La-Z-Boy, Incorporated Reports Third Quarter Financial Results

February 19, 2025  by Karen Parrish in Business Strategy, Industry   

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.”

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

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%.”

Across the home furnishings industry, leading companies are coming together once again to support Spirit of Life®, the first of two flagship annual fundraisers benefiting City of Hope.

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

Dividend:
On February 18, 2025, the Board of Directors declared a quarterly cash dividend of $0.22 per share on the common stock of the company. The dividend will be paid on March 14, 2025, to shareholders of record on March 4, 2025.

Conference Call:
The conference call archive 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: 51987. The webcast replay will be available for one year.