La-Z-Boy Inc.’s stock slumped 12% in after-hours trading Tuesday after the company posted quarterly results that fell short of analysts’ revenue and earnings estimates. The furniture maker LZB, -0.74% reported fiscal third-quarter net income of $28.7 million, or 67 cents a share, compared with net income of $31.7 million, or 74 cents a share, in the same quarter a year ago. Revenue dropped 13% to $500.4 million, from $572.7 million in the year-ago quarter. Analysts surveyed by FactSet had expected on av ...

[PART I - FINANCIAL INFORMATION (UNAUDITED)](index=3&type=section&id=PART%20I%20Financial%20Information%20(Unaudited)) Presents unaudited consolidated financial statements and management's discussion for reported periods [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements of La-Z-Boy Incorporated for the third quarter and nine months ended January 27, 2024, including key financial statements and detailed notes [Consolidated Statement of Income](index=3&type=section&id=Consolidated%20Statement%20of%20Income) This statement details the company's revenues, costs, and net income for the reported quarterly and nine-month periods Consolidated Statement of Income (Unaudited, amounts in thousands, except per share data) | Metric | Quarter Ended 1/27/2024 | Quarter Ended 1/28/2023 | Nine Months Ended 1/27/2024 | Nine Months Ended 1/28/2023 | | :--------------------------------------- | :---------------------- | :---------------------- | :-------------------------- | :-------------------------- | | Sales | $500,406 | $572,723 | $1,493,492 | $1,788,146 | | Cost of sales | 287,152 | 337,142 | 851,905 | 1,072,051 | | Gross profit | 213,254 | 235,581 | 641,587 | 716,095 | | Selling, general and administrative expense | 180,693 | 192,741 | 540,888 | 558,729 | | Operating income | 32,561 | 42,840 | 100,699 | 157,366 | | Net income attributable to La-Z-Boy Incorporated | $28,640 | $31,726 | $83,318 | $116,291 | | Basic net income per share | $0.67 | $0.74 | $1.94 | $2.70 | | Diluted net income per share | $0.66 | $0.74 | $1.92 | $2.70 | [Consolidated Statement of Comprehensive Income](index=4&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) This statement presents net income and other comprehensive income items, reflecting total changes in equity from non-owner sources Consolidated Statement of Comprehensive Income (Unaudited, amounts in thousands) | Metric | Quarter Ended 1/27/2024 | Quarter Ended 1/28/2023 | Nine Months Ended 1/27/2024 | Nine Months Ended 1/28/2023 | | :------------------------------------------ | :---------------------- | :---------------------- | :-------------------------- | :-------------------------- | | Net income | $28,684 | $31,577 | $84,304 | $117,296 | | Currency translation adjustment | 2,262 | 5,441 | (306) | (72) | | Net unrealized gain on marketable securities, net of tax | 342 | 287 | 475 | 84 | | Net pension amortization, net of tax | 23 | 36 | 70 | 109 | | Total other comprehensive income | 2,627 | 5,764 | 239 | 121 | | Total comprehensive income attributable to La-Z-Boy Incorporated | $31,152 | $36,063 | $83,966 | $115,908 | [Consolidated Balance Sheet](index=5&type=section&id=Consolidated%20Balance%20Sheet) This statement provides a snapshot of the company's assets, liabilities, and equity at specific points in time Consolidated Balance Sheet (Unaudited, amounts in thousands) | Metric | 1/27/2024 | 4/29/2023 | | :--------------------------------------- | :-------- | :-------- | | **Assets** | | | | Cash and equivalents | $329,324 | $343,374 | | Total current assets | 850,391 | 854,600 | | Total assets | $1,918,292 | $1,866,263 | | **Liabilities** | | | | Total current liabilities | 439,942 | 475,861 | | Total liabilities and equity | $1,918,292 | $1,866,263 | | **Equity** | | | | Total La-Z-Boy Incorporated shareholders' equity | 978,220 | 941,836 | | Total equity | 987,886 | 952,097 | [Consolidated Statement of Cash Flows](index=6&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) This statement summarizes cash inflows and outflows from operating, investing, and financing activities Consolidated Statement of Cash Flows (Unaudited, amounts in thousands) | Metric | Nine Months Ended 1/27/2024 | Nine Months Ended 1/28/2023 | | :--------------------------------------- | :-------------------------- | :-------------------------- | | Net cash provided by operating activities | $105,354 | $127,052 | | Net cash used for investing activities | (54,029) | (57,965) | | Net cash used for financing activities | (64,476) | (33,894) | | Change in cash, cash equivalents and restricted cash | $(13,499) | $35,189 | | Cash, cash equivalents and restricted cash at end of period | $333,179 | $284,045 | [Consolidated Statement of Changes in Equity](index=7&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) Outlines changes in equity components, including common stock, retained earnings, and comprehensive income Consolidated Statement of Changes in Equity (Unaudited, amounts in thousands) | Metric | At April 29, 2023 | At January 27, 2024 | | :--------------------------------------- | :---------------- | :------------------ | | Common Shares | $43,318 | $42,613 | | Capital in Excess of Par Value | $358,891 | $365,111 | | Retained Earnings | $545,155 | $575,376 | | Accumulated Other Comprehensive Income (Loss) | $(5,528) | $(4,880) | | Non Controlling Interests | $10,261 | $9,666 | | Total Equity | $952,097 | $987,886 | - During the nine months ended January 27, 2024, the company repurchased **1.3 million shares** of common stock for **$40.0 million**[129](index=129&type=chunk) - Dividends declared and paid to shareholders totaled **$24.177 million** for the nine months ended January 27, 2024[129](index=129&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [Note 1. Basis of Presentation](index=9&type=section&id=Note%201.