Lovesac returns to reported profit, helped by tariff refunds

Lovesac ($LOVE) reported a second-quarter net profit of $7.4 million, compared with a $6.7 million loss a year earlier, as revenue edged up 0.4% to $161.2 million. The headline improvement was heavily influenced by approximately $21 million in tariff refunds and related interest. Comparable sales declined 1.9%, indicating that underlying demand remained softer than the reported profit result might suggest.

Adjusted EBITDA, which excludes the refund benefit, moved to a $1.3 million loss from a $0.8 million profit. Most of the refund was recognized through cost of goods sold, with smaller amounts in inventory and interest. The company ended the quarter without debt and with a larger showroom network. The results therefore show a stronger reported balance of profit and cash resources, but not a comparable improvement in underlying adjusted earnings.

Sources:

• Lovesac — second-quarter financial results