The Lovesac Co. (LOVE) PT Lowered to $20 at Canaccord

Canaccord analyst Maria Ripps lowered the price target on The Lovesac Co. (NASDAQ: LOVE) to $20.00 (from $22.00) while maintaining a Buy rating.

The analyst commented: "Lovesac's fiscal Q2 results were in line with expectations, with revenue and adj. EBITDA both within guidance and near consensus, while ~$21M of IEEPA tariff refunds lifted reported GM and EPS well above consensus. Net sales marked the company's highest quarterly total outside a fiscal Q4, with $6K+ configurations growing double digits against a strong prior-year comp on larger setups, premium fabrics, and newer innovations, while the sub-$6K customer has yet to return to growth, remaining pressured by macro headwinds. The Best Buy exit represented a headwind to total growth (160 bps of growth in 2Q26) while Sactionals net sales declined modestly, however newer categories including Snugg nearly tripled, and the Reclining Seat posted record attachment rates. On product timing, the three living-room launches originally slated for Q3 (the Snugg corner piece, ottoman and swivel base; an onshoring-linked Sactionals comfort innovation; and a premium large-format sectional platform) now arrive late in the quarter, with only the Snugg additions live for a meaningful part of Q3. Contribution from the other two pushed into Q4, with a fourth introduction planned for after the holidays and the new room still on track for FY28. That timing shift, coupled with a new pricing and promotional structure that is only four weeks in, drove a conservative reset of the outlook under new CFO Andrew Farag, with no macro improvement assumed and innovation driving the return to growth. While we are lowering our estimates and PT to $20 (from $22), we remain encouraged by the breadth of the 2H product cadence, which now spans four new offerings and includes add-ons that can be sold to the existing customer base. We maintain our BUY rating."

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