%20Basis%20of%20Presentation) The financial statements are unaudited and prepared in conformity with US GAAP, consistent with the fiscal 2023 10-K. The company adopted ASU 2021-08 in fiscal 2024, which had no material impact. Several other ASUs are not yet adopted but are not expected to have a material impact. A voluntary change in accounting policy was made to reclassify distribution center costs from SG&A to cost of sales, with retrospective adjustment, having no impact on net income or EPS - The company adopted ASU 2021-08 (Business Combinations) in fiscal 2024, which did not have a material impact[25](index=25&type=chunk) - Voluntary change in accounting policy reclassified distribution center costs from SG&A to cost of sales, retrospectively adjusted, with no impact on sales, operating income, net income, or EPS[29](index=29&type=chunk)[30](index=30&type=chunk) Retrospective Adjustment for Distribution Center Costs (Unaudited, amounts in thousands) | Metric | Previously Reported (Q3 FY23) | Effect of Change (Q3 FY23) | As Adjusted (Q3 FY23) | | :--------------------------------------- | :---------------------------- | :------------------------- | :-------------------- | | Cost of sales | $326,296 | $10,846 | $337,142 | | Gross profit | 246,427 | (10,846) | 235,581 | | Selling, general and administrative expense | 203,587 | (10,846) | 192,741 | | Metric | Previously Reported (9M FY23) | Effect of Change (9M FY23) | As Adjusted (9M FY23) | | :--------------------------------------- | :---------------------------- | :------------------------- | :-------------------- | | Cost of sales | $1,039,523 | $32,528 | $1,072,051 | | Gross profit | 748,623 | (32,528) | 716,095 | | Selling, general and administrative expense | 591,257 | (32,528) | 558,729 | [Note 2. Acquisitions](index=10&type=section&id=Note%202.%20Acquisitions) The company completed several retail acquisitions in fiscal 2024 and 2023, including businesses in Illinois, Indiana, Lafayette (Louisiana), and Colorado Springs (Colorado). These acquisitions are part of a strategic priority to grow company-owned retail and leverage the integrated retail model, reacquiring indefinite-lived rights to operate La-Z-Boy Furniture Galleries stores - Acquired Illinois and Indiana businesses (6 stores, 1 distribution center) for **$18.4 million** on December 11, 2023, including **$4.2 million** in reacquired indefinite-lived intangible assets[34](index=34&type=chunk) - Acquired Lafayette, Louisiana business (1 store, 1 distribution center) for **$2.8 million** on October 23, 2023, recognizing **$0.7 million** in reacquired rights and **$2.1 million** in goodwill[35](index=35&type=chunk) - Acquired Colorado Springs, Colorado business (2 stores, 1 distribution center) for **$6.0 million** on July 17, 2023, recognizing **$2.1 million** in reacquired rights and **$2.2 million** in goodwill[36](index=36&type=chunk) [Note 3. Cash and Restricted Cash](index=11&type=section&id=Note%203.%20Cash%20and%20Restricted%20Cash) The company maintains cash and cash equivalents, along with restricted cash primarily as collateral for letters of credit Cash and Restricted Cash (Unaudited, amounts in thousands) | Metric | 1/27/2024 | 1/28/2023 | | :--------------------------------------- | :-------- | :-------- | | Cash and cash equivalents | $329,324 | $280,763 | | Restricted cash | 3,855 | 3,282 | | Total cash, cash equivalents and restricted cash | $333,179 | $284,045 | [Note 4. Inventories](index=11&type=section&id=Note%204.%20Inventories) The company's inventories consist of raw materials, work in process, and finished goods, valued using the FIFO method, with an adjustment for the excess of FIFO over LIFO Inventories Summary (Unaudited, amounts in thousands) | Metric | 1/27/2024 | 4/29/2023 | | :--------------------------------------- | :-------- | :-------- | | Raw materials | $138,143 | $116,440 | | Work in process | 19,796 | 24,328 | | Finished goods | 164,806 | 181,401 | | FIFO inventories | 322,745 | 322,169 | | Excess of FIFO over LIFO | (45,912) | (45,912) | | Total inventories | $276,833 | $276,257 | [Note 5. Goodwill and Other Intangible Assets](index=12&type=section&id=Note%205.%20Goodwill%20and%20Other%20Intangible%20Assets) Goodwill and other intangible assets are reported across the Wholesale, Retail, and Corporate and Other segments. Goodwill increased by **$4.275 million** due to acquisitions and **$0.243 million** from translation adjustments, totaling **$209.526 million** as of January 27, 2024. Intangible assets, primarily reacquired rights, increased by **$6.983 million** from acquisitions Changes in Goodwill by Segment (Unaudited, amounts in thousands) | Segment | Balance at April 29, 2023 | Acquisitions | Translation adjustment | Balance at January 27, 2024 | | :--------------------------------------- | :------------------------ | :----------- | :--------------------- | :-------------------------- | | Wholesale Segment | $20,202 | — | $217 | $20,419 | | Retail Segment | 129,360 | 4,275 | 26 | 133,661 | | Corporate and Other | 55,446 | — | — | 55,446 | | Total Goodwill | $205,008 | $4,275 | $243 | $209,526 | Changes in Intangible Assets (Unaudited, amounts in thousands) | Metric | Balance at April 29, 2023 | Acquisitions | Amortization | Translation adjustment | Balance at January 27, 2024 | | :--------------------------------------- | :------------------------ | :----------- | :----------- | :--------------------- | :-------------------------- | | Indefinite Lived Trade Names | $1,155 | — | — | — | $1,155 | | Finite-Lived Trade Name | 2,594 | — | (599) | — | 1,995 | | Indefinite Lived Reacquired Rights | 33,739 | 6,983 | — | 19 | 40,741 | | Other Intangible Assets | 1,887 | — | (163) | 18 | 1,742 | | Total Intangible Assets | $39,375 | $6,983 | $(762) | $37 | $45,633 | [Note 6. Investments](index=12&type=section&id=Note%206.