The Lovesac Company (NASDAQ:LOVE) shares rose in Thursday's premarket session after the company reported fourth-quarter fiscal 2026 results that beat analyst expectations on both revenue and earnings.

Lovesac Beats Q4 Estimates on Revenue and EPS

The company posted EPS of $2.19, topping the $2.01 estimate, and revenue of $248.046 million, above the $242.775 million estimate.

Net sales increased 2.7% year over year to $248.0 million. Net income declined to $32.1 million from $35.3 million, while adjusted EBITDA fell 7.8% to $49.6 million.

Margins Pressure Results Despite Sales Growth

Gross margin contracted 230 basis points to 58.1%, driven by higher inbound transportation and tariff costs, along with increased outbound transportation and warehousing expenses.

Operating income declined to $44.9 million from $47.6 million. Showroom revenue rose 3.5% to $159.8 million, internet sales increased 12.3% to $79.2 million and omni-channel comparable sales grew 0.6%.

The company ended the quarter with 278 showrooms.

Full-Year Declines and Strong Cash Position

For fiscal 2026, net sales increased 2.4% to $697.1 million, while diluted GAAP EPS fell to 28 cents from 69 cents, and net income declined to $4.1 million from $11.6 million. Adjusted EBITDA decreased ...