Core Viewpoint - The Trump administration is investigating imported furniture for potential tariffs, which has led to significant stock declines for companies reliant on foreign manufacturing, while some domestic manufacturers have seen stock increases [1][2][5]. Company Impact - Major home goods companies such as Wayfair, RH, and Williams-Sonoma experienced stock declines of over 6% following the announcement [2][4]. - In contrast, La-Z-Boy's shares rose nearly 2.5% as the company primarily manufactures within the United States [5]. Industry Context - The furniture industry is facing challenges, including a year-long decline in demand for big-ticket items due to a sluggish housing market and persistent inflation affecting consumer spending [9][10]. - The investigation into furniture tariffs is part of a broader trade agenda aimed at reducing reliance on foreign manufacturing and encouraging domestic production, particularly in traditional furniture-making states like North Carolina and South Carolina [11][12]. Trade Relations - The timing of the potential tariffs comes amidst ongoing trade negotiations with global partners, which have provided some market stability, although many disputes remain unresolved [8]. - It is unclear whether the new furniture tariffs would be in addition to existing country-specific duty rates negotiated through bilateral trade deals [7][13].

Group 1 - La-Z-Boy Incorporated experienced a significant decline in share price, dropping 12.1% on August 20th [1] - The decline followed the management's report of financial results for the first quarter [1] Group 2 - Crude Value Insights provides an investment service focused on oil and natural gas, emphasizing cash flow and growth prospects [1] - The service includes a stock model account and in-depth cash flow analyses of exploration and production firms [2]

Financial Data and Key Metrics Changes - Consolidated sales for the quarter were $492 million, down slightly from the prior year, with a 1% decrease compared to the previous year [7][18] - Consolidated GAAP operating income was $22 million, and adjusted operating income was $23 million, with an adjusted operating margin of 4.8% [19][22] - The company maintained a strong balance sheet with $319 million in cash and no external debt, generating $36 million in cash from operating activities [7][23][24] Business Line Data and Key Metrics Changes - In the Retail segment, delivered sales increased by 2% to $207 million, driven primarily by new and acquired stores, while written sales decreased by 4% in same-store sales [6][19] - The Wholesale segment saw delivered sales grow by 1% to $353 million, with an adjusted operating margin of 7.5%, up from 6.9% [20][22] - Joybird's delivered sales were down 20% to $28 million, with a noted increase in operating loss due to lower delivered volume [21][22] Market Data and Key Metrics Changes - Industry traffic remains depressed, with housing transactions near thirty-year lows, affecting store traffic and same-store sales [10] - Retail public company peers reported same-store sales ranging from down low to mid-single digits, while broader industry data showed recently downwardly revised figures but still in the positive mid-single digit range [10] Company Strategy and Development Direction - The company is focused on its Century Vision strategy to drive long-term shareholder value, including expanding its direct-to-consumer business and enhancing its retail footprint [11][12] - A significant acquisition of a 15-store network in the Southeast U.S. is expected to close in October, which will be the largest independent La Z Boy Furniture Galleries acquisition in the company's history [11][26] - The company is transforming its distribution network to improve supply chain agility, reducing the number of distribution centers from 15 to 3 centralized hubs [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ability to grow sales and outperform the industry while navigating the current consumer environment [8][30] - The company anticipates fiscal second-quarter sales to be in the range of $510 million to $530 million, with adjusted operating margins expected between 4.5% to 6% [27][28] - Management acknowledged the challenges posed by an increasingly pressured consumer and emphasized the importance of prudent navigation through these conditions [36][46] Other Important Information - The company was recognized by Newsweek as one of America's best retailers in 2025, ranking number one in the furniture category [12] - The company plans to open approximately 15 new company-owned and independent La Z Boy Furniture Gallery stores during the year, with a focus on maximizing store productivity [28][29] Q&A Session Summary Question: Can you provide additional color on the sequential improvement in trends during the quarter? - Management noted that there was a sequential traffic improvement through the first quarter, which has continued into early August, but emphasized that it is too early to call it a trend [34][35] Question: How should we think about the ramp of new stores to maturity and its relation to margins? - New stores typically drag on profitability in year one, with improvements expected in year two and becoming neutral to accretive by year three [37] Question: What are you hearing from wholesale customers regarding order hesitancy due to tariffs and pricing uncertainty? - Management indicated that while there is hesitancy among customers, the company benefits from its North American supply chain, allowing it to provide a steady supply of products [39][40] Question: Did you see notable geographic differences in traffic and sales in North America? - Management reported no significant geographic differences, although Canadian sales were impacted by tariffs, leading to a decrease in units sold offset by pricing [44] Question: Can you expand on the evaluation of alternatives to address financial pressure from non-core parts of the business? - The company is focused on expanding the La Z Boy brand and improving performance in challenged areas like Joybird and international business [45][46] Question: How are you thinking about the pace of new store openings and distribution transformation in light of uneven demand? - Management emphasized the importance of playing offense even in challenging times, while also committing to monitor the situation prudently [47][48] Question: Is the higher promotional activity in case goods expected to continue? - Management indicated that the promotional activity was more transitory, aimed at working through non-performing inventory ahead of the key buying season [49]