%20Investments) The company holds short-term and long-term investments to enhance cash returns and fund compensation/retirement plans. Total investments decreased from **$24.903 million** at April 29, 2023, to **$20.835 million** at January 27, 2024 Investments Summary (Unaudited, amounts in thousands) | Metric | 1/27/2024 | 4/29/2023 | | :--------------------------------------- | :-------- | :-------- | | Short-term investments | $7,837 | $6,394 | | Long-term investments | 12,998 | 18,509 | | Total investments | $20,835 | $24,903 | | Investments to enhance returns on cash | $7,748 | $11,617 | | Investments to fund compensation/retirement plans | 13,087 | 13,286 | Sales of Marketable Securities (Unaudited, amounts in thousands) | Metric | Quarter Ended 1/27/2024 | Quarter Ended 1/28/2023 | Nine Months Ended 1/27/2024 | Nine Months Ended 1/28/2023 | | :--------------------------------------- | :---------------------- | :---------------------- | :-------------------------- | :-------------------------- | | Proceeds from sales | $1,381 | $5,514 | $21,849 | $18,178 | | Gross realized gains | 33 | 3 | 1,909 | 52 | | Gross realized losses | — | (81) | (740) | (207) | [Note 7. Product Warranties](index=13&type=section&id=Note%207.%20Product%20Warranties) The company accrues an estimated liability for product warranties based on historical claims experience, with over **90%** related to the Wholesale segment. The warranty liability increased slightly from **$30.984 million** at the beginning of the nine-month period to **$31.306 million** at January 27, 2024 Product Warranty Liability Reconciliation (Unaudited, amounts in thousands) | Metric | Quarter Ended 1/27/2024 | Quarter Ended 1/28/2023 | Nine Months Ended 1/27/2024 | Nine Months Ended 1/28/2023 | | :--------------------------------------- | :---------------------- | :---------------------- | :-------------------------- | :-------------------------- | | Balance as of the beginning of the period | $31,127 | $28,357 | $30,984 | $27,036 | | Accruals during the period | 6,272 | 8,663 | 19,894 | 24,942 | | Settlements during the period | (6,093) | (7,722) | (19,572) | (22,680) | | Balance as of the end of the period | $31,306 | $29,298 | $31,306 | $29,298 | [Note 8. Stock-Based Compensation](index=14&type=section&id=Note%208.%20Stock-Based%20Compensation) Total stock-based compensation expense increased to **$3.842 million** for Q3 FY24 and **$11.232 million** for 9M FY24, up from **$3.323 million** and **$8.548 million** in the prior year periods, respectively. The company granted restricted stock units, restricted stock units to directors, and performance-based shares in fiscal 2024 Total Stock-Based Compensation Expense (Unaudited, amounts in thousands) | Metric | Quarter Ended 1/27/2024 | Quarter Ended 1/28/2023 | Nine Months Ended 1/27/2024 | Nine Months Ended 1/28/2023 | | :--------------------------------------- | :---------------------- | :---------------------- | :-------------------------- | :-------------------------- | | Equity-based awards expense | $3,711 | $3,377 | $11,048 | $8,456 | | Liability-based awards expense | 131 | (54) | 184 | 92 | | Total stock-based compensation expense | $3,842 | $3,323 | $11,232 | $8,548 | - During the first quarter of fiscal 2024, **330,140 shares** of restricted stock units were granted to employees with a weighted-average fair value of **$27.66 per share**[51](index=51&type=chunk) - During the first nine months of fiscal 2024, **35,736 restricted stock units** were granted to non-employee directors with a weighted-average fair value of **$30.80 per share**[52](index=52&type=chunk) [Note 9. Accumulated Other Comprehensive Loss](index=15&type=section&id=Note%209.%20Accumulated%20Other%20Comprehensive%20Loss) Accumulated other comprehensive loss improved from **$(7.392) million** at October 28, 2023, to **$(4.880) million** at January 27, 2024, primarily due to positive currency translation adjustments and unrealized gains on marketable securities Activity in Accumulated Other Comprehensive Income (Loss) (Unaudited, amounts in thousands) | Metric | Balance at Oct 28, 2023 | Changes before reclassifications | Amounts reclassified to net income | Tax effect | Balance at Jan 27, 2024 | | :--------------------------------------- | :---------------------- | :------------------------------- | :------------------------------- | :--------- | :---------------------- | | Translation adjustment | $(4,696) | $2,147 | — | — | $(2,549) | | Unrealized gain (loss) on marketable securities | (12) | 454 | — | (112) | 330 | | Net pension amortization and net actuarial loss | (2,684) | — | 31 | (8) | (2,661) | | Total | $(7,392) | $2,601 | $31 | $(120) | $(4,880) | [Note 10. Revenue Recognition](index=16&type=section&id=Note%2010.