Free cash flow generation is highly erratic, ranging from a peak margin of 31.6% in 2026Q4 to a low of -36.2% in 2026Q1, largely driven by volatile working capital swings.
| Cash from Operations | 55.35M | 49.32M | 38.98M | 76.44M | -21.38M | 32.65M | 40.52M | -11.19M | -7.01M | -2.74M | -6.48M | -8.87M |
| Operating CF Margin % | - | 7.07% | 5.73% | 10.92% | -3.28% | 6.55% | 12.63% | -4.8% | -4.22% | -2.69% | -8.48% | -11.97% |
| Operating CF Growth % | 184.99% | 26.53% | -49.01% | 457.62% | -165.47% | -19.43% | 461.99% | -59.74% | -155.72% | 57.69% | 27% | - |
| Net Income | 3.81M | 4.07M | 11.56M | 23.86M | 26.49M | 47.49M | 14.73M | -15.21M | -6.7M | -5.5M | -6.87M | -8.99M |
| Depreciation & Amortization | 15.67M | 15.21M | 14.71M | 12.6M | 10.84M | 7.86M | 6.61M | 5.16M | 3.13M | 2.21M | 2.11M | 2.38M |
| Stock-Based Compensation | 5.11M | 5.51M | 7.95M | 4.22M | 10.45M | 5.86M | 4.68M | 5.25M | 3.31M | 950.55K | 25.74K | 36.85K |
| Deferred Taxes | -125K | 1.89M | -4.47M | -2.13M | 1.04M | -9.72M | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Non-Cash Items | 28.84M | 29.04M | 25.44M | 22.89M | 19.47M | 15.43M | 3.98M | 1.42M | 906.6K | 700.87K | 286.82K | 1.34M |
| Working Capital Changes | -654K | -6.39M | -16.2M | 14.99M | -89.67M | -34.27M | 10.52M | -7.81M | -7.65M | -1.1M | -2.03M | -3.64M |
| Change in Receivables | -136K | 5.05M | -3.32M | -4.36M | -555K | -4.03M | 2.67M | -3.23M | -1.15M | -1.8M | 180.41K | -394.96K |
| Change in Inventory | 15.66M | 18.02M | -25.89M | 21.19M | -11.13M | -56.82M | -14.02M | -10.25M | -14.51M | -2.21M | -1.05M | -1.94M |
| Change in Payables | 19.08M | -8.89M | 22.39M | 2.67M | -12.77M | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Cash from Investing | -20.63M | -24.02M | -21.52M | -29.21M | -25.55M | -15.12M | -9.05M | -10.65M | -11.36M | -6.81M | -3.99M | -1.15M |
| Capital Expenditures | -19.94M | -24.02M | -21.03M | -28.74M | -25.24M | -14.62M | -8.37M | -10.28M | -10.75M | -6.64M | -3.68M | -965.17K |
| CapEx % of Revenue | 2.86% | 3.45% | 3.09% | 4.1% | 3.88% | 2.93% | 2.61% | 4.4% | 6.48% | 6.52% | 4.82% | 1.3% |
| Acquisitions | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -1.05M | 0 | -491K | -475K | -307K | -503K | -678K | -374K | -614.51K | -172.86K | -304.76K | -189.46K |
| Cash from Financing | -4.62M | -7.18M | -20.76M | -3.73M | -1.94M | -3.48M | -1.67M | 21.31M | 58.26M | 17.85M | 11.13M | 9.87M |
| Debt Issued (Net) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -31.37K | 30.97K | -3.29M | 116.07K | -3.91M |
| Equity Issued (Net) | -2.74M | -6M | -19.93M | 0 | 0 | 0 | 0 | 25.61M | 58.91M | 21.14M | 11.27M | 13.79M |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -2.74M | -6M | -19.93M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -2M |
| Other Financing | -2.25M | -1.18M | -833K | -3.73M | -1.94M | -3.48M | -1.67M | -4.27M | -674.63K | 0 | -250.09K | 0 |
| Net Change in Cash | 30.1M | 18.12M | -3.3M | 43.5M | -48.86M | 14.05M | 29.8M | -532K | 39.9M | 8.3M | 669.86K | -154.63K |
| Free Cash Flow | 35.35M | 26.18M | 17.46M | 47.23M | -46.92M | 17.53M | 31.47M | -22.14M | -18.37M | -9.55M | -10.46M | -10.03M |
| FCF Margin % | 5.07% | 3.76% | 2.57% | 6.74% | -7.21% | 3.52% | 9.81% | -9.49% | -11.07% | -9.38% | -13.7% | -13.52% |
| FCF Growth % | 293.17% | 49.95% | -63.03% | 200.65% | -367.68% | -44.29% | 242.1% | -20.55% | -92.36% | 8.72% | -4.34% | - |
| FCF per Share | 2.41 | 1.78 | 1.04 | 2.87 | -2.94 | 1.09 | 2.05 | -1.55 | -1.74 | -0.74 | -0.81 | -0.75 |