Group 1 - U.S. stock futures are slightly lower, with S&P 500 futures down approximately 0.1% [1] - La-Z-Boy Incorporated reported weaker-than-expected financial results for Q1 of fiscal 2026, leading to a significant drop in its share price [1][2] - La-Z-Boy expects Q2 revenue to be between $510 million and $530 million, below the estimate of $531.67 million, citing a challenging consumer and macroeconomic environment [2] Group 2 - James Hardie Industries plc shares fell 27% to $20.72 following disappointing quarterly financial results [4] - Celldex Therapeutics, Inc. shares decreased by 16.7% to $20.00 after reporting Phase 2 topline results for Barzolvolimab in Eosinophilic Esophagitis [4] - Alcon Inc. shares declined 12.3% to $79.06 after the company reduced its FY25 sales guidance [4] - Dycom Industries, Inc. shares fell 11% to $240.00 following its second-quarter results [4] - Target Corporation shares dipped 9.8% to $95.00 after its second-quarter earnings report, while reaffirming its 2025 outlook and announcing a new CEO [4] - enCore Energy Corp. shares decreased by 8.5% to $2.36 as the company priced its upsized $100 million convertible senior notes offering [4] - The Estée Lauder Companies Inc. shares fell 8.5% to $82.34 after reporting quarterly results [4] - Novavax, Inc. shares dropped 7% to $8.86 in pre-market trading [4]

Company Performance - La-Z-Boy reported quarterly earnings of $0.47 per share, missing the Zacks Consensus Estimate of $0.53 per share, and down from $0.62 per share a year ago, representing an earnings surprise of -11.32% [1] - The company posted revenues of $492.23 million for the quarter ended July 2025, surpassing the Zacks Consensus Estimate by 0.39%, but down from $495.53 million year-over-year [2] - Over the last four quarters, La-Z-Boy has surpassed consensus EPS estimates two times and topped consensus revenue estimates four times [2] Market Performance - La-Z-Boy shares have lost about 12% since the beginning of the year, while the S&P 500 has gained 9.7% [3] - The current consensus EPS estimate for the upcoming quarter is $0.72 on revenues of $533.1 million, and for the current fiscal year, it is $3.17 on revenues of $2.16 billion [7] Industry Outlook - The furniture industry, to which La-Z-Boy belongs, is currently in the bottom 9% of the Zacks industry rankings, indicating potential challenges ahead [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact La-Z-Boy's stock performance [5][6]