%20Revenue%20Recognition) Revenue is primarily derived from product sales, recognized when control passes to the customer (shipment for retailers/distributors, delivery for end consumers). The company applies accounting policy elections for shipping and handling as fulfillment activities and excludes sales taxes from transaction price. Contract assets and liabilities (customer deposits and deferred revenue) are also presented Revenue Disaggregated by Product Category and Segment (Unaudited, amounts in thousands) | Product Category | Wholesale (Q3 FY24) | Retail (Q3 FY24) | Corporate and Other (Q3 FY24) | Total (Q3 FY24) | | :--------------------------------------- | :------------------ | :--------------- | :---------------------------- | :-------------- | | Upholstered Furniture | $300,568 | $168,473 | $46,187 | $515,228 | | Casegoods Furniture | 19,483 | 11,021 | 3,677 | 34,181 | | Delivery | 39,633 | 8,430 | 1,773 | 49,836 | | Other | (3,309) | 16,772 | (13,505) | (42) | | Total | $356,375 | $204,696 | $38,132 | $599,203 | | Product Category | Wholesale (9M FY24) | Retail (9M FY24) | Corporate and Other (9M FY24) | Total (9M FY24) | | :--------------------------------------- | :------------------ | :--------------- | :---------------------------- | :-------------- | | Upholstered Furniture | $898,757 | $512,176 | $135,617 | $1,546,550 | | Casegoods Furniture | 60,211 | 35,796 | 12,633 | 108,640 | | Delivery | 123,331 | 25,542 | 5,430 | 154,303 | | Other | (27,482) | 53,734 | (39,255) | (13,003) | | Total | $1,054,817 | $627,248 | $114,425 | $1,796,490 | Contract Assets and Liabilities (Unaudited, amounts in thousands) | Metric | 1/27/2024 | 4/29/2023 | | :--------------------------------------- | :-------- | :-------- | | Contract assets | $43,259 | $44,939 | | Customer deposits | $102,438 | $105,766 | | Deferred revenue | 43,259 | 44,939 | | Total contract liabilities | $145,697 | $150,705 | [Note 11. Segment Information](index=18&type=section&id=Note%2011.%20Segment%20Information) The company operates through two reportable segments: Wholesale and Retail, along with a Corporate and Other category. The Wholesale segment manufactures and imports upholstered and casegoods furniture, selling to various retailers. The Retail segment consists of company-owned La-Z-Boy Furniture Galleries stores selling primarily upholstered furniture to end consumers. Corporate and Other includes shared corporate costs, royalty revenue, and the Joybird e-commerce retailer Sales and Operating Income (Loss) by Segment (Unaudited, amounts in thousands) | Metric | Wholesale (Q3 FY24) | Retail (Q3 FY24) | Corporate and Other (Q3 FY24) | Consolidated (Q3 FY24) | | :--------------------------------------- | :------------------ | :--------------- | :---------------------------- | :--------------------- | | Sales to external customers | $260,542 | $204,696 | $35,168 | $500,406 | | Intersegment sales | 95,833 | — | 2,964 | — | | Total Sales | $356,375 | $204,696 | $38,132 | $500,406 | | Operating Income (Loss) | $22,711 | $22,313 | $(12,463) | $32,561 | | Metric | Wholesale (9M FY24) | Retail (9M FY24) | Corporate and Other (9M FY24) | Consolidated (9M FY24) | | :--------------------------------------- | :------------------ | :--------------- | :---------------------------- | :--------------------- | | Sales to external customers | $760,531 | $627,248 | $105,713 | $1,493,492 | | Intersegment sales | 294,286 | — | 8,712 | — | | Total Sales | $1,054,817 | $627,248 | $114,425 | $1,493,492 | | Operating Income (Loss) | $67,664 | $79,512 | $(46,477) | $100,699 | [Note 12. Income Taxes](index=19&type=section&id=Note%2012.%20Income%20Taxes) The effective tax rate for Q3 FY24 was **20.2%** (down from **27.7%** in Q3 FY23) and **24.5%** for 9M FY24 (down from **26.6%** in 9M FY23). The Q3 FY24 reduction was primarily due to favorable return to provision adjustments from the prior year, otherwise it would have been **25.6%** Effective Tax Rates | Period | Effective Tax Rate (FY24) | Effective Tax Rate (FY23) | | :--------------------------------------- | :------------------------ | :------------------------ | | Third Quarter | 20.2% | 27.7% | | Nine Months Ended | 24.5% | 26.6% | - The reduced effective tax rate in Q3 FY24 was primarily due to favorable return to provision adjustments from the prior year. Absent these discrete items, the effective tax rate would have been **25.6%** for Q3 FY24[70](index=70&type=chunk) [Note 13. Earnings per Share](index=20&type=section&id=Note%2013.%20Earnings%20per%20Share) Basic and diluted EPS decreased for both the third quarter and nine months ended January 27, 2024, compared to the prior year. The diluted share calculation excludes anti-dilutive options Earnings per Share (Unaudited, amounts in thousands, except per share data) | Metric | Quarter Ended 1/27/2024 | Quarter Ended 1/28/2023 | Nine Months Ended 1/27/2024 | Nine Months Ended 1/28/2023 | | :--------------------------------------- | :---------------------- | :---------------------- | :-------------------------- | :-------------------------- | | Net income available to common Shareholders | $28,640 | $31,726 | $83,318 | $116,291 | | Basic weighted average common shares outstanding | 42,767 | 43,137 | 43,005 | 43,111 | | Diluted weighted average common shares outstanding | 43,195 | 43,137 | 43,344 | 43,111 | | Basic EPS | $0.67 | $0.74 | $1.94 | $2.70 | | Diluted EPS | $0.66 | $0.74 | $1.92 | $2.70 | - Options to purchase **0.2 million shares** (Q3 FY24) and **0.5 million shares** (9M FY24) were excluded from diluted EPS calculation as they were anti-dilutive[73](index=73&type=chunk) [Note 14. Fair Value Measurements](index=20&type=section&id=Note%2014.%20Fair%20Value%20Measurements) The company categorizes financial assets and liabilities into a three-level hierarchy based on the observability of inputs used for valuation. Marketable securities and held-to-maturity investments are measured at fair value on a recurring basis, with no transfers between levels during the reported periods Fair Value Measurements at January 27, 2024 (Unaudited, amounts in thousands) | Asset Type | Level 1 | Level 2 | Level 3 | NAV (1) | Total | | :--------------------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | Marketable securities | $— | $9,026 | $— | $10,505 | $19,531 | | Held-to-maturity investments | 1,304 | — | — | — | 1,304 | | Total assets | $1,304 | $9,026 | $— | $10,505 | $20,835 | Fair Value Measurements at April 29, 2023 (Unaudited, amounts in thousands) | Asset Type | Level 1 | Level 2 | Level 3 | NAV (1) | Total | | :--------------------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | Marketable