La-Z-Boy Incorporated Reports Strong Fourth Quarter and Full Year Results; Sales Growth Across All Segments for the Year and Strong Operating Cash Flow Performance

La-Z-Boy Incorporated, a global leader in the retail and manufacture of residential furniture, reported strong fourth quarter results for the period ended April 26, 2025. For the quarter, sales totaled $571 million, growing 3% against the prior year comparable period. Operating margin was 5.2% for the quarter on a GAAP basis and 9.4% on an adjusted⁽¹⁾ basis. Diluted earnings per share totaled $0.36 on a GAAP basis and $0.92 on an adjusted⁽¹⁾ basis, both of which include a $0.10 impact from unfavorable foreign tax discrete items. The company returned $113 million to shareholders for the year, up over 30% versus the prior year.

Fiscal 2025 Fourth Quarter Highlights

• Consolidated delivered sales of $571 million
  • Up 3% versus prior year
• Retail segment delivered sales increased 8%
  • Company-owned La-Z-Boy Furniture Galleries^® network grew by a total of six stores; 203 company-owned store base now represents 55% of total network
• Wholesale segment delivered sales increased 2%
• GAAP operating margin of 5.2%; adjusted⁽¹⁾ operating margin of 9.4%, flat versus the year ago period
• GAAP diluted EPS of $0.36 and adjusted⁽¹⁾ diluted EPS of $0.92, both of which include a $0.10 impact from unfavorable foreign tax discrete items
• Delivered sales exceeded high end of guidance range and adjusted⁽¹⁾ operating margin at high end of guidance range
• Generated $62 million in operating cash flow for the quarter, up 17% versus prior year
  

Fiscal 2025 Highlights

• Consolidated delivered sales of $2.1 billion
  • Up 3% versus prior year
• Retail segment delivered sales increased 5%
  • Added 11 newly opened stores, one of the largest yearly expansions in company history, and acquired seven independent La-Z-Boy Furniture Galleries^® stores
• Wholesale segment delivered sales increased 2%
• Joybird delivered sales increased 5%
• GAAP operating margin of 6.4%; adjusted⁽¹⁾ operating margin of 7.6%, down 20 basis points versus a year ago
• GAAP diluted EPS of $2.35 and adjusted⁽¹⁾ diluted EPS of $2.92, both of which include a $0.10 impact from unfavorable foreign tax discrete items
• Generated $187 million in operating cash flow for the year, up 18% versus prior year
• Returned $113 million to shareholders through share repurchases and dividends
  • Increased quarterly dividend by 10% to $0.22 in third quarter, the fourth consecutive annual dividend increase

Fourth quarter total written sales for the Retail segment (company-owned La-Z-Boy Furniture Galleries^®) grew 3% versus a year ago and written same-store sales (which exclude the impact of newly opened stores and newly acquired stores) were down 5% versus a year ago. Continued challenges in the housing market with stubbornly high mortgage rates and increased volatility in the global economy negatively influenced consumer sentiment and had an adverse impact on industry trends. Industry data for the quarter was mixed with public company peers noting same-store sales of relatively flat to declines in the mid-teen range, while the broader industry data as reported by the U.S. Census Bureau indicated an increase in the mid-single digits.

Melinda D. Whittington, Board Chair, President and Chief Executive Officer of La-Z-Boy Incorporated, said, “Our fourth quarter results reflect the ongoing strengthening of our brand and operations under our Century Vision strategy. We executed well throughout the year with sales growth across all of our segments and four consecutive quarters of top line growth, even as the industry contends with depressed housing fundamentals and growing macro uncertainty. We are controlling what we can control with distinct strategies and initiatives across each of our businesses. In Retail, we continue to grow our direct-to-consumer business, own the entire end-to-end consumer experience, and develop more value-added consumer insights. Through opening net new stores and also acquiring existing independent La-Z-Boy Furniture Galleries^®, we reached a new milestone in the quarter, growing our company-owned store footprint to over 200 stores, nearly doubling our store count over the last 10 years, and now owning 55% of the total network. In Wholesale, we continue to expand our brand reach with compatible strategic partners to serve more consumers. Additionally, we are successfully driving scale and efficiencies in our supply chain. This is highlighted by our core North America La-Z-Boy wholesale business achieving sales growth and margin expansion for four consecutive quarters during fiscal 2025, and continuing to strengthen as we initiate our multi-year distribution and delivery redesign.”

Whittington added, “Even as we expect global economic uncertainty to continue challenging consumers in the near term, we are confident in the strength of our business model to outperform our peers and deliver strong financial performance. La-Z-Boy is an iconic brand in a highly fragmented market. We have successfully navigated challenging times throughout our 98-year history by delivering comfort and quality to our consumers. A strong balance sheet combined with an agile supply chain provides us a position of strength in the industry. We will continue to execute our playbook to mitigate an ever changing environment and drive long-term profitable growth and returns for all stakeholders.”