Financial Performance - Consolidated sales decreased by $3.3 million, or 1%, in Q1 of fiscal 2026 compared to the same period last year[94]. - Operating income fell to $21.987 million, a decrease of 32.1% from $32.370 million in Q1 of fiscal 2025[93]. - Total written sales increased by 5% in Q1 of fiscal 2026 compared to the same period last year, while written same-store sales decreased by 4% due to lower consumer demand[100]. - Corporate and Other sales decreased by $7.5 million in Q1 of fiscal 2026, with Joybird sales specifically declining by $6.8 million[108]. - Net cash provided by operating activities was $36.3 million in Q1 of fiscal 2026, a decrease of $16.0 million compared to the same period last year[117]. - Cash and cash equivalents were $318.5 million as of July 26, 2025, down from $328.4 million at April 26, 2025[115]. Segment Performance - Retail segment sales increased by $4.8 million, or 2%, primarily due to $8.4 million from retail store acquisitions in fiscal 2025[99]. - The Retail segment's operating margin decreased by 390 basis points in Q1 of fiscal 2026 compared to the same period last year[101]. - Operating margin for the Retail segment decreased to 6.3% from 10.2% in the prior year[97]. - The Wholesale segment's sales increased by $2.1 million, or 1%, in Q1 of fiscal 2026, driven by growth in the North America La-Z-Boy branded wholesale business[103]. Cost and Expenses - SG&A expenses as a percentage of sales increased by 140 basis points in Q1 of fiscal 2026 compared to the same period last year[98]. - SG&A expenses as a percentage of sales increased by 360 basis points in Q1 of fiscal 2026, primarily due to fixed cost deleverage from lower same-store sales[105]. - Gross margin decreased by 60 basis points in Q1 of fiscal 2026, impacted by higher supply chain costs and increased promotional activity[98]. - Gross margin decreased by 30 basis points in Q1 of fiscal 2026, primarily due to increased promotional activity and higher distribution costs[105][106]. Strategic Initiatives - Joybird is focusing on profitable growth through additional small-format stores and increased digital marketing spend[90]. - The company aims to enhance enterprise capabilities to support growth and potential acquisitions[91]. - The strategic plan, Century Vision, aims for growth in sales and market share by 2027[85]. Capital and Tax - Capital expenditures in fiscal 2026 are expected to be in the range of $90 to $100 million, primarily related to new stores and manufacturing investments[119]. - The effective tax rate was 25.0% for Q1 of fiscal 2026, compared to 25.5% for the same period last year[112].

Financial Performance - Total sales for the first quarter of fiscal 2026 were $492 million, a decrease of 1% compared to the prior year[2] - Sales for the quarter ended July 26, 2025, were $492,229,000, a decrease of 0.6% compared to $495,532,000 for the same quarter in 2024[28] - Gross profit for the quarter was $209,197,000, down from $213,343,000, resulting in a gross margin of 42.5%[28] - Operating income decreased to $21,987,000 from $32,370,000, reflecting a decline of 32% year-over-year[28] - Net income attributable to La-Z-Boy Incorporated was $18,204,000, compared to $26,159,000 in the prior year, representing a decrease of 30.4%[28] - Adjusted net income attributable to La-Z-Boy Incorporated was $19,335,000, down from $26,453,000, with adjusted diluted EPS at $0.47 compared to $0.62[35] Sales Segments - Retail segment written sales increased by 5%, while same-store sales decreased by 4% due to challenging consumer demand[4] - Joybird's written sales decreased by 14%, with delivered sales down 20% to $28 million[12] - The wholesale segment reported sales of $352,957,000, while the retail segment reported $207,150,000, showing a slight increase in both segments compared to the previous year[34] Margins and Earnings - GAAP operating margin was 4.5%, down from 6.5% in the prior year, while adjusted operating margin was 4.8%, down from 6.6%[6] - Diluted earnings per share (EPS) were $0.44 on a GAAP basis and $0.47 on an adjusted basis, representing a decrease of 28% and 24% respectively compared to the previous year[6] - Fiscal second quarter sales are expected to be in the range of $510-530 million, with adjusted operating margin projected between 4.5-6.0%[6] Cash Flow and Financial Health - The company generated $36 million in operating cash flow for the quarter[4] - The company ended the quarter with $319 million in cash and no external debt[18] - Cash and cash equivalents at the end of the period were $318,544,000, a decrease from $342,270,000 at the end of the same quarter last year[31] - Total current liabilities decreased to $416,290,000 from $420,791,000, indicating improved short-term financial health[30] Acquisitions and Recognition - La-Z-Boy announced the acquisition of a 15-store network in the Southeast region, expected to close in late October[4] - La-Z-Boy was named by Newsweek as one of America's Best Retailers in 2025, ranking 1 in the furniture category[3] Assets - Total assets increased slightly to $1,925,953,000 from $1,922,162,000[30] - The company incurred $1,309,000 in distribution transformation charges during the quarter, impacting operating income[35]

