share positioning just of lot of around you gains remarks, QX Shawn, pre-election the near-term, I commentary the mid-term while competitive

the potentially for question in guess this we you what with should really, and positive commentary also being product softer share I market guidance gaining how So top post-election is are period? And line seeing the QX? balance on launches

It's question. a mixed bag sure. for Great Yes.

obvious how to same. post this the for election would certainly see be has We interested election are category we're choppy about consumer continued the to react reasons. the And pre-election all for -- post

for. haven't We consumer a in shift were major behavior hoping seen we perhaps that

shopping. as are hand, period. their cautious They're we wallets especially we this there, On pipeline, lot the are in being out being people a other the people quote just of and the with considered, combination quality shortened increased said, -- more more

a beat we're to for or which the gains, share and long Lovesac little the to it about, very fact that and have is down continued flat, category market a that depending talking despite the conclusions our time. comments been on As double-digit pertains were down there metric the bit from come fact has category

that we feel marketplace. looking data-obsessed, right? real-time real-time -- share market good to brand near or we we other also at so And our gaining have brands in -- Lovesac are so a is the we're we how compares brand And tracker.

landscape that the very we attention have We detailed to. research in close pay

and funnel marketing, real make guidance about to that a really super way through all good just the the we're efficacy not we did we quite in Christmas about feel quotes of our time closing on -- before of confident And the feel enough top mid-funnel before.

Christmas. And so we'll see what happens post

We levers. pull will to continue

And communicate. find clever to to ways to more we're ways continue will clever optimistic. promote, We more cautiously

been she in recognizing we're ideal. far, environment so for steady And is this category which that. goes, it's this not But as

the before. revenues Friday, Lovesac of a that thing And one this of third of program and through year and financing less the the time we addressing on the program. saw that that to we're almost Black XXX customers saw use flowing we understanding our is has dynamic been Through on that's quarter working add other real playing been through financing basis points our out

don't industry including as things around for equal came changes put fees shorter of interest. where program There's like have that earlier a of fee in that so is driving programs that and be with the on programs place year that, we've and been types payments toying forth. And that whole the there such, duration out through initial no this so number could

offer into us that's So conversion and what's quote sort that to So did of far? financing lean optimize that conversion? approach of day interesting. our to that the a in tweaking to process of the what's optimal with think we're I in Synchrony see at be for partner and of to to thus But quotes could the the another promotional help try if through that might leading be drive end part opportunity for less

commentary in. around heading that. you've year? additional throw the the you commentary had appreciate can reaction to Any various launches Absolutely. consumer And recliners reaction throughout I the consumer and then if We the appreciate around follow-up that. just And I around a product your provide other could

Yes.

sure, want Shawn, first? do -- you to take So it

No, ahead. you go

Yes.

customers seeing any table table see we're that table adding shared they're opportunity this all that quarter to lives support So opportunity have that out with new customers great with how before, in their of to can be I a any X, actually you they then coffee table able where and in came in-line with live great or functionality. current and

So Shawn not that. on been renovations. said, as around our we've promoting, we And see

just and are a And it through one So price of think seeing highlight is the engaging table. Accent terms is. in We're really learning any where PillowSac probably full again, the I particularly is the the larger in Chair. engagement as then other when feedback with customer customers, configurations

highlighted before, will as strong show start the off As did incredibly Chair that the of an out. we season. Accent sell We shared

and be around as back bit. the So back longer as that X did which that of we said, was on times, to to pull well recovery quarter see terms chain, supply is, Keith on us able switch starting then media a because there we're in with the little in lead

So excited don't few then that And weeks Shawn, particular, we launched if in just feel talk that very other ago. on a we exciting I we know, one, build you out. as to charge the the want innovation side about

I even innovations and ever, is share invested that faster list out building to of mean a this longest we've year. lot innovation a in headcount from reason and sales, and put a drive resource of this down to is our of big lot this and order for market in gains it investments Yes. speaks we're We've the the bigger and brand year the in Lovesac the of the picture made.

recognize believe to market we these product making. important, that we're for And think, share not things we're I we would making gains, the it's new that not introductions, be

this the And has ordered because We e, besides sold so of product. fram and famous on gone It's Instagram. viral of TikTok out kind its said, as we Internet now few. which Mary PillowSac too Accent not

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and of furniture a next only And course, course, all picture. lot we of driving? other this attachment and not innovations -- it once this Because up StealthTech in year very sticky a on come AOV driving to it's on overall driving right? loyalty it platform, have the you of over of, What's pays platform innovations. customer bigger the rate, top But off. It's can't it's you're

You investment a can change couple made repeat add business. driving bought when know could years huge of stuff to it's now be would this it thing you ago didn't your I but do even on also that it this local, X ago, StealthTech how years I a able

is been of innovations that I mentioned. few think that have a of most what's innovations, really exciting these these

insert the to And there's has your that covers surface we're been you've your talking the customer your protectors, covers about that investment. are the for. them, These or kids from the, and animals call protectors, by your asking products, protect that even got with the making are more, protecting way, we things message Sactionals on not these

with XX-XX almost mentioned, is right? what so adoption, about we're And introductions seeing all these

repeat business, seeing in it are coming old up on demoed we as real-time much new showroom. customers picking the We're they're because customers adding back as and

have We're we're G&A, brand decade, the macro this a in where It's quarter for that we'll ability focused not prudent exciting to We've build on business what and frustrating business. got really to just and the not or [indiscernible] a about levers the that's here we're cooperating, goes. we're are and a you, here to pull that see lots it to and going cash manner. manage here time. a it's protect we future. we're and cucumber, So meet lots the of is of But

back our to any Mr. and Ladies that Nelson concludes for question-and-answer final gentlemen, session. the turn you. . I'll Thank comments. floor

all employees hope of just holiday you you season. a to customers there, the want have all to say I business. we course, both really of drive. this support to family Lovesac to continue wonderful make that business thank Yes, And investors and out this the members

conference Thank This today's you. concludes call.

Thank You your at time. participation. your lines may disconnect you for this