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]

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]