| FCF Conversion (FCF/Net Income) | 9.27x | 12.13x | 3.37x | 3.20x | -0.81x | 0.69x | 2.75x | 0.74x | 1.05x | 0.50x | 0.94x | 0.99x |
| Interest Paid | 112K | 122K | 112K | 146K | 192K | 95K | 85K | 63K | 61.44K | 173.45K | 495.27K | 1.04M |
| Taxes Paid | 9.99M | 9.97M | 8.45M | 1.81M | 10.67M | 1.12M | 86K | 43K | 18.25K | 25.77K | 0 | 0 |
High Working Capital Volatility
As reported in recent financial statements, the relationship between net income and operating cash flow is highly erratic, with OCF/NI ratios swinging from 3.19 in 2027Q1 to -1.83 in 2026Q2, suggesting that reported earnings are a poor proxy for the company's actual cash-generating capacity.
The significant divergence between net income and operating cash flow indicates that non-cash items and working capital swings are masking the underlying cash reality. Investors should monitor whether this volatility is a structural feature of the company's inventory-heavy business model or a temporary byproduct of seasonal supply chain management.
Based on the provided quarterly data, free cash flow margins have demonstrated extreme instability, ranging from a peak of 31.6% in 2026Q4 to a low of -36.2% in 2026Q1, reflecting a business model that remains heavily dependent on seasonal revenue spikes to achieve positive cash flow.
The inability to generate consistent free cash flow outside of the fourth quarter suggests that the company's current operating structure is not yet self-sustaining. This trajectory implies that capital requirements for growth continue to outpace the cash generated from core operations during the majority of the fiscal year.
According to recent SEC filings, working capital changes are the primary driver of cash flow volatility, with a $34.0M outflow in 2027Q1 contrasting sharply with a $30.3M inflow in 2026Q4, highlighting the company's sensitivity to inventory build-up and the timing of accounts payable settlements.
The aggressive swings in working capital suggest that the company is utilizing its supply chain as a primary lever for cash management. This reliance on timing differences may indicate that the underlying business lacks the organic cash flow generation required to fund its own operations without significant seasonal adjustments.
As indicated by the company's reported figures, capital expenditures have remained relatively disciplined, with CapEx/Revenue ratios fluctuating between 1.6% and 6.2% over the last ten quarters, suggesting that the firm is not currently over-investing in fixed assets despite its aggressive showroom expansion strategy.
While the capital intensity appears manageable, the consistent outflow for CapEx during periods of negative operating cash flow exacerbates the company's liquidity pressure. Analysts should investigate whether these expenditures are primarily maintenance-related or if they represent growth-oriented investments that have yet to yield a measurable return on invested capital.
Quick answers to the most common questions about buying LOVE stock.
The Lovesac Company (LOVE) generated $49.3M in net cash from operating activities in 2026. This reflects the cash generated directly from core business operations.
The Lovesac Company (LOVE) generated $26.2M in free cash flow in 2026. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
The Lovesac Company (LOVE) spent $24.0M on capital expenditures in 2026. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2026, The Lovesac Company (LOVE) spent $6.0M on share repurchases. This shows the company's commitment to returning capital to its equity investors.