The Lovesac Company (Nasdaq: LOVE) (“Lovesac” or the “Company”)
today updated its outlook for fiscal 2020 ahead of its
participation at the ICR conference.
- Fiscal 2020 net sales growth is expected to be approximately
40%.
- The Company expects an Adjusted EBITDA* loss in the $3.0
million to $4.0 million range for fiscal year 2020.
- Fiscal 2020 GAAP Net Loss is expected to be in the $15.4
million to $16.4 million range; Fiscal 2020 Adjusted Net Loss* is
expected to be in the $14.9 million to $15.9 million range
*Adjusted Net Loss and Adjusted EBITDA are non-GAAP measures and
defined below under “Non-GAAP Information.”
Shawn Nelson, Chief Executive Officer, stated,
“We expect to deliver full year sales growth of approximately 40%,
which is within the guidance range we previously provided. This
growth is being driven by our unique and differentiated product
offering and the strength of our disruptive, multi-channel model.
Adjusted EBITDA* is expected to be a loss of $3.0 million to $4.0
million primarily driven by increased marketing investments as we
continue to innovate, test and learn on the marketing front.”
Mr. Nelson continued, “We have completed our 17
planned showroom openings for the year for a total showroom count
of 90, which is a 20% increase over last year. As we look to fiscal
year 2021, we expect to continue to expand our showroom footprint
with 20 new showroom openings, or a 22% increase. When combined
with our e-commerce platform, pop-up-shops, and Macy’s
shop-in-shops, this will position us well to continue to expand our
market share in fiscal 2021 and beyond, when exciting new product
innovations will become an important driver of the business going
forward.”
As previously announced, the Company will be
participating in the ICR Conference, held at the JW Marriott
Orlando Grande Lakes in Orlando, Florida. The Company is scheduled
to present on Monday, January 13, 2020, at 4:00 p.m. Eastern
Time. A live audio webcast of the Company’s presentation will
be available online at investor.lovesac.com. Participants should
log in approximately 10 minutes prior to the start of the
presentation. A replay will also be available. Additionally, in
advance of the Company’s presentation, an updated investor
presentation has been posted to the investor relations portion of
the Company’s website.
About The Lovesac Company
Based in Stamford, Connecticut, The Lovesac
Company is a direct-to-consumer specialty furniture brand with
approximately 90 retail showrooms supporting its ecommerce delivery
model. Lovesac’s name comes from its original Durafoam filled
beanbags called Sacs. The Company derives a majority of its current
sales from its proprietary platform called Sactionals, a washable,
changeable, reconfigurable, and FedEx-shippable solution for large
upholstered seating. Founder and CEO, Shawn Nelson’s, “Designed for
Life” philosophy emphasizes sustainable products that are built to
last a lifetime and designed to evolve with the customer’s needs,
providing long-term utility and ultimately reducing the amount of
furniture discarded into landfills.
Non-GAAP Information
This press release includes the following
financial measures defined as non-GAAP financial measures by the
Securities and Exchange Commission (the “SEC”): Adjusted Net Loss
and Adjusted EBITDA. Adjusted Net Loss excludes the effect of
one-time costs related to the Company’s IPO in June 2018 and fees
associated with fundraising and reorganizing activities. We define
Adjusted EBITDA as net loss less interest income, plus income tax
expense, depreciation and amortization, management fees, deferred
rent, equity-based compensation, net (gain) or loss on the disposal
of property and equipment, one-time IPO-related expenses, and fees
associated with fundraising and reorganizing activities. The
Company has reconciled these non-GAAP financial measures with the
most directly comparable GAAP financial measures hereunder. The
Company believes that these non-GAAP financial measures not only
provide its management with comparable financial data for internal
financial analysis but also provide meaningful supplemental
information to investors. Specifically, these non-GAAP financial
measures allow investors to better understand the performance of
the Company’s business and facilitate a more meaningful comparison
of its actual results on a period-over-period basis. The Company
has provided this information as a means to evaluate the results of
its ongoing operations. Other companies in the Company’s industry
may calculate these items differently than the Company does. Each
of these measures is not a measure of performance under GAAP and
should not be considered as a substitute for the most directly
comparable financial measures prepared in accordance with GAAP,
such as net income/loss. Non-GAAP financial measures have
limitations as analytical tools, and investors should not consider
them in isolation or as a substitute for analysis of the Company’s
results as reported under GAAP.