securities | $— | $16,557 | $— | $6,995 | $23,552 | | Held-to-maturity investments | 1,351 | — | — | — | 1,351 | | Total assets | $1,351 | $16,557 | $— | $6,995 | $24,903 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, condition, and operational results for the third quarter and nine months ended January 27, 2024 [Cautionary Note Regarding Forward-Looking Statements](index=23&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section serves as a disclaimer, highlighting that statements about future expectations, projections, or trends are forward-looking and subject to various risks and uncertainties - Forward-looking statements are subject to various unforeseeable risks and uncertainties, and actual results may differ materially[84](index=84&type=chunk)[85](index=85&type=chunk) [Introduction](index=23&type=section&id=Introduction) La-Z-Boy Incorporated is a leading global producer of reclining chairs and a major residential furniture manufacturer/distributor in the U.S. The company's supply chain includes manufacturing in the U.S. and Mexico, a logistics company, and a global trading company in Hong Kong. The 'Century Vision Strategy' aims for growth, increased market share, and strengthened operating margins by focusing on the La-Z-Boy and Joybird brands, expanding retail networks, and enhancing enterprise capabilities [Our Business](index=23&type=section&id=Our%20Business) Describes La-Z-Boy's core business as a leading global producer of reclining chairs and residential furniture - La-Z-Boy is the leading global producer of reclining chairs and the second-largest manufacturer/distributor of residential furniture in the United States[86](index=86&type=chunk) - The company manufactures, markets, imports, exports, distributes, and retails upholstery furniture under La-Z-Boy, England, Kincaid, and Joybird tradenames, and casegoods under Kincaid, American Drew, Hammary, and Joybird[86](index=86&type=chunk) [Supply Chain Operations](index=23&type=section&id=Supply%20Chain%20Operations) Details the company's manufacturing, distribution, and logistics network across various geographies - Supply chain includes five major manufacturing locations and 15 distribution centers in the U.S., four facilities in Mexico, a logistics company, a wholesale sales office in the UK/Ireland, an upholstery manufacturing business in the UK, and a global trading company in Hong Kong[87](index=87&type=chunk) - In Q3 FY23, the Torreón, Mexico manufacturing facility was closed, resulting in **$9.2 million** in SG&A impairment charges and **$1.6 million** in cost of sales. In Q1 FY24, a **$1.2 million** gain was recognized from lease settlement[88](index=88&type=chunk) - In Q2/Q3 FY24, further supply chain optimization led to shifting upholstery production from Ramos, Mexico, and closing the Parras, Mexico cut and sew facility, incurring **$3.8 million** in cost of sales and **$3.0 million** in SG&A accelerated depreciation[89](index=89&type=chunk) [Century Vision Strategy](index=25&type=section&id=Century%20Vision%20Strategy) Outlines the long-term strategy to grow sales, market share, and operating margins by 2027 - The 'Century Vision Strategy' aims to deliver long-term shareholder value by growing sales and market share and strengthening operating margins by 2027[92](index=92&type=chunk) - Key strategic pillars include expanding the La-Z-Boy brand reach (reinvigorating brand, growing Furniture Galleries network, expanding wholesale channels), profitably growing the Joybird brand, and enhancing enterprise capabilities[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk) - The proprietary floor space dedicated to La-Z-Boy branded products in North America is approximately **7.6 million square feet**, with an additional **2.6 million square feet** outside the U.S. and Canada[92](index=92&type=chunk) [Reportable Segments](index=26&type=section&id=Reportable%20Segments) Defines the company's operational segments: Wholesale, Retail, and Corporate and Other - The Wholesale segment manufactures and imports upholstered and casegoods furniture, selling to various retailers and company-owned stores[98](index=98&type=chunk)[99](index=99&type=chunk) - The Retail segment comprises **184 company-owned** La-Z-Boy Furniture Galleries stores, selling primarily upholstered furniture to end consumers[98](index=98&type=chunk) - Corporate and Other includes shared corporate costs, royalty agreements, and Joybird, an e-commerce retailer of upholstered and casegoods furniture[99](index=99&type=chunk) - La-Z-Boy is the leading global producer of reclining chairs and the second-largest manufacturer/distributor of residential furniture in the U.S[86](index=86&type=chunk) - The company's 'Century Vision Strategy' aims to grow sales and market share and strengthen operating margins by 2027, focusing on La-Z-Boy and Joybird brands[92](index=92&type=chunk) - Strategic initiatives include expanding the La-Z-Boy brand reach through its Furniture Galleries and Comfort Studio networks (**12.1 million sq ft worldwide**), profitably growing the digital-first Joybird brand, and enhancing enterprise capabilities[92](index=92&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Consolidated sales decreased by **13%** in Q3 FY24 and **16%** in 9M FY24, reflecting a return to seasonal trends and a challenging consumer environment, exacerbated by winter weather. Operating margin declined due to lower sales volume, partially offset by improved gross margin from lower input costs and favorable product mix, particularly in Joybird [Consolidated Performance](index=27&type=section&id=Consolidated%20Performance) Analyzes overall financial performance, including sales, operating income, and margins Consolidated Sales and