La-Z-Boy Incorporated Reports Strong Third Quarter Results

La-Z-Boy Incorporated, a global leader in the retail and manufacture of residential furniture, reported strong third quarter results for the period ended January 25, 2025. For the quarter, sales totaled $522 million, growing 4% against the prior year comparable period. Operating margin was 6.7% for the quarter on a GAAP basis and 6.8% on a Non-GAAP⁽¹⁾ basis. Diluted earnings per share totaled $0.68 on a GAAP and Non-GAAP⁽¹⁾ basis. The company returned $90 million to shareholders year-to-date, up approximately 40% versus the prior year comparable period.

Fiscal 2025 Third Quarter Highlights:

• Consolidated delivered sales of $522 million
  • Up 4% versus prior year
• Operating margin on a GAAP and Non-GAAP basis improved 20 basis points versus prior year
• GAAP and Non-GAAP⁽¹⁾ diluted EPS of $0.68
• Delivered sales and Non-GAAP⁽¹⁾ operating margin at high end of guidance range
• Retail segment sales increased 11%
  • Fueled by same-store sales growth and independent La-Z-Boy Furniture Galleries^® acquisitions, along with new stores
  • Retail added three newly opened stores, and two newly acquired independent La-Z-Boy Furniture Galleries^® stores, with one closure; and announced an additional two-store acquisition expected to close in the fourth quarter

Written sales trends sequentially accelerated, with third quarter total written sales for the Retail segment (company-owned La-Z-Boy Furniture Galleries^®) increasing 15% versus a year ago and written same-store sales (which exclude the impact of newly opened stores and newly acquired stores) up 7% versus a year ago. Sales strength was broad based with all key markets posting positive same-store sales trends driven by strong execution and sequential improvements in traffic. Written same-store sales for the entire La-Z-Boy Furniture Galleries^® network also increased 5% versus the year ago period. Performance continues to outpace the broader industry with market share gains in the quarter.

Melinda D. Whittington, Board Chair, President and Chief Executive Officer of La-Z-Boy Incorporated, said, “Our third quarter results reflect the steady progress we have made to build a more agile business, create our own momentum, and drive growth in what is still a challenged environment. We delivered sales growth across each of our segments, punctuated by strong Retail same-store sales. This was driven by solid conversion rates, average ticket, and design sales, all of which improved again year-over-year. Additionally, within our Wholesale segment, our core North America La-Z-Boy brand continues to post sales growth and margin expansion. Our vertically integrated model reinforces the unique strength of our iconic brand and positions us to disproportionately benefit when the market rebounds. We are a trusted solution for a growing number of consumers and will remain steadfast in our mission of bringing the transformational power of comfort to people, homes, and communities.

Whittington added, “As we look to the future, our brand, and it’s well-known attributes of comfort and quality, will be further supported by our expanding consumer insights. We believe this is creating a flywheel with improved innovation, strong speed to market, and improved brand reach and profitability. While underlying housing fundamentals remain challenged, we are focused on solving for the unique needs of the consumer with comfort and quality and controlling what we can control with strong execution. This is the foundation to what has led La-Z-Boy Incorporated to be successful for the past century and will continue to be the cornerstone of our philosophy for our Century Vision strategy and next 100 years.”

Fourth Quarter Outlook:

Taylor Luebke, SVP and Chief Financial Officer of La-Z-Boy Incorporated, said, “Our strong written trends and sequential acceleration in our Retail and Wholesale businesses is a testament that our Century Vision strategy is enabling us to outperform the industry. We will continue to focus on growing our core La-Z-Boy brand by disproportionately expanding our Retail segment and driving strategic, compatible distribution in the Wholesale segment. We delivered results above a year ago and at the higher end of our sales and margin expectations for the quarter despite continued challenging macro conditions. Our expectation is for industry trends to remain under pressure, though we expect to continue to outpace the industry. Assuming no significant changes in tariffs, we expect fiscal fourth quarter sales to be in the range of $545-565 million and Non-GAAP operating margin⁽²⁾ to be in the range of 8.5-9.5%.”

