La-Z-Boy Incorporated Reports Strong Third Quarter Results Led By Double-Digit Retail Sales Growth; Drives Significant Progress On Strategic Initiatives

Core Insights - La-Z-Boy Incorporated reported a 4% increase in sales for the third quarter of Fiscal 2026, totaling $542 million, driven by growth in Retail and Wholesale segments, despite a decline in Joybird sales [2][11] - The company achieved a GAAP operating margin of 5.5% and an adjusted operating margin of 6.1% for the quarter, reflecting investments in distribution and home delivery transformation [6][11] - Diluted earnings per share (EPS) were $0.52 on a GAAP basis and $0.61 on an adjusted basis, both lower than the previous year's figures [6][11] Financial Performance - Retail segment written sales increased by 11% year-over-year, while same-store sales decreased by 4%, with January showing the strongest trends despite adverse weather affecting traffic [3][17] - The Wholesale segment delivered sales increased by 1%, marking the seventh consecutive quarter of growth in the North America La-Z-Boy wholesale business [5][11] - Operating cash flow for the quarter was $89 million, a 57% increase compared to the same period last year, with free cash flow reaching $119 million [6][17] Strategic Initiatives - The company has expanded its retail presence by adding 29 net company-owned stores over the past year, with the current proportion of company-owned stores at approximately 60% of the total network [4][5] - La-Z-Boy has been recognized by TIME magazine as one of America's Most Iconic Companies for 2026, highlighting its cultural relevance and brand strength [5] - The company is making progress on strategic initiatives focused on branded, customized upholstered furniture, leveraging its vertically integrated model with around 90% of products produced in the U.S. [5][11] Outlook - For the fourth quarter, La-Z-Boy expects sales to be in the range of $560-580 million and an adjusted operating margin between 7.5-9.0%, reflecting a cautious view on the macroeconomic environment [6][7] - The company has formally announced the planned closure of its U.K. manufacturing facility, with production set to cease by the end of the fiscal year [6][11]