Operating Income (Unaudited, amounts in thousands, except percentages) | Metric | Q3 FY24 | Q3 FY23 | % Change (QoQ) | 9M FY24 | 9M FY23 | % Change (YoY) | | :--------------------------------------- | :------ | :------ | :------------- | :-------- | :-------- | :------------- | | Sales | $500,406 | $572,723 | (12.6)% | $1,493,492 | $1,788,146 | (16.5)% | | Operating income | 32,561 | 42,840 | (24.0)% | 100,699 | 157,366 | (36.0)% | | Operating margin | 6.5% | 7.5% | (100 bps) | 6.7% | 8.8% | (210 bps) | - Sales decreased due to a return to industry-wide seasonal trends relative to a historically high comparative period and a challenging consumer environment, compounded by winter weather events in January[101](index=101&type=chunk) - Gross margin increased by **150 basis points** (Q3) and **300 basis points** (9M) due to lower input costs and a favorable product mix in Joybird, partially offset by plant inefficiencies from winter weather and supply chain optimization costs[103](index=103&type=chunk)[104](index=104&type=chunk) [Retail Segment Performance](index=28&type=section&id=Retail%20Segment%20Performance) Details financial performance of company-owned retail stores, including sales and operating income Retail Segment Sales and Operating Income (Unaudited, amounts in thousands, except percentages) | Metric | Q3 FY24 | Q3 FY23 | % Change (QoQ) | 9M FY24 | 9M FY23 | % Change (YoY) | | :--------------------------------------- | :------ | :------ | :------------- | :-------- | :-------- | :------------- | | Sales | $204,696 | $251,157 | (18.5)% | $627,248 | $739,330 | (15.2)% | | Operating income | 22,313 | 44,203 | (49.5)% | 79,512 | 123,855 | (35.8)% | | Operating margin | 10.9% | 17.6% | (670 bps) | 12.7% | 16.8% | (410 bps) | - Retail sales decreased primarily due to a decline in delivered same-store sales, adverse comparison to prior year's COVID-related backlog delivery, and negative impact from winter weather events[106](index=106&type=chunk) - Written same-store sales were down **8%** in Q3 FY24 and **2%** in 9M FY24[107](index=107&type=chunk) - Retail gross margin increased by **110 basis points** (Q3) and **120 basis points** (9M) due to prior period pricing actions and favorable product mix, but SG&A as a percentage of sales increased due to lower delivered sales relative to fixed costs[110](index=110&type=chunk)[111](index=111&type=chunk) [Wholesale Segment Performance](index=29&type=section&id=Wholesale%20Segment%20Performance) Analyzes financial performance of the wholesale segment, covering sales and operating income Wholesale Segment Sales and Operating Income (Unaudited, amounts in thousands, except percentages) | Metric | Q3 FY24 | Q3 FY23 | % Change (QoQ) | 9M FY24 | 9M FY23 | % Change (YoY) | | :--------------------------------------- | :------------------ | :------------------ | :------------- | :-------------------------- | :-------------------------- | :------------- | | Total Sales | $356,375 | $407,603 | (12.6)% | $1,054,817 | $1,295,652 | (18.6)% | | Operating income | 22,711 | 16,940 | 34.1% | 67,664 | 81,558 | (17.0)% | | Operating margin | 6.4% | 4.2% | 220 bps | 6.4% | 6.3% | 10 bps | - Wholesale sales decreased due to a decline in delivered unit volume as backlog returned to pre-pandemic levels, typical seasonality, winter weather impacts, and selective pricing/promotional actions[113](index=113&type=chunk) - Wholesale gross margin increased by **170 basis points** (Q3) and **300 basis points** (9M) driven by lower input costs (**490 bps Q3, 440 bps 9M**) and favorable product mix (**50 bps 9M**), partially offset by plant inefficiencies and pricing actions[115](index=115&type=chunk) - SG&A expense as a percentage of sales decreased **50 basis points** in Q3 but increased **290 basis points** in 9M, impacted by reduced fixed cost leverage and higher marketing expense for the 'Long Live the Lazy' campaign[115](index=115&type=chunk)[116](index=116&type=chunk) [Corporate and Other Performance](index=30&type=section&id=Corporate%20and%20Other%20Performance) Reviews financial performance of Corporate and Other segment, including Joybird and shared costs Corporate and Other Sales and Operating Loss (Unaudited, amounts in thousands, except percentages) | Metric | Q3 FY24 | Q3 FY23 | % Change (QoQ) | 9M FY24 | 9M FY23 | % Change (YoY) | | :--------------------------------------- | :------ | :------ | :------------- | :-------- | :-------- | :------------- | | Sales | $38,132 | $33,510 | 13.8% | $114,425 | $125,877 | (9.1)% | | Operating loss | (12,463) | (18,303) | 31.9% | (46,477) | (48,047) | 3.3% | - Corporate and Other sales increased in Q3 FY24, primarily driven by Joybird sales (**$34.0 million**, up **$5.2 million**), but decreased for 9M FY24 due to demand challenges[118](index=118&type=chunk) - Operating loss decreased in both Q3 and 9M FY24, primarily due to improved Joybird operating performance, partially offset by unfavorable intercompany inventory profit elimination adjustments[120](index=120&type=chunk) [Non-Operating Income (Expense)](index=30&type=section&id=Non-Operating%20Income%20(Expense)) Discusses income and expenses not directly related to core operations, such as interest income - Interest income was **$2.1 million** higher in Q3 FY24 and **$7.6 million** higher in 9M FY24 compared to prior year, driven by higher interest rates on increased cash balances[121](index=121&type=chunk) [Income Taxes](index=30&type=section&id=Income%20Taxes) Provides an overview of the company's effective tax rates and significant tax adjustments Effective Tax Rates | Period | Effective Tax Rate (FY24) | Effective Tax Rate (FY23) | | :--------------------------------------- | :------------------------ | :------------------------ | | Third Quarter | 20.2% | 