Lovesac Company shares plummeted in premarket trading after announcing Q2 results. A loss of 45 cents per share was reported, narrower than expected. Sales rose 2.5% to $160.53 million. Despite margin pressures, CEO Shawn Nelson remains confident in long-term value. Gross profit fell, EBITDA slumped, and operating loss increased.

Second-quarter sales driven by 0.9% omni-channel comparable net sales increase and 16 new showrooms. Lovesac opened six new showrooms and closed three during the quarter. Gross profit fell 1.9% to $90.6 million, with a 260 basis point drop in gross margin. Adjusted EBITDA decreased by 44.1%.

Operating loss was $8.8 million, up slightly from the previous year. Operating margin decreased to -5.5% of net sales. Cash balance as of August 3 was $34.2 million, compared to $72.1 million last year. Total merchandise inventory at the end of the quarter was $124.0 million.

Lovesac revised its fiscal 2026 guidance, lowering GAAP EPS to $0.52-$1.05 and reducing sales forecast to $710 million-$740 million. Stock price fell 14.89% to $17.66 premarket. The company aims to navigate evolving tariff landscape and deliver long-term value.

Read more at Yahoo Finance: Lovesac Cuts Outlook As It Navigates ‘Evolving Tariff Landscape’