Lovesac Co Q4 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Maria Ripps - Canaccord Genuity - Analyst : Great, good morning and thanks for taking my question. First, sort of understanding the situation is very fluid here, but is there any color maybe you can share around how you're thinking through your inventory strategy here given sort of the 90 day tariff delay? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 10, 2025 / 12:30PM, LOVE.OQ - Q4 2025 Lovesac Co Earnings Call I know you brought your inventory levels up in the end of the quarter, but how much of sort of inventory you're planning to pull forward from sort of countries outside of China maybe over the next couple of months?

Question: Maria Ripps - Canaccord Genuity - Analyst : Got it. That's very helpful, Mary. And then secondly, is there anything you can share sort of around consumer behavior here sort of more recently, maybe in February and more so in March, just given all the macro data points that we've been getting? Are you seeing any maybe softening in consumer spending here in the near term, I guess?

Question: Maria Ripps - Canaccord Genuity - Analyst : That's helpful. Thank you very much for the color.

Question: Matt Koranda - Roth Capital Partners - Analyst : Hey guys, good morning. Just wanted to see if maybe you could confirm for me. It looks like the midpoint of the Q1 range might incorporate the assumption of positive omnichannel comps. So I just wanted to see if you could maybe unpack that. And then just quarter-to-date, it sounded like Mary, you said, February was strong, but I think that's against a relatively easy comp from last year. So maybe just talk about the trends you saw into March and April. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 10, 2025 / 12:30PM, LOVE.OQ - Q4 2025 Lovesac Co Earnings Call And then lastly, just if you could maybe talk about sort of, I know it's really early and the sample size is small, but any consumer reaction function to sort of the Liberation Day announcements in terms of trends you saw over the last week?

Question: Matt Koranda - Roth Capital Partners - Analyst : Okay. I appreciate that. And then maybe just wanted to see about the way that we should think about pricing in reaction to some of the tariffs if they do end up sticking after the 90 days. How should we think about Lovesac's ability to take price increases? What would those come in the form of? Would that come in the form of a list price increase and we should expect the same sort of steady promotional cadence that you guys have been on? Just wanted to hear sort of your latest thoughts about how you sort of mitigate some of the tariff risk beyond just the change in vendor sourcing?

Question: Matt Koranda - Roth Capital Partners - Analyst : Okay appreciate it. I'll turn it over guys thanks.

Question: Thomas Forte - Maxim Group LLC - Analyst : Great, thanks for taking my questions. So I have one question on tariffs and one question not on tariffs, and I acknowledge it was hard to come up with a non-tariff question. All right. So it sounds like 13% of your sourcing is from China, and you're aiming to move it below 10%. If you wanted to, how quickly could you move it all out of China?

Question: Thomas Forte - Maxim Group LLC - Analyst : Thank you, Shawn. I appreciate that. All right. So for my non-tariff question, so when thinking about potential catalysts for home-related merchandise sales such as furniture, how should investors think about the potential for lower interest rates unlocking the housing market, resulting in more consumers moving. So recognizing it's a fluid situation, one silver lining from the market turmoil is that at times interest rates have been lower, we've read stories about large increases in mortgage demand. It seems like there's a lot of pent-up demand to move, which may be unlocked by lower rates. I would love your thoughts on this.

Question: Thomas Forte - Maxim Group LLC - Analyst : Great, thanks for taking my question.

Question: Alex Fuhrman - Craig Hallum - Analyst : Hey guys, thanks very much for taking my question. You've had a lot more products now than you've ever had, and it sounds like there's a lot more to come over the next couple of years. How does that impact how you think about your showroom strategy? Do you need to start opening larger showrooms or maybe start leaning on different distribution partners to market a wider range of products?

Question: Alex Fuhrman - Craig Hallum - Analyst : Great. That's really helpful, Shawn. Thanks and looking forward to seeing some of those innovations as they happen.