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From Home Furnishing Business

La-Z-Boy Reports Fiscal 2024 Third Quarter Results

February 20, 2024  by HFBusiness Staff in Business Strategy, Industry   

La-Z-Boy Incorporated, a global leader in the manufacture and retail of residential furniture, today reported third quarter results for the period ended January 27, 2024. For the quarter, sales totaled $500 million, a decrease of 13% against a year ago period that benefited from delivery of pandemic related backlog and 5% above the pre-pandemic third quarter of fiscal 2020. Results were impacted by winter weather events in January, which caused temporary shutdowns of our U.S. manufacturing facilities, delivery delays, and reduced store traffic throughout much of the central U.S. Operating margin was 6.5% in the quarter on a GAAP basis and 6.6% on a Non-GAAP basis. Diluted earnings per share totaled $0.66 on a GAAP basis and $0.67 on a Non-GAAP basis.

Written same-store sales for the entire La-Z-Boy Furniture Galleries® network decreased 6% versus the year ago period, with company-owned written same-store sales down 8% in a challenged consumer environment and due in part to winter weather events. Written same-store sales were positive across the entire network and for company-owned stores in November and December, but were significantly challenged in January, impacted by softening traffic, a strong base period, and weather.

Melinda D. Whittington, president and CEO of La-Z-Boy Incorporated, said, “We remain optimistic about the mid-to-long-term growth potential for our industry, given structural housing shortages and the expectation of improvements in interest rates and housing affordability, and our ability to disproportionately grow with the consumer.”

“In the near term, despite the furniture and home furnishings industry being in a sustained slowdown, our La-Z-Boy Furniture Galleries® network is executing well. Results in January, the third month of our quarter, were negatively impacted by winter weather events, which caused reduced store traffic throughout much of the central U.S. and delivery and production delays at our U.S.-based assembly facilities, the source of the majority of our customized upholstery finished product.”

“After January’s weather disruptions, production and deliveries are now back to normal as we focus on servicing our customers and consumers with the high quality, comfortable products they expect from us.”

Whittington added, “We continue to make progress on our Century Vision strategy, as we completed the acquisition of a six-store network in the Midwest, bringing the company-owned store network to 184 of the 353 total store network.”

“Furthermore, we recently signed an agreement to acquire an additional two stores from an independent La-Z-Boy Furniture Galleries® dealer in the South. Our company-owned store base now represents 52% of our total network, compared to 32% a decade ago.”

“While the market remains challenging and volatile, we are confident in our ability to leverage our strong financial position to outperform the market over the longer term. This includes expanding our La-Z-Boy brand reach with data-based consumer insights driving our marketing and product design, investing in our growing company-owned Retail store base, and increasing the agility of our supply chain. With our customized product primarily manufactured in the U.S., our vertically integrated model serves as a key differentiator in the industry.”

Fourth Quarter Outlook:
Bob Lucian, Chief Financial Officer of La-Z-Boy Incorporated, said, “Our third quarter results were largely on track with our sales guidance and Non-GAAP operating margin expectations excluding unexpected weather events in January. While production and deliveries have returned to normal at the start of our fourth quarter, we are planning prudently for the near term, while investing and building for the long term. For the fourth quarter of fiscal 2024, we expect delivered sales to be in the range of $505-535 million and Non-GAAP operating margin(1) to be in the range of 7-8%.”