La-Z-Boy Reports First Quarter 2024 Financial Results

August 20, 2024  by Karen Parrish in Business Strategy, Industry   

Fiscal 2025 First Quarter Highlights:

• Consolidated delivered sales of $496 million
  • Up 3% versus prior year
• Wholesale segment sales increased 5% on growth to external customers
• Delivered sales and Non-GAAP⁽¹⁾ operating margin in line with guidance
• GAAP diluted EPS of $0.61
  • Non-GAAP⁽¹⁾ diluted EPS of $0.62
• Generated $52 million in operating cash flow for the quarter

For the quarter, sales totaled $496 million, an increase of 3% against the prior year comparable period. Operating margin was 6.5% for the quarter on a GAAP basis and 6.6% on a Non-GAAP⁽¹⁾ basis. Diluted earnings per share totaled $0.61 on a GAAP basis and $0.62 on a Non-GAAP⁽¹⁾ basis. Operating cash flow was $52 million, twice as high as last year's first quarter.

Written sales remained steady, with first quarter total written sales for the Retail segment (company-owned La-Z-Boy Furniture Galleries^®) up 4% versus a year ago and written same-store sales down 3% versus a year ago. Written same-store sales for the entire La-Z-Boy Furniture Galleries^® network also decreased 3% versus the year ago period.

Trends were strongest around the Memorial Day holiday and softened towards the end of the quarter. Written sales results outperformed the broader furniture and home furnishings industry for May and June, which was also down 3% for the quarter. Across the industry, the consumer continues to be challenged and to pull back spending outside of key holidays.

Melinda D. Whittington, president and CEO of La-Z-Boy, said, “We continue to deliver positive results amidst a challenging macroeconomic backdrop. We were pleased to return to delivered sales growth in the quarter, led by our Wholesale segment, which benefited from higher delivered volume supported by Century Vision's channel expansion strategy. While the Retail business currently continues to wrestle with depressed traffic trends experienced across our industry, we again delivered strong execution.”

“Conversion rates and design average ticket sales both improved again year-over-year and our in-store teams remain laser focused on providing the highest level of customer service and showcasing our industry leading product assortment. Over the past five years, our Retail business has grown at an impressive 7% compound annual sales growth. Our high quality offering of comfortable, custom furniture with quick delivery is resonating in a challenging marketplace. And while we expect industry fundamentals to be volatile for the foreseeable future, we remain confident in our ability to outperform the market and gain share longer term.”

Whittington added, “We remain committed to investing in our business for the long term, as we navigate the near-term headwinds in the furniture industry. As an iconic brand with a storied near 100-year history, we have the proven ability to adapt, with a strong balance sheet to support our strategy. Near-term market disruptions are likely to continue pressuring the fiscal year, but we are well positioned to disproportionately benefit when industry tailwinds re-emerge.”

“With our Century Vision strategy, we are actively investing in growing our core Retail segment through strengthening in-store execution, opening new stores, and acquiring independent La-Z-Boy Furniture Galleries^® stores when we are able, as we believe our vertically integrated model offers superior returns over the longer term. This will uniquely position us to continue to outperform the industry and grow share.”

Dividend:
On August 20, 2024, the Board of Directors declared a quarterly cash dividend of $0.20 per share on the common stock of the company. The dividend will be paid on September 16, 2024, to shareholders of record on September 5, 2024.

Conference Call:
La-Z-Boy will hold a conference call with the investment community on  August 21, at 8:30 a.m. ET.

The call will be webcast live, with corresponding slides, and archived on the internet. It will be available at https://lazboy.gcs-web.com/. A telephone replay will be available for a week following the call. This replay will be accessible to callers from the U.S. and Canada at (877) 481-4010 and to international callers at (919) 882-2331. Enter Replay Passcode: 51039. The webcast replay will be available for one year.