EnFurniture maker Lovesac reported FQ4’21 (to Jan. 31) revenues which climbed 40.7% year over year, beating analysts’ expectations by 11.5 percentage points according to S&P CapitalIQ figures. The expansion included new product launches as well as a surge in furniture shipments industry-wide linked to stay-at-home spending during the pandemic.
The success involved “slightly higher freight and warehousing costs due to a shift in timing of inventory receipts” and the firm also expects “some headwinds from freight” expenses in the coming financial year according to CFO Donna Dellomo.
Panjiva’s data shows U.S. seaborne imports linked to the firm climbed 98.5% year over year in the three months to January 31 before accelerating to a 234.5% rise in February and 186% in March.
Source: Panjiva
The surge in shipments more recently may reflect offloading of products held up due to port congestion at the U.S. west coast ports. Manufacturing also won’t be plain sailing in the coming months product launches facing challenges “due to the global disruption in the supply chain of key components” according to CEO Shawn Nelson. They are by far from being the only firm facing such challenges with Nelson noting “raw material shortages and port delays are currently challenging across the industry“
The firm has started to adjust its supply chain in response to the need to (a) diversify for reliability purposes (b) mitigate costs from tariffs on imports from China, which are set to remain in place as discussed in Panjiva’s March 31 research and (c) take advantage of lower labor costs / proximity to raw materials.
U.S. seaborne imports linked to the firm from China fell to 25.2% of the total in Q1’21 from 56.6% in 2019. That’s been largely replaced by imports from Vietnam, which rose to 59.8% of the total from 42.9%, and Malaysia / others which increased to 15.0% from negligible levels over the Q1’21 versus 2019 period.
Source: Panjiva
