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La-Z-Boy reports solid fourth quarter and full year results; sales totaled $554 million, operating cash flow of $158 million for the full year

June 17, 2024 (press release) –

La-Z-Boy Incorporated Reports Solid Fourth Quarter and Full Year Results; Operating Cash Flow of $158 million for the Full Year

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

MONROE, Mich., June 17, 2024 (GLOBE NEWSWIRE) -- La-Z-Boy Incorporated (NYSE: LZB), a global leader in the manufacture and retail of residential furniture, today reported fourth quarter and full year results for the period ended April 27, 2024. For the quarter, sales totaled $554 million, a decrease of 1% against a year ago period that benefited from pandemic backlog deliveries and 22% above the pre-pandemic fourth quarter of Fiscal 2019. Operating margin was 9.1% in the quarter on a GAAP basis and 9.4% on a Non-GAAP(1) basis. Diluted earnings per share totaled $0.91 on a GAAP basis and $0.95 on a Non-GAAP(1) basis.

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."

Key Results:

(Unaudited, amounts in thousands, except per share data and percentages)

  Quarter Ended       Year Ended      
  4/27/2024   4/29/2023   Change   4/27/2024   4/29/2023   Change
Sales   $ 553,535     $ 561,287     (1 )%   $ 2,047,027     $ 2,349,433     (13 )%
                           
GAAP operating income     50,097       54,073     (7 )%     150,796       211,439     (29 )%
Non-GAAP operating income     52,114       55,056     (5 )%     159,398       223,203     (29 )%
                           
GAAP operating margin     9.1%       9.6%     (50) bps     7.4%       9.0%     (160) bps
Non-GAAP operating margin     9.4%       9.8%     (40) bps     7.8%       9.5%     (170) bps
                           
GAAP net income attributable to La-Z-Boy Incorporated     39,308       34,373     14 %     122,626       150,664     (19 )%
Non-GAAP net income attributable to La-Z-Boy Incorporated     40,811       43,091     (5 )%     129,131       167,080     (23 )%
                           
Diluted weighted average common shares     42,974       43,427           43,280       43,240        
                           
GAAP diluted earnings per share   $ 0.91     $ 0.79     15 %   $ 2.83     $ 3.48     (19 )%
Non-GAAP diluted earnings per share   $ 0.95     $ 0.99     (4 )%   $ 2.98     $ 3.86     (23 )%


Liquidity Measures:

    Year Ended       Year Ended
(Unaudited, amounts in thousands)   4/27/2024   4/29/2023   (Unaudited, amounts in thousands)   4/27/2024   4/29/2023
Free Cash Flow           Cash Returns to Shareholders        
Operating cash flow   $ 158,127     $ 205,167     Share repurchases   $ 52,773     $ 5,004  
Capital expenditures     (53,551 )     (68,812 )   Dividends     32,665       29,869  
Free cash flow   $ 104,576     $ 136,355     Cash returns to shareholders   $ 85,438     $ 34,873  


(Unaudited, amounts in thousands)   4/27/2024   4/29/2023
Cash and cash equivalents   $ 341,098     $ 343,374  
Restricted cash           3,304  
Total cash, cash equivalents and restricted cash   $ 341,098     $ 346,678  


Fiscal 2024 Fourth Quarter Results versus Fiscal 2023 Fourth Quarter
:

  • Consolidated sales in the fourth quarter of Fiscal 2024 decreased 1% to $554 million versus last year. Sales in the fourth quarter of Fiscal 2023 included the delivery of a significant backlog resulting from heightened demand in prior periods. Sales increased 22% versus the most recent pre-pandemic fourth quarter in Fiscal 2019
  • Consolidated GAAP operating margin was 9.1% versus 9.6%
    • Consolidated Non-GAAP(1) operating margin decreased 40 basis points to 9.4% versus 9.8%, driven by lower gross margin from segment mix partially offset by lower SG&A spend
  • GAAP diluted EPS increased to $0.91 from $0.79 and Non-GAAP(1) diluted EPS decreased to $0.95 from $0.99

Retail Segment:

  • Sales:
    • Written sales for the Retail segment (company-owned La-Z-Boy Furniture Galleries® stores) increased 1% with growth from acquired and new stores, more than offsetting lower same-store sales compared to the year ago period
      • Written same-store sales decreased 5%, driven by lower traffic and the challenging economic environment, partially offset by stronger conversion rates and higher design sales
    • Delivered sales decreased 6% to $228 million versus last year's results that included delivery of pandemic-related backlog but increased 50% versus the most recent pre-pandemic fourth quarter in fiscal year 2019
  • Operating Margin:
    • GAAP operating margin and GAAP operating income was 14.1% and $32 million, versus 15.5% and $38 million, respectively
      • Non-GAAP(1) operating margin and Non-GAAP(1) operating income were 14.2% and $32 million, down 130 basis points and 14%, respectively, driven by improved gross margin from favorable shift in product mix, more than offset by fixed cost deleverage on lower delivered sales

Wholesale Segment:

  • Sales:
    • Sales decreased 1% to $392 million, relatively flat versus the year ago period
  • Operating Margin:
    • GAAP operating margin decreased to 8.1% versus 8.5%
      • Non-GAAP(1) operating margin decreased to 8.5%, down 20 basis points; gross margin declines were partially offset by lower SG&A expenses

Corporate & Other:

  • Joybird written sales decreased 1% and delivered sales were roughly flat at $37 million as sales trends have largely stabilized. Joybird again made meaningful progress on improving profitability in the quarter with lower freight and warranty expenses, improved product mix, and a higher return on advertising spending

Balance Sheet and Cash Flow, Fiscal 2024:

  • Ended the fiscal year with $341 million in cash(3) and no external debt
  • Generated $158 million in cash from operating activities, including $53 million in the fourth quarter, versus $205 million in Fiscal 2023 and $78 million in last year's fourth quarter, which benefited from pandemic backlog deliveries
  • Invested $54 million in capital expenditures, primarily related to La-Z-Boy Furniture Galleries® (new stores and remodels), and projects at our manufacturing and distribution facilities
  • Returned approximately $85 million to shareholders, including $53 million in share repurchases and $33 million in dividends

Conference Call:
La-Z-Boy will hold a conference call with the investment community on Tuesday, June 18, 2024, at 8:30 a.m. ET. The toll-free dial-in number is (888) 506-0062; international callers may use (973) 528-0011. Enter Participant Access Code 175127.

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: 50747. The webcast replay will be available for one year.

Investor Relations Contact:
Mark Becks, CFA, (734) 457-9538
mark.becks@la-z-boy.com

About La-Z-Boy:
La-Z-Boy Incorporated brings the transformational power of comfort to people, homes, and communities around the world - a mission that began when its founders invented the iconic recliner in 1927. Today, the company operates as a vertically integrated furniture retailer and manufacturer, committed to uncompromising quality and compassion for its consumers.

The Retail segment consists of 187 company-owned La-Z-Boy Furniture Galleries® stores, and is part of a broader network of over 350 La-Z-Boy Furniture Galleries® that, with La-Z-Boy.com, serve customers nationwide. Joybird®, an e-commerce retailer and manufacturer of modern upholstered furniture, has 12 stores in the U.S. In the Wholesale segment, La-Z-Boy manufactures comfortable, custom furniture for its Furniture Galleries® and a variety of retail channels, England Furniture Co. offers custom upholstered furniture, and casegoods brands Kincaid®, American Drew®, and Hammary® provide pieces that make every room feel like home. To learn more, please visit: https://www.la-z-boy.com/.

Notes:
(1)Non-GAAP amounts for the fourth quarter of fiscal 2024 exclude:

  • a $1.7 million pre-tax, or $0.03 per diluted share, charge related to our supply chain optimization actions
  • purchase accounting charges related to acquisitions completed in prior periods totaling $0.3 million pre-tax, or $0.01 per diluted share, all included in operating income

Non-GAAP amounts for the fourth quarter of fiscal 2023 exclude:

  • a $0.7 million pre-tax, or $0.01 per diluted share, charge related to the closure of the Torreón, MX facility, primarily reflecting asset relocation costs
  • purchase accounting charges related to acquisitions completed in prior periods totaling $0.3 million pre-tax, or $0.01 per diluted share, with $0.3 million included in operating income and a de minimis amount included in interest expense
  • a pre-tax charge of $10.6 million, or $0.18 per diluted share related to an impairment of one investment

Non-GAAP amounts for the full fiscal 2024 year exclude:

  • a $7.5 million pre-tax, or $0.13 per diluted share, charge related to our supply chain optimization actions
  • purchase accounting charges related to acquisitions completed in prior periods totaling $1.2 million pre-tax, or $0.02 per diluted share, with $1.1 million included in operating income and $0.1 million included in interest expense

Non-GAAP amounts for the full fiscal 2023 year exclude:

  • a $10.8 million pre-tax, or $0.19 per diluted share, charge related to the closure of the Torreón, MX facility, primarily reflecting the impairment of various assets
  • purchase accounting charges related to acquisitions completed in prior periods totaling $0.6 million pre-tax, or less than $0.01 per diluted share, with $0.3 million included in operating income and $0.3 million included in interest expense
  • a pre-tax charge of $10.6 million, or $0.18 per diluted share, related to an impairment of one investment
  • a $0.6 million pre-tax, or $0.01 per diluted share, charge related to the company's business realignment, announced in June 2020

(2)This reference to Non-GAAP operating margin for a future period is a Non-GAAP financial measure. We have not provided a reconciliation of Non-GAAP operating margin for future periods in this press release because such reconciliation cannot be provided without unreasonable efforts.

Please refer to the accompanying “Reconciliation of GAAP to Non-GAAP Financial Measures” and “Reconciliation of GAAP to Non-GAAP Financial Measures: Segment Information” for detailed information on calculating the Non-GAAP financial measures used in this press release and a reconciliation to the most directly comparable GAAP measure.

(3)Cash includes cash, cash equivalents and restricted cash.

Cautionary Note Regarding Forward-Looking Statements:
This news release contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. Generally, forward-looking statements include information concerning expectations, projections or trends relating to our results of operations, financial results, financial condition, strategic initiatives and plans, expenses, dividends, share repurchases, liquidity, use of cash and cash requirements, borrowing capacity, investments, future economic performance, and our business and industry.

The forward-looking statements in this press release are based on certain assumptions and currently available information and are subject to various risks and uncertainties, many of which are unforeseeable and beyond our control. Additional risks and uncertainties that we do not presently know about or that we currently consider to be immaterial may also affect our business operations and financial results. Our actual future results and trends may differ materially depending on a variety of factors, including, but not limited to, the risks and uncertainties discussed in our Fiscal 2023 Annual Report on Form 10-K and other factors identified in our reports filed with the Securities and Exchange Commission (the “SEC”), available on the SEC’s website at www.sec.gov. Given these risks and uncertainties, you should not rely on forward-looking statements as a prediction of actual results. We are including this cautionary note to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or for any other reason.

Non-GAAP Financial Measures:
In addition to the financial measures prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), this press release also includes Non-GAAP financial measures. Management uses these Non-GAAP financial measures when assessing our ongoing performance. This press release contains references to Non-GAAP operating income (on a consolidated basis and by segment), Non-GAAP operating margin (on a consolidated basis and by segment), and Non-GAAP net income attributable to La-Z-Boy Incorporated per diluted share, Non-GAAP diluted earnings per share (and components thereof, including Non-GAAP income before income taxes and Non-GAAP net income attributable to La-Z-Boy Incorporated), each of which may exclude, as applicable, business realignment charges, supply chain optimization charges, investment impairment charges, and purchase accounting charges. The business realignment charges include severance costs, asset impairment costs, and costs to relocate equipment and inventory related to organizational changes we undertook as a result of our response to COVID-19, including a reduction in the company’s work force, temporary closure of certain manufacturing facilities and subsequent gains resulting from the sale of related assets. The supply chain optimization charges include asset impairment costs, accelerated depreciation expense, lease termination gains, severance costs, and employee relocation costs resulting from the closure, consolidation, and centralization of various global supply chain operations and includes the closure of our Torreón manufacturing facility (previously disclosed as Mexico optimization). The purchase accounting charges include the amortization of intangible assets, fair value adjustments of future cash payments recorded as interest expense, and adjustments to the fair value of a contingent consideration liability. These Non-GAAP financial measures are not meant to be considered superior to or a substitute for La-Z-Boy Incorporated’s results of operations prepared in accordance with GAAP and may not be comparable to similarly titled measures reported by other companies. Reconciliations of such Non-GAAP financial measures to the most directly comparable GAAP financial measures are set forth in the accompanying tables.