Fiscal 2025 Third Quarter Results versus Fiscal 2024 Third Quarter:

• Consolidated sales in the third quarter of Fiscal 2025 increased 4% to $522 million versus last year, primarily driven by strong same-store sales, acquisitions and new stores in our Retail business, momentum in our core North America La-Z-Boy Wholesale brand, and strong sales growth in our Joybird business
• Consolidated GAAP operating margin was 6.7% versus 6.5%
  • Consolidated Non-GAAP⁽¹⁾ operating margin increased 20 basis points to 6.8% versus 6.6%, driven by lower input costs (reduced commodity prices and improved sourcing) partially offset by the impact of a significant customer transition in our international wholesale business
• GAAP diluted EPS increased to $0.68 from $0.66 and Non-GAAP⁽¹⁾ diluted EPS totaled $0.68 versus $0.67 last year in the comparable period

Retail Segment:

• Sales:
  • Written sales for the Retail segment (company-owned La-Z-Boy Furniture Galleries^® stores) increased 15% with broad based growth from increases in same-store sales, and new and acquired stores compared to the year ago period
    • Written same-store sales increased 7%, driven by strong execution with higher conversion rates, average ticket, and design sales
  • Delivered sales increased 11% to $228 million versus last year, primarily due to higher same-store sales and growth from acquired and new stores
• Operating Margin:
  • GAAP operating margin and GAAP operating income were 10.7% and $24 million, versus 10.9% and $22 million, respectively
    • Non-GAAP⁽¹⁾ operating margin and Non-GAAP⁽¹⁾ operating income were 10.7% and $24 million, down 20 basis points, and up 10%, respectively, driven by sales growth offset by an increase in selling expenses and fixed costs supporting our long-term strategy of growing our Retail business.

Wholesale Segment:

• Sales:
  • Sales increased 2% to $363 million, driven by our core North America La-Z-Boy brand through favorable shift in product/channel mix with higher sales to our La-Z-Boy Furniture Galleries^®, partially offset by the impact of a significant customer transition in our international wholesale business
• Operating Margin:
  • GAAP operating margin increased to 6.5% versus 6.4%
    • Non-GAAP⁽¹⁾ operating margin was 6.5%, increasing 10 basis points from the year ago period driven by gross margin expansion (lower input costs and favorable foreign exchange), partially offset by significant deleverage in our international wholesale business

Corporate & Other:

• Joybird written sales increased 10% and delivered sales increased 9% to $37 million driven by improved retail traffic and strong execution
• Joybird operating margin performance saw year-over-year improvement from higher gross margins driven by favorable product mix and SG&A leverage on higher sales leading to breakeven operating profit

Balance Sheet and Cash Flow, Fiscal 2025 Third Quarter:

• Ended the quarter with $315 million in cash⁽³⁾ and no external debt
• Generated $57 million in cash from operations versus $48 million in the third quarter of last fiscal year. Year to date, cash flow from operations was $125 million, up 19% from last year’s comparable period
• Invested $19 million in capital expenditures, primarily related to La-Z-Boy Furniture Galleries^® (new stores and remodels)
• Returned approximately $20 million to shareholders, including $11 million in share repurchases and $9 million in dividends. Year to date, $90 million has been returned to shareholders, approximately 40% more than the respective period last year

For full results click here.

About La-Z-Boy

La-Z-Boy Incorporated is a global leader in the manufacture and retail of residential furniture, marketing furniture for every room of the home. The Wholesale segment includes La-Z-Boy, England, American Drew^®, Hammary^®, Kincaid^® and the company’s international wholesale and manufacturing businesses. The company-owned Retail segment includes 184 of the 353 La-Z-Boy Furniture Galleries^® stores. The Corporate and Other segment includes Joybird, an e-commerce retailer and manufacturer of upholstered furniture that also has 12 stores in the U.S. The corporation’s branded distribution network is dedicated to selling La-Z-Boy Incorporated products and brands, and includes 353 stand-alone La-Z-Boy Furniture Galleries^® stores and over 500 independent Comfort Studio^® locations, in addition to in-store gallery programs for the company’s Kincaid and England operating units. Additional information is available at https://www.la-z-boy.com/.

Contact:

Mark Becks, CFA – Investor Relations Contact – mark.becks@la-z-boy.com

Source: La-Z-Boy Incorporated