The Law Offices of Frank R. Cruz Announces the Filing of a Securities Class Action on Behalf of The Lovesac Company (LOVE) Investors

The Law Offices of Frank R. Cruz announces that a class action lawsuit has been filed on behalf of persons and entities that purchased or otherwise acquired The Lovesac Company (“Lovesac” or the “Company”) (NASDAQ: LOVE) securities between March 30, 2023 and August 16, 2023, inclusive (the “Class Period”). Lovesac investors have until February 20, 2024 to file a lead plaintiff motion.

If you are a shareholder who suffered a loss, click here to participate.

On August 16, 2023, Lovesac disclosed that it identified “certain errors with the methodology used by the Company to calculate the accrual of its last mile freight expenses applicable to the Company’s financial statements for the fiscal year ended January 29, 2023 and the thirteen weeks ended April 30, 2023.” The Company further disclosed that “as a result of the identified errors related to last mile freight expenses, the Company believes that previously reported operating income and net income were overstated by approximately $1.5 million to $2.5 million and $1.0 million to $2.0 million, respectively, for fiscal year 2023.” As a result, Lovesac disclosed that it needed to restate certain previously-issued financial statements.

On this news, the Company’s share price fell $0.70, or 2.9%, to close at $23.06 per share on August 17, 2023, thereby injuring investors.

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) Lovesac did not properly account for last mile shipping and freight expenses; (2) accordingly, Lovesac’s disclosure controls and procedures and internal control over financial reporting were ineffective and deficient; (3) as a result of all the foregoing, Lovesac overstated its gross profit and operating and net income, as well as understated its shipping and handling costs and accrued freight and shipping expenses, in its previously issued financial statements; (4) accordingly, Lovesac was likely to restate one or more of its previously issued financial statements; and (5) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.

Follow us for updates on Twitter: twitter.com/FRC_LAW.

If you purchased Lovesac securities during the Class Period, you may move the Court no later than February 20, 2024 to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you purchased Lovesac securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 2121 Avenue of the Stars, Suite 800, Los Angeles, California 90067 at 310-914-5007, by email to info@frankcruzlaw.com, or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

View source version on businesswire.com: https://www.businesswire.com/news/home/20231221379064/en/

The Law Offices of Frank R. Cruz Announces the Filing of a Securities Class Action on Behalf of The Lovesac Company (LOVE) Investors