Critical Contrast: Caleres (NYSE:CAL) versus Lovesac (NASDAQ:LOVE)

Lovesac (NASDAQ:LOVE) and Caleres (NYSE:CAL) are both small-cap consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, profitability, institutional ownership, analyst recommendations, risk and valuation.

Earnings and Valuation

This table compares Lovesac and Caleres”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lovesac	$697.11 million	0.33	$4.07 million	$1.22	12.95
Caleres	$2.76 billion	0.16	-$6.69 million	$1.50	8.48

Lovesac has higher earnings, but lower revenue than Caleres. Caleres is trading at a lower price-to-earnings ratio than Lovesac, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Lovesac and Caleres, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lovesac	0	1	3	0	2.75
Caleres	0	3	0	0	2.00

Lovesac presently has a consensus price target of $21.33, suggesting a potential upside of 35.02%. Given Lovesac’s stronger consensus rating and higher probable upside, research analysts clearly believe Lovesac is more favorable than Caleres.

Volatility and Risk

Lovesac has a beta of 2.11, indicating that its share price is 111% more volatile than the S&P 500. Comparatively, Caleres has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500.

Insider & Institutional Ownership

91.3% of Lovesac shares are held by institutional investors. Comparatively, 98.4% of Caleres shares are held by institutional investors. 7.8% of Lovesac shares are held by insiders. Comparatively, 3.1% of Caleres shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Lovesac and Caleres’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lovesac	2.56%	2.57%	1.02%
Caleres	1.85%	7.84%	2.42%

Summary

Lovesac beats Caleres on 9 of the 14 factors compared between the two stocks.

About Lovesac

The Lovesac Company designs, manufactures, and sells furniture. It offers sactionals, such as seats and sides; sacs, including foam beanbag chairs; and other products comprising drink holders, footsac blankets, decorative pillows, fitted seat tables, and ottomans. The company markets its products primarily through www.lovesac.com website, as well as showrooms at top tier malls, lifestyle centers, mobile concierges, kiosks, and street locations in 41 states in the United States; and in store pop-up- shops and shop-in-shops, and barter inventory transactions. The Lovesac Company was founded in 1995 and is based in Stamford, Connecticut.

About Caleres

Caleres, Inc. engages in the retail and wholesale of footwear business in the United States, Canada, East Asia, and internationally. It operates through Famous Footwear and Brand Portfolio segments. The company offers licensed, branded, and private-label athletic, casual, and dress footwear products. The company provides brand name athletic, casual, and dress shoes, including Nike, Skechers, adidas, Vans, Crocs, Converse, Puma, Birkenstock, New Balance, Under Armour, Dr. Martens, Asics, Timberland, Bearpaw, Skechers, HeyDude, Franco Sarto, Rykä, Vince, Bzees, Veronica Beard, and Zodiac brands, as well as company-owned and licensed brands, such as LifeStride, Dr. Scholl’s Shoes, Blowfish Malibu, and Naturalizer. The company also operates naturalizer.com, naturalizer.ca, vionicshoes.com, samedelman.com, samedelman.co.uk, allenedmonds.com, allenedmonds.ca, drschollsshoes.com, lifestride.com, francosarto.com, ryka.com, bzees.com, and zodiacshoes.com, as well as Vince.com, blowfishshoes.com, and veronicabeard.com websites. In addition, it designs, sources, manufactures, and markets footwear to retail stores, such as online retailers, national chains, department stores, mass merchandisers, and independent retailers. Further, the company wholesales men’s footwear, apparel, leather goods, and accessories under the Allen Edmonds brand; footwear for women under LifeStride brand; Italian footwear Franco Sarto brand; athletic footwear for women under the Rykä brand; women’s shoe collection under the Vince brand; women’s footwear under the Bzees brand; and women’s footwear collection under Veronica Beard brand. The company was formerly known as Brown Shoe Company, Inc. and changed its name to Caleres, Inc. in May 2015. Caleres, Inc. was founded in 1878 and is headquartered in Saint Louis, Missouri.