First Quarter Outlook

Taylor Luebke, SVP and Chief Financial Officer of La-Z-Boy Incorporated, said, “We delivered growth and strong financial results in what was another challenging year for the industry. We continue to control what we can control and are executing against our Century Vision strategy, which will enable growth through our centennial and beyond. I am pleased with our progress, and our ability to deliver results at or above the high end of our sales and margin expectations for the fourth quarter, even in light of considerable volatility during the quarter. Given higher levels of uncertainty in the broader economic climate, we expect the industry outlook to continue to be volatile and we are planning prudently to navigate the year ahead. We expect to continue to outperform the industry, driven by growth in our company-owned Retail segment and core North America La-Z-Boy wholesale business. Assuming no significant changes in external factors, we expect fiscal first quarter sales to be in the range of $490-$510 million, reflecting modest growth in a challenged consumer environment. We expect adjusted operating margin⁽²⁾ to be in the range of 5.5-7.0%, including the impact of transitory pressure from our UK and Joybird businesses, as well as investment in our distribution network and home delivery redesign project. 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.”

Fiscal 2025 Fourth Quarter Results versus Fiscal 2024 Fourth Quarter:

• Consolidated sales in the fourth quarter of fiscal 2025 increased 3% to $571 million versus last year, primarily driven by acquisitions and new stores in the Retail segment, and continued momentum in our core North America La-Z-Boy wholesale business
• Consolidated GAAP operating margin was 5.2% versus 9.1%
  • Consolidated adjusted⁽¹⁾ operating margin was flat at 9.4% versus the year ago period, as lower input costs (reduced commodity prices and improved sourcing) and leverage on marketing investments were offset by the impact of a significant customer transition in our international wholesale business as well as acceleration of tariff expenses in the quarter
• GAAP diluted EPS was $0.36 versus $0.91, and adjusted⁽¹⁾ diluted EPS totaled $0.92 versus $0.95 last year in the comparable period. GAAP and adjusted⁽¹⁾ diluted EPS for fiscal 2025 both include a $0.10 impact from unfavorable foreign tax discrete items

Retail Segment:

• Sales:
  • Written sales for the Retail segment (company-owned La-Z-Boy Furniture Galleries^® stores) increased 3% compared to the year ago period driven primarily by new and acquired stores
    • Written same-store sales decreased 5%, as continued weakness in industry traffic was partially offset by higher average ticket and design sales
  • Delivered sales increased 8% to $247 million versus last year, primarily due to growth from acquired and new stores and positive delivered same-store sales growth
• Operating Margin:
  • GAAP operating margin and GAAP operating income were 13.1% and $32 million, versus 14.1% and $32 million in the prior period, respectively
    • Adjusted⁽¹⁾ operating margin and adjusted⁽¹⁾ operating income were 13.1% and $32 million, down 110 basis points, and flat, respectively, due to investment in new stores

Wholesale Segment:

• Sales:
  • Sales increased 2% to $402 million, driven by growth in our core North America La-Z-Boy wholesale business partially offset by the continued impact of a significant customer transition in our international wholesale business
• Operating Margin:
  • GAAP operating margin decreased to 2.5% versus 8.1%
    • Adjusted⁽¹⁾ operating margin was 8.5%, flat versus the year ago as gross margin and SG&A as a percent of sales were largely unchanged. Continued margin expansion in our core North America La-Z-Boy wholesale business was offset by the margin impact of a significant customer transition in the international wholesale business as well as incremental tariff expenses in the quarter

Corporate & Other:

• Joybird written sales decreased 21% as recent economic and industry trends disproportionately impacted the Joybird online consumer
• Delivered sales decreased 2% to $36 million as positive growth within existing stores was offset by declines in the online business
• Joybird adjusted⁽¹⁾ operating margin was positive in the fourth quarter, relatively flat versus prior year

Balance Sheet and Cash Flow, Fiscal 2025:

• Ended the quarter with $328 million in cash⁽³⁾ and no external debt
• Generated $187 million in cash from operating activities (up 18% from the prior year) including $62 million in the fourth quarter (up 17% from the prior year comparable period), versus $158 million in Fiscal 2024 and $53 million in last year’s fourth quarter
• Invested $74 million in capital expenditures, primarily related to La-Z-Boy Furniture Galleries^® (new stores and remodels)
• Returned approximately $113 million to shareholders, including $78 million in share repurchases and $35 million in dividends, which was raised by 10% to $0.22 in third quarter, the fourth consecutive annual dividend increase

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About La-Z-Boy

La-Z-Boy Incorporated is a global leader in the manufacture and retail of residential furniture, marketing furniture for every room of the home. The Wholesale segment includes La-Z-Boy, England, American Drew^®, Hammary^®, Kincaid^® and the company’s international wholesale and manufacturing businesses. The company-owned Retail segment includes 184 of the 353 La-Z-Boy Furniture Galleries^® stores. The Corporate and Other segment includes Joybird, an e-commerce retailer and manufacturer of upholstered furniture that also has 12 stores in the U.S. The corporation’s branded distribution network is dedicated to selling La-Z-Boy Incorporated products and brands, and includes 353 stand-alone La-Z-Boy Furniture Galleries^® stores and over 500 independent Comfort Studio^® locations, in addition to in-store gallery programs for the company’s Kincaid and England operating units. Additional information is available at https://www.la-z-boy.com/.

Contact:

Mark Becks, CFA – Investor Relations Contact – mark.becks@la-z-boy.com

Source: La-Z-Boy Incorporated