The Lovesac Company (LOVE) Misled Investors Regarding its Internal Control Over Financial Reporting
A shareholder filed a class action on behalf of all persons and entities that purchased or otherwise acquired The Lovesac Company (NASDAQ: LOVE) securities between March 30, 2023 and August 16, 2023. Lovesac designs, manufactures, and sells furniture, marketing its products primarily through the lovesac.com website, as well as through showrooms at top-tier malls, lifestyle centers, mobile concierges, kiosks, street locations, and in store pop-up-shops and shop-in-shops.
According to the complaint, during the class period, defendants failed to disclose that Lovesac did not properly account for last mile shipping and freight expenses. As a result, (i) Lovesac’s disclosure controls and procedures and internal control over financial reporting were ineffective and deficient, (ii) 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, and (iii) Lovesac was likely to restate one or more of its previously issued financial statements. When the truth was revealed in a Company filing on August 16, 2023, Lovesac’s stock price fell $0.70 per share, or 2.95%, to close at $23.06 per share on August 17, 2023.
What Now: Similarly situated shareholders may be eligible to participate in the class action against The Lovesac Company. Shareholders who want to act as lead plaintiff for the class should contact Robbins LLP. Plaintiffs must file their lead plaintiff papers by February 20, 2024. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. If you choose to take no action, you can remain an absent class member.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.