LOVE - Why Lovesac Stock Briefly Plunged Today
2023-08-17 16:50:03 ET
Shares of Lovesac (NASDAQ: LOVE) fell as much as 14.6% early Thursday, according to data provided by S&P Global Market Intelligence , then largely recovered to trade down around 4% as of 2:30 p.m. ET Thursday after the furniture retailer announced it will need to restate some of its previously reported financial results.
In a Securities and Exchange Commission (SEC) filing late yesterday, Lovesac disclosed that in June 2023 the company's audit committee of the board of directors commenced an internal investigation related to the discovery of a recorded journal entry in the quarter ended April 30 to capitalize $2.2 million of shipping expenses from the prior fiscal year ended Jan. 29.
As a result of that investigation, Lovesac now believes that its operating income and net income for the full fiscal year ended Jan. 29 were overstated by roughly $2 million to $3 million and $1.5 million to $2.5 million, respectively. Lovesac added that its operating income and net income were each overstated by less than $500,000 for its first quarter ended April 30. The overstatements resulted from errors with the methodology Lovesac used to calculate accrual of its last-mile freight expenses.
For further details see:
Why Lovesac Stock Briefly Plunged Today