Financial Data and Key Metrics Changes - Total delivered sales for the second quarter were $522 million, slightly up from the prior year [4][19] - GAAP operating margin was 6.9%, and adjusted operating margin was 7.1% [5][20] - Operating cash flow for the quarter was $50 million, triple the amount from the previous year [5][24] - Diluted earnings per share were $0.70 on a GAAP basis, and adjusted diluted EPS was $0.71, flat compared to last year [20] Business Line Data and Key Metrics Changes - Retail segment delivered sales increased slightly to $222 million, with adjusted operating margin at 10.7%, down from 12.6% due to fixed cost deleverage [21] - Wholesale segment delivered sales grew 2% to $369 million, with adjusted operating margin improving to 8.1% from 6.8% [22] - Joybird's delivered sales were $35 million, down 10% year-over-year, with an increased operating loss [22] Market Data and Key Metrics Changes - Written same-store sales decreased 2% for the quarter but showed sequential improvement over the last two quarters [7] - Joybird's total written sales increased by 1% compared to the previous year, indicating improvement in retail store performance [7] Company Strategy and Development Direction - The company is focusing on its core vertically integrated North American upholstery business and has announced the exit of non-core businesses [8][16] - A significant acquisition of a 15-store network in the Southeast U.S. is expected to add approximately $80 million in annual retail sales [9] - The company aims to expand its store network to over 400 stores, with a focus on company-owned locations [11] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer trends remain challenging, but they are agile in their execution [7][17] - The company expects fiscal third-quarter sales to range from $525 million to $545 million, reflecting a growth of 1-4% year-over-year [27] - Management expressed confidence in navigating the current environment while positioning for long-term growth [17][30] Other Important Information - The company announced a 10% dividend increase, marking the fifth consecutive year of double-digit increases [5][25] - The distribution and home delivery transformation project is expected to improve efficiency and reduce costs in the long term [15][28] Q&A Session Summary Question: Differences in geographic sales dispersion - Management noted no dramatic differences, but Canada remains more challenged due to trade tariffs [33] Question: Pricing actions and unit volumes - Management indicated nominal pricing actions were taken to offset tariff impacts, with flat volume year-over-year in the North America wholesale business [35][36] Question: Friction costs related to portfolio and supply chain optimization - Management explained that friction costs are expected in the short term due to the distribution transformation project, with improvements anticipated in the back half of the fiscal year [37][38] Question: Expansion into wholesale partners - Management emphasized the importance of strategic partnerships and compatibility with existing retail growth [40] Question: Impact of the acquisition and non-core business exits - Management confirmed that the acquisition would add $40 million in net sales, while exiting non-core businesses would result in a $70 million sales decrease [47][48] Question: Inventory management - Management attributed reduced inventories to improved supply chain efficiency and tighter capital management [51] Question: Integration of the acquisition and future growth - Management plans to continue expanding the store network and investing in remodels to enhance brand representation [55][56] Question: Case goods offerings post-exit of non-core businesses - Management confirmed the importance of case goods in enhancing the upholstery experience while focusing on efficient partnerships for sourcing [60]

Financial Data and Key Metrics Changes - Total delivered sales for the second quarter were $522 million, a slight increase from the prior year [4] - GAAP operating margin was 6.9%, while adjusted operating margin was 7.1% [5][17] - Strong operating cash flow of $50 million for the quarter, tripling last year's comparable period [5][22] - Diluted earnings per share totaled $0.70 on a GAAP basis, and adjusted diluted EPS was $0.71, flat compared to last year [18] Business Line Data and Key Metrics Changes - Retail segment delivered sales increased slightly to $222 million, with adjusted operating margin decreasing to 10.7% from 12.6% due to fixed cost deleverage [18] - Wholesale segment delivered sales grew 2% to $369 million, with adjusted operating margin improving to 8.1% from 6.8% [19] - Joybird's delivered sales were $35 million, down 10%, with an increased operating loss compared to the prior year [19][20] Market Data and Key Metrics Changes - Written same-store sales decreased 2% for the quarter but showed sequential improvement over the last two quarters [6] - Total written sales for Joybird increased by 1% compared to the previous year, indicating improvement in retail store performance [6] Company Strategy and Development Direction - The company is focusing on its core vertically integrated North American upholstery business and has announced the exit of non-core businesses [7][14] - A significant acquisition of a 15-store network in the Southeast U.S. is expected to add approximately $80 million in annual retail sales [8] - The company aims to expand its store network to over 400 stores, with a focus on company-owned locations [10][43] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer trends remain challenging, but they are committed to navigating the current environment while positioning for long-term growth [6][16] - The company expects fiscal third-quarter sales to be in the range of $525-$545 million, reflecting a growth of 1-4% year-over-year [25] - Management expressed confidence in the company's financial strength and long-term growth prospects, highlighted by a 10% dividend increase [23][24] Other Important Information - The company is undergoing a multi-year project to transform its distribution network, which is expected to improve efficiency and reduce costs [12][13] - The company has a strong balance sheet with $339 million in cash and no externally funded debt [22] Q&A Session Summary Question: Geographic sales dispersion and market consistency - Management noted no significant differences in geographic sales dispersion, with Canada facing more challenges due to trade tariffs [30] Question: Pricing actions and unit volumes - Management confirmed nominal pricing actions were taken to offset trade policy changes, with volume remaining flat year-over-year in the North America wholesale business [31][32] Question: Friction costs related to portfolio and supply chain optimization - Management explained that friction costs are associated with the ongoing distribution transformation project, which is expected to yield long-term efficiency gains [33] Question: Expansion into new wholesale partners - Management emphasized the importance of strategic partnerships that align with the brand and enhance consumer reach, noting recent expansions with Living Spaces and Costco [35] Question: Impact of non-core business exits on sales - Management confirmed that the exit of non-core businesses would result in a net sales decrease of approximately $30 million, but with expected margin improvements [38][39] Question: Inventory management and efficiency gains - Management attributed the decrease in inventory to improved supply chain management and efficiency [41] Question: Integration of the 15-store acquisition - Management expressed satisfaction with the integration process and plans for continued expansion of company-owned stores [42][45] Question: Case goods offerings and partnerships - Management confirmed the importance of case goods in enhancing the upholstery experience while recognizing the need for efficient sourcing strategies [48]