Core Insights - La-Z-Boy Incorporated reported a 1% decrease in sales for the first quarter of fiscal 2026, totaling $492 million, with growth in Retail and Wholesale segments offset by a decline in Joybird sales [2][12] - The company achieved an operating margin of 4.5% on a GAAP basis and 4.8% on an adjusted basis, reflecting challenges in consumer demand and investments in new stores [2][12] - Diluted earnings per share were $0.44 on a GAAP basis and $0.47 on an adjusted basis, both lower than the previous year [2][12] Financial Performance - Retail segment written sales increased by 5%, while same-store sales decreased by 4%, indicating a challenging consumer environment [3][17] - Wholesale segment delivered sales increased by 1%, driven by the core North America La-Z-Boy wholesale business [4][7] - The company returned $22 million to shareholders during the quarter, including $13 million in share repurchases and $9 million in dividends [2][17] Strategic Developments - La-Z-Boy announced the acquisition of a 15-store network in the Southeast region, expected to close in late October [4][7] - The company was recognized by Newsweek as one of America's Best Retailers in 2025, ranking 1 in the furniture category [5] - The company is actively adjusting operations to navigate the current environment while continuing to invest in its Century Vision strategy for long-term growth [4][5] Outlook - For the second quarter, La-Z-Boy expects sales to be in the range of $510-530 million, with an adjusted operating margin of 4.5-6.0% [6][7] - The company is balancing optimism about long-term industry fundamentals with a pragmatic approach to current consumer demand [5][6] Cash Flow and Liquidity - The company generated $36 million in operating cash flow for the quarter and ended with $319 million in cash and no external debt [7][17] - Free cash flow for the quarter was $17.8 million, down from $36.7 million in the prior year [9][17] Segment Analysis - Retail segment delivered sales increased by 2% to $207 million, driven by new and acquired stores [17] - Joybird sales decreased significantly, with written sales down 14% and delivered sales down 20% to $28 million [12][17] - The Wholesale segment's sales increased to $353 million, supported by growth in the core North America business [12][37]

Core Viewpoint - La-Z-Boy Incorporated is set to report its Fiscal 2026 First Quarter results on August 19, 2025, with a subsequent investor conference call scheduled for August 20, 2025 [1]. Company Overview - La-Z-Boy Incorporated is a vertically integrated furniture retailer and manufacturer, known for its iconic recliner invented in 1927, and is committed to quality and consumer compassion [4]. - The company operates over 200 company-owned La-Z-Boy Furniture Galleries stores and is part of a network of nearly 370 stores nationwide, complemented by its online presence [5]. Retail and Wholesale Segments - The Retail segment includes La-Z-Boy Furniture Galleries and Joybird, an e-commerce retailer with 13 stores in the U.S. [5]. - In the Wholesale segment, La-Z-Boy manufactures custom furniture for various retail channels, including England Furniture Co. and casegoods brands like Kincaid, American Drew, and Hammary [5].

Core Insights - La-Z-Boy Incorporated has signed an asset purchase agreement to acquire a La-Z-Boy Furniture Galleries store network in the southeast U.S. from Atlanta Furniture Galleries, LLC, which includes 15 stores and approximately $80 million in annual sales [2][3] Acquisition Details - The acquisition will enhance La-Z-Boy's presence in the southeast region, adding 15 stores to its Retail segment and increasing the total company-owned store count to 220, representing 60% of the entire La-Z-Boy Furniture Galleries network [3] - The transaction is expected to close in late October 2025, subject to customary closing conditions [3] - The acquisition is anticipated to contribute approximately $40 million in additional annual sales to La-Z-Boy on a consolidated basis [4] Strategic Importance - The stores are located in key markets such as Atlanta, Orlando, Jacksonville, and Knoxville, which are considered core markets for La-Z-Boy, facilitating further growth opportunities [4] - This acquisition is noted as the largest independently owned La-Z-Boy Furniture Galleries acquisition in the company's history [5] Financial Outlook - La-Z-Boy expects its fiscal first quarter sales and adjusted operating margin to be around the low end of previously issued outlook ranges due to challenging consumer and macroeconomic conditions [5][6]