THE LOVESAC
COMPANY
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(dollars in thousands) |
Preliminary estimate for the fiscal year ended February 2,
2020 |
Actual for the fiscal year ended February 3, 2019 |
Net Loss |
$ |
(16,400 |
) |
$ |
(6,704 |
) |
Interest income |
|
(600 |
) |
|
(355 |
) |
Depreciation and amortization |
|
5,100 |
|
|
3,134 |
|
Taxes |
|
50 |
|
|
16 |
|
EBITDA |
|
(11,850 |
) |
|
(3,909 |
) |
Management fees |
|
600 |
|
|
1,177 |
|
Deferred rent |
|
1,200 |
|
|
531 |
|
Equity-based compensation |
|
5,800 |
|
|
3,310 |
|
Net (gain) loss on the disposal of property and
equipment |
|
(166 |
) |
|
255 |
|
Other expenses |
|
500 |
|
|
2,020 |
|
Adjusted
EBITDA |
$ |
(3,916 |
) |
$ |
3,384 |
|
|
|
|
|
|
|
(dollars in thousands) |
Preliminary estimate for the fiscal year ended February 2,
2020 |
Actual for the fiscal year ended February 3, 2019 |
Net
Loss |
$ |
(16,400 |
) |
$ |
(6,704 |
) |
Other expenses |
|
500 |
|
|
4,088 |
|
Adjusted Net
Loss |
$ |
(15,900 |
) |
$ |
(2,616 |
) |
|
|
|
Cautionary Statement Concerning Forward Looking
Statements
Certain statements either contained in or
incorporated by reference into this communication, other than
purely historical information, including estimates, projections and
statements relating to our business plans, objectives and expected
operating results, and the assumptions upon which those statements
are based, are “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. These
statements are often, but not always, made through the use of words
or phrases such as “may,” “believe,” “anticipate,” “could,”
“should,” “intend,” “plan,” “will,” “aim(s),” “can,” “would,”
“expect(s),” “estimate(s),” “project(s),” “forecast(s)”,
“positioned,” “approximately,” “potential,” “goal,” “pro forma,”
“strategy,” “outlook” and similar expressions. All statements,
other than statements of historical facts, included in or
incorporated by reference into this press release regarding
strategy, future operations, future financial position, future
revenue, projected expenses, prospects, plans and objectives of
management are forward-looking statements. These statements are
based on management’s current expectations and/or beliefs and
assumptions that management considers reasonable, which assumptions
may or may not prove correct. We may not actually achieve the
plans, carry out the intentions or meet the expectations disclosed
in the forward-looking statements and you should not place undue
reliance on these forward-looking statements. Actual results and
performance could differ materially from those projected in the
forward-looking statements as a result of many factors. The
preliminary financial results included in this press release
represent the most current information available to management. The
Company’s actual results when disclosed on the Company’s fourth
quarter and fiscal year 2020 earnings conference call may differ
from these preliminary results as a result of the completion of the
Company’s financial closing procedures; final adjustments;
completion of the audit by the Company’s independent registered
accounting firm; and other developments that may arise between now
and the disclosure of the final results. Among the key factors that
could cause actual results to differ materially from those
expressed or implied in the forward-looking statements are the risk
of disruptions to current plans and operations, including the
timing of openings of new showrooms that further shift expect
growth to later periods, slower than expected growth during the
fourth quarter and risks related to tariffs, the countermeasures
and mitigation steps that we adopt in response to tariffs and other
similar issues, as well as those risks and uncertainties
disclosed under the sections entitled “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” in our most recent Form 10-K and Form 10-Q
filed with the Securities and Exchange Commission, and similar
disclosures in subsequent reports filed with the SEC, which are
available on our investor relations website at investor.lovesac.com
and on the SEC website at www.sec.gov. Any forward-looking
statement made by us in this press release speaks only as of the
date on which we make it. We disclaim any intent or obligation to
update these forward-looking statements to reflect events or
circumstances that exist after the date on which they were
made.
Investor Relations Contact:
Rachel Schacter, ICR (203) 682-8200
InvestorRelations@lovesac.com
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