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Lovesac streamlines inventory costs as it streamlines operations

Supply Chain Management

Lovesac streamlines inventory costs operations

Using more efficient stock and supply chain methods, Lovesac reduced inventory by $11 million without sacrificing delivery times, the company said in an April 11 earnings call. 

On April 11, a news report announced that the total merchandise inventory decreased from $119.6 million in January 2023 to $98.4 million as of February 4. 

Mary Fox, President and CEO, stated that the furniture company's 18% decrease in inventory was due to reducing COGS and benefiting from lower expenses for inbound freight and warehousing. Fox added that lower incoming freight costs resulted in a $12.1 million drop in Lovesac's freight capitalization. A 10-K filing states that shipping and handling expenses decreased to $133.2 million in fiscal year 2024 from $159.7 million in FY 2023.

The CEO of Lovesac stated that the company has also added new operational and planning capabilities.

Fox has introduced a new order management system. This system aims to improve working capital efficiency, delivery metrics, and customer satisfaction. He continued by saying that new alliances allowed them to achieve incremental savings on incoming freight and logistics.

Lovesac will have the flexibility necessary to replenish its inventory if demand trends upward, according to Fox.

Keith Siegner, CFO and EVP of Lovesac, stated in an earnings call that the company is confident in the quantity and quality of its inventory. They also emphasized the importance of maintaining fast delivery times and sufficient stock availability in the industry.

Lovesac's inventory is on track according to their estimates. The CFO is confident that the company can maintain its stock and delivery schedules.

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