La-Z-Boy Reports Fourth Quarter and Full Year Results

June 17, 2024  by HFBusiness Staff in Business Strategy, Industry   

Fiscal 2024 Fourth Quarter Highlights:

• Consolidated delivered sales of $554 million
  • Up 22% versus most recent pre-pandemic fourth quarter (Fiscal 2019 Fourth Quarter)
  • Down 1% versus prior year
• GAAP diluted EPS of $0.91
  • Non-GAAP⁽¹⁾ diluted EPS of $0.95
• Generated $53 million in operating cash flow for the quarter
• Grew company-owned La-Z-Boy Furniture Galleries^® network by three stores (including two acquired independent La-Z-Boy Furniture Galleries^® stores)

Fiscal 2024 Highlights:

• Consolidated delivered sales of $2.05 billion
• Gross margin expansion on GAAP and Non-GAAP⁽¹⁾ basis, across all segments
• GAAP diluted EPS of $2.83
  • Non-GAAP⁽¹⁾ diluted EPS of $2.98
• Generated $158 million in operating cash flow for the year
• Strong balance sheet with $341 million in cash and no external debt
• Opened six company-owned and acquired 11 independent La-Z-Boy Furniture Galleries^® stores
  • Retail (company-owned) stores now represent over half of the total La-Z-Boy Furniture Galleries^® network for first time in company history
• Returned $85 million to shareholders through share repurchases and dividends
  • Increased prior quarterly dividend by 10% to $0.20 in third quarter

Written sales again outperformed the industry, with fourth quarter total written sales for the Retail (company-owned La-Z-Boy Furniture Galleries^®) segment up 1% versus a year ago and written same-store sales down 5% versus a year ago. Written same-store sales for the entire La-Z-Boy Furniture Galleries^® network decreased 3% versus the year ago period. Trends were strongest in the first half of the quarter around key holiday events and recovery from January weather events. Written sales results continue to outperform the broader industry, which was down 8% for the quarter, as furniture and home furnishings spending remains depressed with overall traffic trends challenged and housing activity down due to continued higher interest rates.

Melinda D. Whittington, president and chief executive officer of La-Z-Boy Incorporated, said, “We are pleased with our strong finish to the fiscal year as fourth quarter results exceeded expectations. Wholesale unit volumes improved in the quarter and recovery from weather and related disruptions in January also provided a tailwind. The industry continues to grapple with higher for longer interest rates and housing turnover near 30-year lows negatively impacting store traffic.”

“However, our execution is the strongest it has ever been, including conversion rates at all-time highs and average ticket and design sales trending up for the year. We expect industry fundamentals to remain volatile for the near term but remain confident in our ability to outperform the market and gain share longer term. Our first quarter is off to a good start, and we are encouraged by our solid Memorial Day results as we believe our assortment and best-in-class motion offerings are resonating with consumers in the marketplace.”

Whittington added, “During the year we made great progress on our Century Vision strategy increasing both the total La-Z-Boy Furniture Galleries^® store network and the number of company-owned stores. We opened six new company-owned stores and acquired 11 independent Furniture Galleries^® stores.”

“We also invested in both our stores and manufacturing operations through remodels and improving the agility of our supply chain. As a market leader in comfortable custom furniture with quick delivery, we are positioned to continue to outperform the industry and grow share. Our focus remains on executing our proven playbook of expanding our Retail segment through new and acquired stores, delivering sales growth double the industry, and driving margin expansion.”

“I want to thank all of our dedicated employees for their strong contributions throughout the year. The momentum in our business is palpable, particularly with our strong merchandising offerings and new "Long Live the Lazy" brand campaign building awareness, consideration, and purchase intent. We are excited to build further on this foundation in Fiscal 2025."

First Quarter Outlook:

Bob Lucian, Chief Financial Officer of La-Z-Boy Incorporated, said, “Taken together, our third quarter and fourth quarter results were largely in line with our plans for the second half of Fiscal 2024. Recall, delivered sales in Fiscal 2023 included $300 million of backlog. Thus, our sales were roughly flat compared to last year, absent this backlog. Looking forward, in Fiscal 2025, we expect the industry to continue to be challenged, down by as much as 5%, with any improved industry trends occurring late in our fiscal year, towards calendar 2025, when expected interest rate cuts filter through the economy and begin to positively impact housing activity.

We expect to continue to outperform the industry in Fiscal 2025, which should result in modest sales growth year-over-year. Growth will be supported by executing our Century Vision strategy, including the opening of 12 to 15 new La-Z-Boy Furniture Galleries^® stores, mainly in the second half of the fiscal. For the first quarter of Fiscal 2025, we expect delivered sales to be in the range of $475-495 million and Non-GAAP operating margin⁽²⁾ to be in the range of 6-7%. Also, as a reminder, our first quarter is generally the lowest sales and margin quarter in the fiscal year due to seasonally lower industry sales and our annual week-long plant shutdown in July."