27.7% | | Nine Months Ended | 24.5% | 26.6% | - The reduced effective tax rate in Q3 FY24 was primarily due to favorable return to provision adjustments from the prior year. Absent these discrete items, the effective tax rate would have been **25.6%** for Q3 FY24[122](index=122&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity sources include cash, investments, and cash from operations, deemed adequate for short-term and long-term needs. Net cash provided by operating activities decreased, while net cash used for investing activities decreased due to lower capital expenditures and higher asset sale proceeds. Net cash used for financing activities increased significantly due to higher share repurchases [Overview](index=30&type=section&id=Overview) Summarizes liquidity sources, including cash, investments, and credit facilities - Sources of liquidity include cash and cash equivalents (**$333.2 million** at 1/27/2024), short-term and long-term investments, cash from operations, and a **$200 million** unsecured revolving credit facility (no outstanding borrowings)[123](index=123&type=chunk)[124](index=124&type=chunk)[127](index=127&type=chunk) Main Components of Cash Flows (Unaudited, amounts in thousands) | Metric | Nine Months Ended 1/27/2024 | Nine Months Ended 1/28/2023 | | :--------------------------------------- | :-------------------------- | :-------------------------- | | Net cash provided by operating activities | $105,354 | $127,052 | | Net cash used for investing activities | (54,029) | (57,965) | | Net cash used for financing activities | (64,476) | (33,894) | | Change in cash, cash equivalents and restricted cash | $(13,499) | $35,189 | [Operating Activities](index=32&type=section&id=Operating%20Activities) Details cash flows generated or used by the company's primary business operations - Net cash provided by operating activities decreased by **$21.7 million** to **$105.4 million** for 9M FY24, mainly due to lower net income and a smaller reduction in receivables, partially offset by a smaller reduction in customer deposits[126](index=126&type=chunk) [Investing Activities](index=32&type=section&id=Investing%20Activities) Outlines cash flows related to acquisition and disposal of long-term assets and investments - Net cash used for investing activities decreased by **$3.9 million** to **$54.0 million** for 9M FY24, primarily due to lower capital expenditures (**$38.0 million** vs. **$57.4 million**) and higher proceeds from asset sales, partially offset by increased spend on acquisitions (**$26.3 million**)[127](index=127&type=chunk)[129](index=129&type=chunk) - Capital expenditures for FY24 are expected to be in the range of **$50 to $60 million**[129](index=129&type=chunk) [Financing Activities](index=32&type=section&id=Financing%20Activities) Describes cash flows from debt, equity transactions, share repurchases, and dividend payments - Net cash used for financing activities increased by **$30.6 million** to **$64.5 million** for 9M FY24, primarily due to higher share repurchases (**$40.0 million** for **1.3 million shares**) and dividends paid (**$24.2 million**)[129](index=129&type=chunk)[135](index=135&type=chunk) - As of January 27, 2024, **6.0 million shares** remained available for repurchase under board authorization[129](index=129&type=chunk) [Exchange Rate Changes](index=34&type=section&id=Exchange%20Rate%20Changes) Explains the impact of foreign currency exchange rate fluctuations on cash balances - Exchange rate changes resulted in a **$0.3 million** decrease in cash, cash equivalents, and restricted cash for 9M FY24, impacting balances in Canada, Thailand, and the United Kingdom[131](index=131&type=chunk) [Critical Accounting Policies](index=34&type=section&id=Critical%20Accounting%20Policies) There were no material changes to the company's critical accounting policies or estimates during the nine months ended January 27, 2024, as disclosed in the Annual Report on Form 10-K for fiscal year ended April 29, 2023 - No material changes to critical accounting policies or estimates during the nine months ended January 27, 2024[133](index=133&type=chunk) [Recent Accounting Pronouncements](index=34&type=section&id=Recent%20Accounting%20Pronouncements) Information regarding recently adopted and other new accounting standards is discussed in Note 1, Basis of Presentation, to the consolidated financial statements - Refer to Note 1, Basis of Presentation, for discussion of recently adopted and other new accounting standards[134](index=134&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There were no material changes to the information about market risk disclosures from the Annual Report on Form 10-K for the fiscal year ended April 29, 2023, during the first nine months of fiscal 2024 - No material changes to market risk disclosures during the first nine months of fiscal 2024[136](index=136&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of January 27, 2024. There were no material changes in internal control over financial reporting during the third quarter of fiscal 2024 - Disclosure controls and procedures were effective as of January 27, 2024[137](index=137&type=chunk) - No material changes in internal control over financial reporting occurred during the third quarter of fiscal 2024[138](index=138&type=chunk) [PART II - OTHER INFORMATION](index=36&type=section&id=PART%20II%20Other%20Information) Provides additional disclosures not covered in financial statements, including risk factors and equity matters [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors during the first nine months of fiscal 2024, as previously disclosed in the Annual Report on Form 10-K for the fiscal year ended April 29, 2023 - No material changes to risk factors during the first nine