Management believes that presenting certain Non-GAAP financial measures will help investors understand the long-term profitability trends of our business and compare our profitability to prior and future periods and to our peers. Management excludes purchase accounting charges because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions consummated and the success with which we operate the businesses acquired. While the company has a history of acquisition activity, it does not acquire businesses on a predictable cycle, and the impact of purchase accounting charges is unique to each acquisition and can vary significantly from acquisition to acquisition. Similarly, business realignment charges and supply chain optimization charges are dependent on the timing, size, number and nature of the operations being closed, consolidated or centralized, and the charges may not be incurred on a predictable cycle. Management also excludes the impacts from the impairment charge for one investment when assessing the company's operating and financial performance due to the one-time and infrequent nature of the transaction. Management believes that exclusion of these items facilitates more consistent comparisons of the company’s operating results over time. Where applicable, the accompanying “Reconciliation of GAAP to Non-GAAP Financial Measures” tables present the excluded items net of tax calculated using the effective tax rate from operations for the period in which the adjustment is presented.


 
LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF INCOME
 
 (Unaudited, amounts in thousands, except per share data)   Quarter Ended   Year Ended
  4/27/2024   4/29/2023   4/27/2024   4/29/2023
Sales   $ 553,535     $ 561,287     $ 2,047,027     $ 2,349,433  
Cost of sales     313,452       312,649       1,165,357       1,384,700  
Gross profit     240,083       248,638       881,670       964,733  
Selling, general and administrative expense     189,986       194,565       730,874       753,294  
Operating income     50,097       54,073       150,796       211,439  
Interest expense     (126 )     (122 )     (455 )     (536 )
Interest income     4,260       3,046       15,482       6,670  
Other income (expense), net     (92 )     (10,950 )     (71 )     (11,784 )
Income before income taxes     54,139       46,047       165,752       205,789  
Income tax expense     13,807       11,402       41,116       53,848  
Net income     40,332       34,645       124,636       151,941  
Net (income) loss attributable to noncontrolling interests     (1,024 )     (272 )     (2,010 )     (1,277 )
Net income attributable to La-Z-Boy Incorporated   $ 39,308     $ 34,373     $ 122,626     $ 150,664  
                 
Basic weighted average common shares     42,499       43,261       42,878       43,148  
Basic net income attributable to La-Z-Boy Incorporated per share   $ 0.92     $ 0.79     $ 2.86     $ 3.49  
                 
Diluted weighted average common shares     42,974       43,427       43,280       43,240  
Diluted net income attributable to La-Z-Boy Incorporated per share   $ 0.91     $ 0.79     $ 2.83     $ 3.48  


 
LA-Z-BOY INCORPORATED
CONSOLIDATED BALANCE SHEET
 
(Unaudited, amounts in thousands, except par value)   4/27/2024   4/29/2023
Current assets        
Cash and equivalents   $ 341,098     $ 343,374  
Restricted cash           3,304  
Receivables, net of allowance of $5,076 at 4/27/2024 and $4,776 at 4/29/2023     139,213       125,536  
Inventories, net     263,237       276,257  
Other current assets     93,260       106,129  
Total current assets     836,808       854,600  
Property, plant and equipment, net     298,224       278,578  
Goodwill     214,453       205,008  
Other intangible assets, net     47,251       39,375  
Deferred income taxes – long-term     10,283       8,918  
Right of use lease assets     446,466       416,269  
Other long-term assets, net     59,957       63,515  
Total assets   $ 1,913,442     $ 1,866,263  
         
Current liabilities        
Accounts payable   $ 96,486     $ 107,460  
Lease liabilities, short-term     77,027       77,751  
Accrued expenses and other current liabilities     263,768       290,650  
Total current liabilities     437,281       475,861  
Lease liabilities, long-term     404,724       368,163  
Other long-term liabilities     58,077       70,142  
Shareholders' equity        
Preferred shares – 5,000 authorized; none issued            
Common shares, $1.00 par value – 150,000 authorized; 42,440 outstanding at 4/27/2024 and 43,318 outstanding at 4/29/2023     42,440       43,318  
Capital in excess of par value     368,485       358,891  
Retained earnings     598,009       545,155  
Accumulated other comprehensive loss     (5,870 )     (5,528 )
Total La-Z-Boy Incorporated shareholders' equity     1,003,064       941,836  
Noncontrolling interests     10,296       10,261  
Total equity     1,013,360       952,097  
Total liabilities and equity   $ 1,913,442     $ 1,866,263  


