STAMFORD, Conn. — Despite a slight sales downturn in its third quarter and a revision of its outlook for the fourth quarter, Lovesac executives recognized several areas of opportunity for the retailer through the end of 2024 and into 2025 during the company’s earning call.
With the early soft launch of its Sactional Reclining Seat, the home furnishings brand is looking to capture the 25% of sectional shoppers who want reclining capabilities, said CEO Shawn Nelson. “We’ve been locked out the recliner market until this launch,” he added.
A full launch campaign for the new recliner is coming in 2025, said Mary Fox, president and chief operating officer, who noted this addition to the Sactional line is “off to a strong start” in its first few weeks, attracting both new shoppers to the brand and existing owners who want to upgrade what they have.
Innovation in the form of new products is coming more quickly, said Nelson. After years with two or three introductions, Nelson said Lovesac debuted a half-dozen items this past year and has more in the pipeline, including new platforms. New products, he said, “give us so many more opportunities to drive repeat business.”
While the home category “remains severely challenged,” said Nelson, Lovesac is being “thoughtful” in its promotional strategy by staying at or below the 30% off level and avoiding discounting new intros.
“We’re seeing higher promotional levels from our peers,” he said, noting some furniture retailers are discounting 40%, 50% or even 60%. “We’re here to build a brand,” he said. “We’re not in a position to go crazy on discounts.”
Lovesac is working hard, however, at converting quotes into sales before its fourth quarter wraps in late January. Nelson said the company felt pressure on average order size in the third quarter and saw less conversion of quotes into sales. The company is also reviewing its financing models to see if there are ways to optimize them to drive conversions, said Keith Siegner, executive vice president and chief financial officer.
The company will share more on its 2025 strategy during its investor day program on Dec. 17.
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