months of fiscal 2024[140](index=140&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **0.6 million shares** of common stock for **$20.0 million** during the third quarter of fiscal 2024 under a Rule 10b5-1 plan and discretionary purchases. As of January 27, 2024, **6.0 million shares** remained available for repurchase under the board authorization - The company repurchased **0.6 million shares** for **$20.0 million** in Q3 FY24[141](index=141&type=chunk) - As of January 27, 2024, **6.0 million shares** remained available for repurchase under the board authorization[141](index=141&type=chunk) Company Stock Repurchases (Unaudited, amounts in thousands, except per share data) | Period | Total shares repurchased (1) | Average price paid per share | Total number of shares repurchased as part of publicly announced plan (2) | Maximum number of shares that may yet be repurchased under the plan | | :--------------------------------------- | :--------------------------- | :--------------------------- | :---------------------------------------------------------------------- | :------------------------------------------------------------------ | | Fiscal November (Oct 29 – Dec 2, 2023) | 125 | $30.89 | 125 | 6,453 | | Fiscal December (Dec 3 – Dec 30, 2023) | 356 | $36.72 | 356 | 6,097 | | Fiscal January (Dec 31 – Jan 27, 2024) | 88 | $35.82 | 86 | 6,011 | | Total (Fiscal Third Quarter of 2024) | 569 | | 567 | 6,011 | [Item 5. Other Information](index=36&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated a Rule 10b5-1 trading plan or a non-Rule 10b5-1 trading arrangement during the quarter ended January 27, 2024 - No directors or officers adopted or terminated Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements during Q3 FY24[144](index=144&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Form 10-Q, including certifications from the CEO and CFO, XBRL instance documents, and the cover page formatted in Inline XBRL - Exhibits include CEO and CFO certifications (31.1, 31.2, 32) and various Inline XBRL documents (101.INS, 101.SCH, 101.CAL, 101.LAB, 101.PRE, 101.DEF, 104)[145](index=145&type=chunk)

La-Z-Boy is aiming to increase its store count by around 14%, while also increasing the number of company-owned stores, which would improve its profit margins. SOPA Images/LightRocket via Getty ImagesThe most recent addition to my portfolio surprised me a bit when I dug into it, because when it popped up on my value stock screener, I didn't expect La-Z-Boy Incorporated (NYSE:LZB) to be a company with a long-term plan for future growth. I expected it to be a value stock at a good price, with a conservative ...

MONROE, Mich., Feb. 09, 2024 (GLOBE NEWSWIRE) -- La-Z-Boy Incorporated (NYSE:LZB), a global leader in the manufacture and retail of residential furniture, today released its fiscal year 2023 Sustainability Report: Delivering Sustainable Comfort. The report provides a comprehensive overview of the Company's commitments, objectives, and the steps taken to achieve them. It also outlines its sustainability efforts to improve the Company's environmental footprint, and its dedication to social responsibility and ...

MONROE, Mich., Feb. 06, 2024 (GLOBE NEWSWIRE) -- La-Z-Boy Incorporated (NYSE:LZB) will report its third quarter fiscal 2024 results for the period ended January 27, 2024 after the close of trading on the New York Stock Exchange on Tuesday, February 20, 2024, and will hold its quarterly investor conference call at 8:30 a.m. Eastern Time the following day, Wednesday, February 21, 2024. The dial-in phone number for the live conference call will be (888) 506-0062 for persons calling from within the U.S. or Cana ...

MONROE, Mich., Feb. 05, 2024 (GLOBE NEWSWIRE) -- La-Z-Boy Incorporated (NYSE:LZB), a global leader in the manufacture and retail of residential furniture, announced its investment and ongoing support of key industry furniture markets. La-Z-Boy Incorporated is formally extending the lease for its portfolio of showrooms at High Point Market in Furniture Plaza, High Point, NC and Las Vegas Market, B555 at World Market Center Las Vegas, NV. La-Z-Boy is also committing to major renovations of its showrooms in Hi ...

MONROE, Mich., Jan. 03, 2024 (GLOBE NEWSWIRE) -- La-Z-Boy Incorporated (NYSE: LZB), a global leader in the manufacture and retail of residential furniture, today announced that Melinda D. Whittington, President and Chief Executive Officer, and Bob Lucian, Senior VP and Chief Financial Officer, will present at the 2024 ICR Conference. The event will be held on January 8, 2024, at 9:30 a.m. Eastern Time. The presentation will be webcast live and archived at https://lazboy.gcs-web.com/. Investor Relations Cont ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ COMMISSION FILE NUMBER 1-9656 LA-Z-BOY INCORPORATED (Exact name of registrant as specified in its charter) | Michigan | | | 38-0751137 | | --- | --- | --- | --- | | (State or other jurisdiction of incorporation or organization) | | | (I.R.S. Employer Identificati ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 29, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ COMMISSION FILE NUMBER 1-9656 LA-Z-BOY INCORPORATED (Exact name of registrant as specified in its charter) | Michigan | | 38 ...

La-Z-Boy Incorporated (NYSE:LZB) Q4 2023 Earnings Conference Call June 21, 2023 8:30 AM ET Company Participants Bob Lucian - Chief Financial Officer Mark Becks - Director, Investor Relations and Corporate Development Melinda Whittington - President and Chief Executive Officer Conference Call Participants Anthony Lebiedzinski - Sidoti and Company Zachary Donnelly - KeyBanc Operator Greetings. Welcome to the La-Z-Boy Fiscal 2023 Fourth Quarter Conference Call. At this time, all participants are in a listen-on ...