 
LA-Z-BOY INCORPORATED
 
    Year Ended
(Unaudited, amounts in thousands)   4/27/2024   4/29/2023
Cash flows from operating activities        
Net income   $ 124,636     $ 151,941  
Adjustments to reconcile net income to cash provided by operating activities        
(Gain)/loss on disposal and impairment of assets     1,101       6,365  
(Gain)/loss on sale of investments     (1,199 )     148  
Provision for doubtful accounts     511       1,546  
Depreciation and amortization     48,552       40,193  
Amortization of right-of-use lease assets     76,133       76,511  
Lease impairment/(settlement)     (1,175 )     1,347  
Equity-based compensation expense     14,426       12,458  
Change in deferred taxes     (3,268 )     3,895  
Change in receivables     (16,811 )     53,675  
Change in inventories     19,877       32,311  
Change in other assets     10,303       24,377  
Change in payables     (8,606 )     4,586  
Change in lease liabilities     (76,766 )     (77,811 )
Change in other liabilities     (29,587 )     (126,375 )
Net cash provided by operating activities     158,127       205,167  
         
Cash flows from investing activities        
Proceeds from disposals of assets     4,972       136  
Capital expenditures     (53,551 )     (68,812 )
Purchases of investments     (18,351 )     (9,092 )
Proceeds from sales of investments     24,816       24,483  
Acquisitions     (39,440 )     (16,835 )
Net cash used for investing activities     (81,554 )     (70,120 )
         
Cash flows from financing activities        
Payments on debt and finance lease liabilities     (489 )     (123 )
Holdback payments for acquisitions     (5,000 )     (5,000 )
Stock issued for stock and employee benefit plans, net of shares withheld for taxes     10,872       2,857  
Repurchases of common stock     (52,773 )     (5,004 )
Dividends paid to shareholders     (32,665 )     (29,869 )
Dividends paid to minority interest joint venture partners (1)     (1,172 )      
Net cash used for financing activities     (81,227 )     (37,139 )
         
Effect of exchange rate changes on cash and equivalents     (926 )     (86 )
Change in cash, cash equivalents and restricted cash     (5,580 )     97,822  
Cash, cash equivalents and restricted cash at beginning of period     346,678       248,856  
Cash, cash equivalents and restricted cash at end of period   $ 341,098     $ 346,678  
         
Supplemental disclosure of non-cash investing activities        
Capital expenditures included in payables   $ 5,952     $ 8,208  


(1) Includes dividends paid to joint venture minority partners resulting from the repatriation of dividends from our foreign earnings that we no longer consider permanently reinvested.


 
LA-Z-BOY INCORPORATED
 
    Quarter Ended   Year Ended
(Unaudited, amounts in thousands)   4/27/2024   4/29/2023   4/27/2024   4/29/2023
Sales                
Wholesale segment:                
Sales to external customers   $ 287,900     $ 280,918     $ 1,048,431     $ 1,215,429  
Intersegment sales     104,561       113,678       398,847       474,819  
Wholesale segment sales     392,461       394,596       1,447,278       1,690,248  
                 
Retail segment sales     227,878       242,713       855,126       982,043  
                 
Corporate and Other:                
Sales to external customers     37,757       37,656       143,470       151,961  
Intersegment sales     1,587       2,657       10,299       14,229  
Corporate and Other sales     39,344       40,313       153,769       166,190  
                 
Eliminations     (106,148 )     (116,335 )     (409,146 )     (489,048 )
Consolidated sales   $ 553,535     $ 561,287     $ 2,047,027     $ 2,349,433  
                 
Operating Income (Loss)                
Wholesale segment   $ 31,709     $ 33,657     $ 99,373     $ 115,215  
Retail segment     32,170       37,716       111,682       161,571  
Corporate and Other     (13,782 )     (17,300 )     (60,259 )     (65,347 )
Consolidated operating income   $ 50,097     $ 54,073     $ 150,796     $ 211,439  


