Lovesac sales up 2.4% but profit falls 65% on tariff costs and Best Buy exit

Filed April 2, 2026 · Period ending February 1, 2026 · Compared to 10-K Apr 10, 2025 · ~2 min read

Key Changes

• high

  Net income fell 65% to $4.1M as gross margin compressed 210bp, driven by 180bp increase in inbound transportation and tariff costs. Company partially offset headwinds with vendor concessions and price increases but higher promotions limited recovery.

  MD&A: Gross Margin verify on EDGAR →
• high

  Company exited Best Buy shop-in-shop partnership in June 2025, closing all locations by fiscal year-end and recording $1.5M impairment. Other sales channel fell 37% as company also stopped all barter transactions (zero revenue vs. $9M prior year).

  MD&A: Best Buy Exit verify on EDGAR →
• high

  New customer acquisition turned negative (-5.6%) while repeat customers grew 8.8%, now representing 50.4% of transactions. Company increasingly reliant on existing customer base to drive volume.

  MD&A: Customer Mix verify on EDGAR →