Lovesac Co (NASDAQ:LOVE) stock plunges 14.34% (As on June 12, 11:22:57 AM UTC-4, Source: Google Finance) after the company provided loss guidance for the second quarter, well below analysts’ estimates. The company also maintained its outlook for the full-year 2026. The company has reported a net loss of $10.8 million, narrower than $13.0 million in the prior-year quarter. Gross profit increased $2.4 million, or 3.2% in the first quarter of fiscal 2026 compared to the prior year period. Gross margin decreased 60 basis points to 53.7% of net sales in the first quarter of fiscal 2026 from 54.3% of net sales in the prior year period primarily driven by a decrease of 230 basis points in product margin driven by higher promotional discounting, partially offset by decreases of 130 basis points in inbound transportation costs and 40 basis points in outbound transportation and warehousing costs. Operating loss was $15.0 million in the first quarter of fiscal 2026 compared to $17.9 million in the prior year period. Operating margin was (10.8)% of net sales in the first quarter of fiscal 2026 compared to (13.5)% of net sales in the prior year period. The cash and cash equivalents balance as of May 4, 2025 was $26.9 million as compared to $72.4 million as of May 5, 2024.

LOVE in the first quarter of FY26 has reported the adjusted loss per share of 73 cents, beating the analysts’ estimates for the adjusted loss per share of 83 cents. The company had reported the adjusted revenue growth of 4.3 percent to $138.4 million in the first quarter of FY26, missing the analysts’ estimates for revenue of $162.29 million. This is primarily driven by an increase of 2.8 percent in omni-channel comparable net sales and the net addition of 21 new showrooms. During the first quarter of fiscal 2026, the company opened 11 additional showrooms and closed 1 showroom.

For the second quarter, the company expects a loss in a range of $0.58 to $0.83 per basic share on net sales between $157 million and $166 million. On average, analysts polled expect the company to report a loss of $0.30 per share on revenues of $162.29 million for the quarter.

Looking ahead to fiscal 2026, the company continues to project earnings in the range of $0.80 to $1.36 per share on net sales between $700 million and $750 million. The Street is looking for earnings of $1.62 per share on net sales of $719.69 million for the quarter.