 
LA-Z-BOY INCORPORATED
UNAUDITED QUARTERLY FINANCIAL DATA
 
Fiscal 2024
 
Fiscal Quarter Ended   (13 weeks)   (13 weeks)   (13 weeks)   (13 weeks)
(Amounts in thousands, except per share data)   7/29/2023   10/28/2023   1/27/2024   4/27/2024
Sales   $ 481,651     $ 511,435     $ 500,406     $ 553,535  
Cost of sales     275,923       288,830       287,152       313,452  
Gross profit     205,728       222,605       213,254       240,083  
Selling, general and administrative expense     171,202       188,993       180,693       189,986  
Operating income     34,526       33,612       32,561       50,097  
Interest expense     (122 )     (101 )     (106 )     (126 )
Interest income     3,056       4,042       4,124       4,260  
Other income (expense), net     556       104       (639 )     (92 )
Income before income taxes     38,016       37,657       35,940       54,139  
Income tax expense     10,090       9,963       7,256       13,807  
Net income     27,926       27,694       28,684       40,332  
Net (income) loss attributable to noncontrolling interests     (447 )     (495 )     (44 )     (1,024 )
Net income attributable to La-Z-Boy Incorporated   $ 27,479     $ 27,199     $ 28,640     $ 39,308  
Diluted weighted average common shares     43,333       43,401       43,195       42,974  
Diluted net income attributable to La-Z-Boy Incorporated per share   $ 0.63     $ 0.63     $ 0.66     $ 0.91  


 
Fiscal 2023
 
Fiscal Quarter Ended   (13 weeks)   (13 weeks)   (13 weeks)   (14 weeks)
(Amounts in thousands, except per share data)   7/30/2022   10/29/2022   1/28/2023   4/29/2023
Sales   $ 604,091     $ 611,332     $ 572,723     $ 561,287  
Cost of sales     373,061       361,848       337,142       312,649  
Gross profit     231,030       249,484       235,581       248,638  
Selling, general and administrative expense     178,387       187,601       192,741       194,565  
Operating income     52,643       61,883       42,840       54,073  
Interest expense     (159 )     (119 )     (136 )     (122 )
Interest income     474       1,138       2,012       3,046  
Other income (expense), net     45       183       (1,062 )     (10,950 )
Income before income taxes     53,003       63,085       43,654       46,047  
Income tax expense     14,063       16,306       12,077       11,402  
Net income     38,940       46,779       31,577       34,645  
Net income attributable to noncontrolling interests     (452 )     (702 )     149       (272 )
Net income attributable to La-Z-Boy Incorporated   $ 38,488     $ 46,077     $ 31,726     $ 34,373  
Diluted weighted average common shares     43,142       43,182       43,137       43,427  
Diluted net income attributable to La-Z-Boy Incorporated per share   $ 0.89     $ 1.07     $ 0.74     $ 0.79  


 
LA-Z-BOY INCORPORATED
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
 
    Quarter Ended   Year Ended
(Amounts in thousands, except per share data)   4/27/2024   4/29/2023   4/27/2024   4/29/2023
GAAP gross profit   $ 240,083     $ 248,638     $ 881,670     $ 964,733  
Purchase accounting charges (1)     89             89       132  
Business realignment charges (2)                       609  
Supply chain optimization charges (3)     502       741       4,468       1,621  
Non-GAAP gross profit   $ 240,674     $ 249,379     $ 886,227     $ 967,095  
                 
GAAP SG&A   $ 189,986     $ 194,565     $ 730,874     $ 753,294  
Purchase accounting (charges)/gain (4)     (254 )     (252 )     (1,016 )     (206 )
Supply chain optimization charges (5)     (1,172 )     10       (3,029 )     (9,196 )
Non-GAAP SG&A   $ 188,560     $ 194,323     $ 726,829     $ 743,892  
                 
GAAP operating income   $ 50,097     $ 54,073     $ 150,796     $ 211,439  
Purchase accounting charges     343       252       1,105       338  
Business realignment charges                       609  
Supply chain optimization charges     1,674       731       7,497       10,817  
Non-GAAP operating income   $ 52,114     $ 55,056     $ 159,398     $ 223,203  
                 
GAAP income before income taxes   $ 54,139     $ 46,047     $ 165,752     $ 205,789  
Purchase accounting charges recorded as part of gross profit, SG&A, and interest expense     343       300       1,153       571  
Business realignment charges                       609  
Supply chain optimization charges     1,674       731       7,497       10,817  
Investment impairment           10,562             10,562  
Non-GAAP income before income taxes   $ 56,156     $ 57,640     $ 174,402     $ 228,348  
                 
