La-Z-Boy(US:LZB)2025-11-18 21:19Financial Performance - Consolidated sales increased by $1.5 million, or 0.3%, in the second quarter of fiscal 2026 compared to the same period last year, while sales decreased by $1.9 million, or 0.2%, in the first six months[109]. - Operating income for the second quarter of fiscal 2026 was $36,179,000, a decrease of 6.7% from $38,772,000 in the same quarter of fiscal 2025[108]. - The operating margin decreased to 6.9% in the second quarter of fiscal 2026 from 7.4% in the same quarter of fiscal 2025[108]. - Gross margin decreased by 10 basis points in the second quarter of fiscal 2026 compared to the same period last year, driven by increased supply chain costs[112]. - SG&A expenses as a percentage of sales increased by 40 basis points in the second quarter of fiscal 2026 due to fixed cost deleverage in the Retail segment[112]. - Retail segment sales increased by $0.5 million, or 0.2%, in Q2 2026, and by $5.3 million, or 1.2%, in the first six months compared to the same periods last year[114]. - Wholesale segment sales rose by $5.5 million, or 2%, in Q2 2026, and by $7.6 million, or 1%, in the first six months compared to the same periods last year[118]. - Operating income for the Retail segment decreased by 14.6% in Q2 2026 and by 23.9% in the first six months compared to the same periods last year[114]. - Operating margin for the Retail segment fell by 190 basis points in Q2 2026 and by 290 basis points in the first six months compared to the same periods last year[116]. - Gross margin for the Wholesale segment increased by 100 basis points in Q2 2026 and by 40 basis points in the first six months compared to the same periods last year[119]. - Corporate and Other sales decreased by $3.4 million, or 8.1%, in Q2 2026, and by $10.9 million, or 13.5%, in the first six months compared to the same periods last year[122]. Cash Flow and Investments - Net cash provided by operating activities was $86.3 million in the first six months of fiscal 2026, an increase of $18.1 million compared to the same period last year[132]. - Capital expenditures in the first six months of fiscal 2026 were $38.9 million, primarily related to new stores and manufacturing investments[134]. - Cash and cash equivalents increased to $338.5 million as of October 25, 2025, compared to $328.4 million at April 26, 2025[130]. - Cash paid to shareholders in quarterly dividends was $18.1 million, with expectations for regular quarterly dividends to continue[143]. - Cash used to repurchase 0.3 million shares of company stock amounted to $13.3 million, with 3.4 million shares remaining available for repurchase as of October 25, 2025[143]. - Cash paid for tax withholding on stock issued as part of employee benefit plans was $4.9 million, net of proceeds from exercised stock options[143]. Strategic Initiatives - The company aims to grow sales and market share through its Century Vision strategic plan, targeting its centennial year in 2027[100]. - The company plans to expand its retail store network and upgrade existing locations to new concept designs to drive growth in the Retail segment[106]. - The La-Z-Boy Stores retail network consists of 370 stores, over 500 La-Z-Boy Comfort Studio locations, and over 800 La-Z-Boy branded space locations[102]. - Joybird operates 14 small-format stores and focuses on a digital-first consumer experience to drive profitable growth[103]. - The company has approximately 7.7 million square feet of proprietary floor space dedicated to selling La-Z-Boy branded products in North America[102]. Tax and Accounting - The effective tax rate was 26.7% for Q2 2026 and 26.1% for the first six months, compared to 26.3% and 25.9% for the same periods last year[128]. - There were no material changes to critical accounting policies during the six months ended October 25, 2025[144]. - Recent accounting standards and their impacts were discussed in the Quarterly Report on Form 10-Q[145]. - No material changes in market risk disclosures were noted during the first six months of fiscal 2026[146].