Core Insights - La-Z-Boy Incorporated reported second quarter sales of $522 million, a slight increase from the previous year, driven by growth in Retail and Wholesale segments, despite a decline in Joybird sales [3][11] - The company achieved a GAAP operating margin of 6.9% and an adjusted operating margin of 7.1% for the quarter, reflecting challenges in same-store sales and investments in new stores [5][11] - Diluted earnings per share (EPS) were $0.70 on a GAAP basis and $0.71 on an adjusted basis, showing a slight decrease compared to the prior year [11][38] Fiscal 2026 Second Quarter Highlights - Total sales for the quarter were $522 million, up 0.3% from $521 million in the same period last year [7] - GAAP operating income decreased by 7% to $36.2 million, while adjusted operating income fell by 5% to $37.1 million [7][11] - The company generated $50 million in operating cash flow, tripling the amount from the previous year [6][11] Retail Segment Performance - Written sales for the Retail segment increased by 4% year-over-year, while same-store sales decreased by 2%, indicating a sequential improvement over the last two quarters [4][17] - Delivered sales for the Retail segment were $222 million, with an operating margin of 10.7%, down from 12.6% in the prior year [17][36] Wholesale Segment Performance - The Wholesale segment reported sales of $369 million, a 2% increase from the previous year, with an operating margin of 7.9%, up from 6.7% [12][36] - Joybird's written sales increased by 1%, but delivered sales decreased by 10% to $35 million due to lower volume [17][36] Strategic Initiatives - The company opened 15 new company-owned stores in the last 12 months and completed the acquisition of a 15-store network in the southeast U.S., expected to add approximately $80 million in annual Retail sales [5][6] - La-Z-Boy plans to exit non-core wholesale casegoods and upholstery businesses and proposed the closure of its U.K. manufacturing facility to enhance operational efficiency [5][6] Dividend and Shareholder Returns - The Board of Directors declared a quarterly cash dividend of $0.242 per share, marking a 10% increase and the fifth consecutive year of double-digit increases [14]

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]

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 Insights - La-Z-Boy Incorporated reported strong fourth quarter results for fiscal 2025, with sales of $571 million, a 3% increase compared to the prior year [3][6] - The company achieved an operating margin of 5.2% on a GAAP basis and 9.4% on an adjusted basis, with diluted earnings per share of $0.36 and $0.92 respectively [3][6] - The company returned $113 million to shareholders, marking an increase of over 30% from the previous year [3][6] Fiscal 2025 Fourth Quarter Highlights - Consolidated delivered sales reached $571 million, up 3% year-over-year [6] - Retail segment sales increased by 8%, while wholesale segment sales grew by 2% [6][15] - The company-owned La-Z-Boy Furniture Galleries network expanded by six stores, representing 55% of the total network [6][15] Retail Segment Performance - Written sales for the Retail segment grew by 3%, but same-store sales decreased by 5% due to challenges in the housing market [4][15] - Delivered sales in the Retail segment increased by 8% to $247 million, driven by new and acquired stores [15][23] - The operating margin for the Retail segment was 13.1%, down 110 basis points compared to the prior year [15] Wholesale Segment Performance - Sales in the Wholesale segment increased by 2% to $402 million, primarily due to growth in the core North America La-Z-Boy wholesale business [15][44] - The operating margin for the Wholesale segment decreased to 2.5% from 8.1% in the previous year [15] Financial Overview - The company generated $62 million in operating cash flow for the fourth quarter, a 17% increase year-over-year [6][23] - For the full fiscal year, operating cash flow was $187 million, up 18% from the prior year [6][23] - The company ended the quarter with $328 million in cash and no external debt [23] Future Outlook - The company anticipates continued volatility in the industry due to economic uncertainty but expects to outperform peers driven by growth in the Retail segment and core wholesale business [5][8] - For the first quarter of fiscal 2026, sales are projected to be between $490 million and $510 million, reflecting modest growth in a challenging consumer environment [8]