GAAP net income attributable to La-Z-Boy Incorporated   $ 39,308     $ 34,373     $ 122,626     $ 150,664  
Purchase accounting charges recorded as part of gross profit, SG&A, and interest expense     343       300       1,153       571  
Tax effect of purchase accounting     (87 )     (74 )     (286 )     (361 )
Business realignment charges                       609  
Tax effect of business realignment                       (160 )
Supply chain optimization charges     1,674       731       7,497       10,817  
Tax effect of supply chain optimization     (427 )     (181 )     (1,859 )     (2,845 )
Investment impairment           10,562             10,562  
Tax effect of investment impairment           (2,619 )           (2,778 )
Non-GAAP net income attributable to La-Z-Boy Incorporated   $ 40,811     $ 43,091     $ 129,131     $ 167,080  
                 
GAAP net income attributable to La-Z-Boy Incorporated per diluted share ("Diluted EPS")   $ 0.91     $ 0.79     $ 2.83     $ 3.48  
Purchase accounting charges, net of tax, per share     0.01       0.01       0.02        
Business realignment charges, net of tax, per share                       0.01  
Supply chain optimization charges, net of tax, per share     0.03       0.01       0.13       0.19  
Investment impairment, net of tax, per share           0.18             0.18  
Non-GAAP net income attributable to La-Z-Boy Incorporated per diluted share ("Diluted EPS")   $ 0.95     $ 0.99     $ 2.98     $ 3.86  


(1) Includes incremental expense upon the sale of inventory acquired at fair value.
(2) Includes severance charges related to the closure of our Newton, Mississippi manufacturing facility.
(3) Fiscal 2024 primarily includes severance charges related to shifting upholstery production from our Ramos, Mexico operations to other upholstery plants and relocating our cut and sew operations back to Ramos, Mexico, resulting in the permanent closure of our leased cut and sew facility in Parras, Mexico. Fiscal 2023 primarily includes severance charges related to the closure our manufacturing facility in Torreón, Mexico.
(4) Includes amortization of intangible assets. Fiscal 2023 also includes an $0.8 million adjustment to the fair value of a contingent consideration liability.
(5) Fiscal 2024 includes $4.2 million of accelerated depreciation and impairment of fixed assets related to shifting upholstery production from our Ramos, Mexico operations to other upholstery plants and relocating our cut and sew operations back to Ramos, Mexico, resulting in the permanent closure of our leased cut and sew facility in Parras, Mexico. Fiscal 2024 also includes a $1.2 million gain related to the settlement of the Torreón, Mexico lease obligation on previously impaired assets. Fiscal 2023 includes impairment charges of various assets, primarily long-lived assets, related to the closure of our manufacturing facility in Torreón, Mexico.
 
LA-Z-BOY INCORPORATED
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
SEGMENT INFORMATION
 
    Quarter Ended   Year Ended
(Amounts in thousands)   4/27/2024   % of sales   4/29/2023   % of sales   4/27/2024   % of sales   4/29/2023   % of sales
GAAP operating income (loss)                                
Wholesale segment   $ 31,709     8.1%   $ 33,657     8.5%   $ 99,373     6.9%   $ 115,215     6.8%
Retail segment     32,170     14.1%     37,716     15.5%     111,682     13.1%     161,571     16.5%
Corporate and Other     (13,782 )   N/M     (17,300 )   N/M     (60,259 )   N/M     (65,347 )   N/M
Consolidated GAAP operating income   $ 50,097     9.1%   $ 54,073     9.6%   $ 150,796     7.4%   $ 211,439     9.0%
                                 
Non-GAAP items affecting operating income                                
Wholesale segment   $ 1,729         $ 784         $ 7,715         $ 11,634      
Retail segment     89                     89           132      
Corporate and Other     199           199           798           (2 )    
Consolidated Non-GAAP items affecting operating income   $ 2,017         $ 983         $ 8,602         $ 11,764      
                                 
Non-GAAP operating income (loss)                                
Wholesale segment   $ 33,438     8.5%   $ 34,441     8.7%   $ 107,088     7.4%   $ 126,849     7.5%
Retail segment     32,259     14.2%     37,716     15.5%     111,771     13.1%     161,703     16.5%
Corporate and Other     (13,583 )   N/M     (17,101 )   N/M     (59,461 )   N/M     (65,349 )   N/M
Consolidated Non-GAAP operating income   $ 52,114     9.4%   $ 55,056     9.8%   $ 159,398     7.8%   $ 223,203     9.5%
                                 
N/M - Not Meaningful                                




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