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]

Financial Data and Key Metrics Changes - Consolidated delivered sales for Q4 reached $571 million, a 3% increase year-over-year [6][21] - For the fiscal year, consolidated delivered sales totaled $2.1 billion, also growing 3% compared to the previous year [8][25] - Operating cash flow for the year was $187 million, up 18% from the prior year [8][28] - The company maintained a strong balance sheet with $328 million in cash and no external debt [8][27] Business Line Data and Key Metrics Changes - Retail segment sales grew 8% in Q4, driven by new stores and acquisitions [6][22] - For the fiscal year, retail segment sales increased by 5% [8][25] - Wholesale segment sales grew 2% in Q4, led by the North American business [7][23] - Joybird's written sales decreased by 21% in Q4, reflecting challenges in the online business [14][24] Market Data and Key Metrics Changes - Written same-store sales for the retail segment decreased by 5% year-over-year in Q4 [13] - Industry data showed mixed results, with some peers reporting flat to mid-teen declines in same-store sales [13] - The company noted that high mortgage rates and economic volatility negatively impacted consumer sentiment [13] Company Strategy and Development Direction - The company is focused on its Century Vision strategy, aiming for double-digit operating margins and sales growth at double the market rate [15][19] - Plans to expand the total network of La Z Boy Furniture Galleries to over 400 stores, with a focus on company-owned locations [16][17] - The company is investing in redesigning its distribution network to enhance efficiency and improve consumer delivery experiences [10][11] Management's Comments on Operating Environment and Future Outlook - Management expects continued global economic uncertainty to challenge consumers in the near term but remains confident in the business model [9][20] - The company anticipates a rebound in housing fundamentals, which could benefit the industry long-term [20] - Management highlighted the importance of agility in navigating external challenges and maintaining strong execution [12][33] Other Important Information - The company was recognized in Newsweek's list of America's most loved brands and most trustworthy companies for 2025 [33] - The company returned $113 million to shareholders through dividends and share repurchases, including a 10% dividend increase for the fourth consecutive year [8][28] Q&A Session Summary Question: Potential for wholesale segment margin expansion - Management indicated that achieving a 10% margin requires both internal improvements and a healthy industry environment [39][40] Question: Timing of the distribution redesign project - Management explained that the decision was driven by recent acquisitions and the need for efficiency in the growing business [42][43] Question: Recent written orders trends - Management noted that Memorial Day showed a solid start, contrasting with a challenging February [44][45] Question: Reasons for sales outperformance relative to guidance - Management attributed the outperformance to broad-based execution despite macroeconomic challenges [51][52] Question: Impact of tariffs and pricing strategy - Management discussed the nominal pricing actions taken and the agility in responding to tariff impacts [53][55] Question: Long-term growth for Joybird - Management remains optimistic about Joybird's growth potential while emphasizing prudent expansion [57][60] Question: La Z Boy's pricing strategy in the current environment - Management expressed confidence in their competitive positioning and the ability to manage pricing effectively [64][67] Question: Operating margin outlook for the fiscal year - Management stated that margin expansion is contingent on industry health and their ability to outperform [70][71]

Financial Data and Key Metrics Changes - Consolidated delivered sales for Q4 2025 were $571 million, growing 3% year-over-year [6][7] - For the fiscal year, consolidated delivered sales reached $2.1 billion, also growing 3% compared to the previous year [7][27] - Operating cash flow for the year was $187 million, up 18% from the prior year [7][30] - The company maintained a strong balance sheet with $328 million in cash and no external debt [7][30] - Adjusted diluted EPS for the year was $2.92, down from $2.98 in fiscal 2024 [27][29] Business Segment Data and Key Metrics Changes - Retail segment sales for Q4 increased 8% to $247 million, driven by new stores and acquisitions [24] - Wholesale segment sales grew 2% to $324 million in Q4, primarily from the North American business [25] - Joybird's delivered sales were $36 million, down 2% year-over-year, with a positive adjusted operating margin [26] Market Data and Key Metrics Changes - Written same-store sales for the retail segment decreased 5% year-over-year, influenced by high mortgage rates and economic volatility [13] - Industry data showed mixed results, with some peers reporting flat to mid-teen declines in same-store sales [13] - Joybird's written sales trends decreased 21% in the quarter, with stronger performance in physical stores compared to online [14][15] Company Strategy and Development Direction - The company is focused on its Century Vision strategy, aiming for double-digit growth and operating margins [16][22] - Plans to expand the La-Z-Boy Furniture Galleries network to over 400 stores, with a focus on company-owned locations [17][18] - The company is investing in its supply chain and distribution network to enhance efficiency and service levels [10][11][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model to outperform peers despite ongoing economic challenges [9][22] - The company anticipates continued macroeconomic volatility but expects to benefit from a rebound in the housing market in the long term [22][35] - Management highlighted the importance of agility in navigating external uncertainties and maintaining consumer engagement [12][22] Other Important Information - The company was recognized in Newsweek's list of America's most loved brands and most trustworthy companies for 2025 [35] - The company plans to open approximately 15 new company-owned and independent stores in fiscal 2026 [32][33] Q&A Session Summary Question: Can you provide details on the drivers for margin expansion in the wholesale segment? - Management indicated that half of the margin improvement is within their control through distribution redesign, while the other half depends on a healthy industry and housing market [40][42] Question: Why is the distribution redesign project being initiated now? - The timing is due to the increased scale of the business and the opportunity for efficiency improvements [44][45] Question: What has been observed in written orders recently? - Management noted that Memorial Day showed a solid start, contrasting with a challenging February [46][47] Question: What were the reasons for sales outperformance compared to guidance? - The outperformance was attributed to broad-based execution despite macroeconomic challenges [52][54] Question: Can you elaborate on the tariff expenses and pricing actions? - Management discussed nominal pricing actions taken to mitigate tariff impacts and emphasized the importance of consumer response [55][57] Question: What is the long-term outlook for Joybird stores? - Management remains optimistic about Joybird's growth potential and plans to open three to four new stores while optimizing the brand [59][62] Question: How does La-Z-Boy's pricing strategy compare to competitors? - Management believes La-Z-Boy is well-positioned due to its U.S.-based manufacturing and ability to offer personalized products at competitive prices [66][69]