The Lovesac Company Common Stock 2026 Global Consumer & Retail Conference

Yeah. This is the worst environment for home furnishings since 2008, 2009, 2010, and you could argue worse than that, especially in our niche category for couches. To give you context in terms of Lovesac specifically, we're very proud to have 10X'd the company roughly since we came public around 2018, and then gotten to a place where we haven't had a big down year, even over the past four years of post-COVID recovery. For the home category, there was just massive pull forward in especially bigger ticket items like mattresses and sofas, and what we sell during COVID, and the hangover from that is still very real. On top of that, of course, interest rates, worst housing market in a very long time, and that's the environment we find ourselves in.

But we've maintained, and because we've maintained, where most of our competitors have had at least one big down year in this last four-year moment, we've taken more market share, strangely, than even when we were on a trajectory at 10X-ing the company because we've maintained our position. While we're not growing a ton in the last four years, we've kind of stayed flat around $700 million in annual sales. We're pretty proud of that. The consumer, to answer your question, is a mixed bag. I think everything we're all reading over and over again, the K-shaped recovery, high end, low end. Lovesac continues to do decently in this category because we have a high-end product that is highly differentiated, and that consumer still has some strength. But I think everyone's under pressure in this environment, whether it be macro forces, gas prices, inflation.

And so what we've done is use these last four years to really innovate, and we are now just unleashing a pretty rapid series of meaningful innovations that have occupied our time and energy and cash over these past four years. We've been trying to use that time wisely, and if the macro environment ever does turn to the better, we're going to be in great shape to capitalize on that. If not, we're going to find our way to secular growth, with or without help from the macro.

Yeah. Lovesac is arguably the leader, and at least a serious leader in sectional sofas in the United States of America. The Sactionals business, that is our highly modular sectional sofa platform that is not just a traditional sectional, it is totally different, it is only from Lovesac, IP protected in many ways, has been wildly successful for two decades. Meanwhile, we have continued to innovate on that platform to drive AOV with innovations like our recliner that you can add on, even to pieces you bought 10 years ago. StealthTech, our surround sound charging system that is embedded and can eventually grow into a whole home system, I think. Lots of aesthetic and functional innovations on that platform. But we know through our own research, because we are really not a traditional merchant-led retail business that is just trading on taste and aesthetic.

We do deep research from a CPG kind of approach to business to understand the needs that are or are not being met by our products and by the category broadly, and then we go innovate against those. The big opportunity we see in the near term is we can take more share of the sectional sofa, couch category by having a small platform, a medium platform for everyone, that is what Sactionals already is and expanding, and even a larger platform. To answer your question specifically, Snugg is our small platform. We launched it as just sofa love seats, armchairs.

We have now just last week almost expanded it to corner piece, ottoman, swivel for that armchair, which is allowing us to capture more and more market share at that entry level price point that we have heretofore struggled to capture because Sactionals are inherently on the more expensive end, given all of their features and flexibility. Now, this Snugg platform gives you some of that Lovesac modularity, all of that Lovesac future growth, including the reverse compatibility that we are famous for. In a smaller package, not quite as feature-rich as Sactionals, but really helps us at that smaller entry level. And then on the other end, we are just about to launch. We are a couple of weeks away from going live with an even bigger platform coming, and we have not named it.

I mean, we have, but we haven't announced the name, but it's really exciting, and the inventory's in the warehouse, and we're about to unleash it on Q4, and that will drive, we think, even more sales at the very high end. Speaking of that K-shaped curve and give us more strength where we're already seeing strength in the business, but with an aesthetic that we don't currently offer from Sactionals that we know customers want.

Yeah. So an important thing to remember is we already have a big established customer base. Nearly 1.5 million strong of people in our database who love our brand, have chosen our brand, spent many thousands of dollars with us typically, and they have more rooms in their home. I have Snugg in my home office, I have Snugg in my bedroom, I have Snugg swivel chairs flanking my Sactionals out in our great room, and I've got a place just waiting for that new larger platform that I described that will help us compete. Number one, we'll always be remarketing to our established customer base who knows and loves us for all the reasons that you should love Lovesac. Built to last, designed to evolve, here for life. No other brand brings it that way. But we know who our customer is very deeply.

We've kind of segmented it into three distinct categories. One of them, we like to call the have-it-alls. This is the customer who is actually on the older side, but they're changing their home, they're investing in remodeling. That's a big customer set for us, and that bigger platform especially is going to speak to them, we think. And these other platforms for the reasons I described. We also approached the want it all. These are your young families that are establishing their homes now they're maybe stuck in their homes, choosing to remodel in this environment. And again, these platforms really speak to these same customers that we've been targeting, but in new ways and different ways that we just weren't able to deliver on before.

We continue to stay focused on the same customer groups, but now with new messaging to both capture those that have ignored us before and recapture those that can spend more with us.