Lovesac1

Lovesac shares plunged 16% on Tuesday after the furniture retailer warned President Donald Trump’s tariffs on Chinese goods would weigh on profits this year.
The maker of Sactionals and Sacs revealed a first-quarter drop in gross margin, and warned of a similar decline this quarter.
Lovesac’s plan of action is to shift all production out of China in the next 18 months, and raise prices “invisibly to the customer.”
Watch Lovesac trade live.

Lovesac plunged 16% on Tuesday after the furniture retailer warned the Trump administration’s tariffs on Chinese goods would weigh on its profits this fiscal year.

Lovesac sells Sacs bean bags and modular furniture sets called Sactionals. Sales of Sactionals surged 65% in the first quarter and Sacs revenue rose 10%, while sales of other products such as pillows and blankets jumped 43%, according to its earnings report.

However, tariffs of 10% on furniture imports from China inflated Lovesac’s costs, narrowing its gross margin by 3.4 percentage points to 51.3%. On the company’s earnings call, management guided towards a similar decline this quarter. Selling, general, and administrative costs also jumped 57%, exceeding gross profits and fueling a 69% rise in adjusted operating losses to $9.1 million.

Lovesac makes most of its …read more


Source:: Businessinsider – Finance

      

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