LOVESAC CO (NASDAQ:LOVE) Q2 2020 Earnings Conference Call - Final Transcript
Sep 11, 2019 • 08:30 am ET
Thank you. [Operator Instructions] Our first question is from Dave King with ROTH Capital Partners. Please proceed.
Thanks. Good morning, everyone. I guess, first off, what's driving the confidence in the Q4 growth versus the Q3 guidance you laid out? It sounds like that some of that's Macy's, but what are you anticipating from a two-year comp perspective versus what you had in Q2, and what you're expecting for Q3 and what's driving that?
Yes, consistently -- hey, Dave, this is Jack. We believe, roughly speaking, the two-year comps will maintain pretty consistent throughout the year. Obviously, we're going against tougher and tougher comparables. And the reason we feel confident in that is, it's harder to see in terms of total marketing spend on a quarter to quarter basis, but the working marketing, the effect of our working marketing, which starts in Q3 and goes into Q4 will be by far the greatest impact in Q4 with roughly year-over-year working media spends plus -- over plus 60% [Phonetic], whereas if you look at the effect of the Q3 media, it was roughly flat to a year ago. So that will give us a dramatic increase in comparable sales acceleration.
Okay. That helps.
And just a background on that, the reason that we're doing that delay is, as we've talked about earlier, we've had several tests going on. And as we do our analysis, the opportunities to implement have come really in the Q4 versus Q3.
Okay. And so, I know it's a little bit early on that front, but can you talk about the initial performance of the expanded regional media runs you had prior to Labor Day, are the ROIs increasing, you know, any early learnings so far?
Yeah. The pre-tentpole events, so the expansion of the events is showing increases in ROI and run rate. So at this point, we believe they will be part of the Q4 program. What I'll do -- I'll need to do is, we still haven't done sort of the final analysis of our Labor Day media. So, we'll be finalizing that in the next couple of weeks and then putting it into a Q4 finalized program.
Okay. That's good color. All right. Thanks for taking my questions.
Our next question is from Brian Nagel with Oppenheimer & Company. Please proceed.
The first question, I want to ask, and I apologize, Donna, when you were laying out the guidance for sales, Q3 and Q4, I maybe just missed it. Could you remind or reiterate what the sales guidance for the third and fourth quarter is and the components of that?
Yes. What we were saying is that year-over-year, total sales, well, we're expecting to increase about 30% with a significant increase in fourth quarter. So we are still lining in to the annual guidance of 40% to 45%. So we didn't give guidance for Q4, but it will be significantly higher than the high range of the 40% to 45%