Company Overview - La-Z-Boy Incorporated is a global leader in the retail and manufacture of residential furniture, known for its iconic recliner invented in 1927 [2] - The company operates as a vertically integrated furniture retailer and manufacturer, emphasizing quality and consumer compassion [2] Retail Segment - The Retail segment includes nearly 210 company-owned La-Z-Boy Furniture Galleries® stores, part of a broader network of approximately 370 stores nationwide [3] - Joybird®, an omni-channel retailer and manufacturer of modern upholstered furniture, operates 14 stores in the U.S., with one new store opened in fiscal 2026 Q2 [3] Wholesale Segment - In the Wholesale segment, La-Z-Boy manufactures custom furniture for Furniture Galleries® and various retail channels [3] - England Furniture Co. offers custom upholstered furniture, while casegoods brands Kincaid®, American Drew®, and Hammary® provide diverse home furnishings [3] Upcoming Events - La-Z-Boy will participate in a fireside chat at the Goldman Sachs 32nd Annual Global Retailing Conference in New York, scheduled for September 4, 2025, at 1:10 p.m. ET [1]

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]

Financial Data and Key Metrics Changes - Total net sales for Q1 2026 were $138.4 million, reflecting a year-over-year increase of 4.3% despite a 5% decline in the overall category [5][31] - Adjusted EBITDA loss improved by double-digit percentages year-over-year, with net loss for the quarter at $10.8 million, or negative $0.73 per share, compared to a net loss of $13 million, or negative $0.83 per share, in the prior year [5][35] - SG&A expense as a percentage of net sales decreased to 48.5% from 51.6% in the prior year, driven by lower professional fees and higher net sales [33] Business Line Data and Key Metrics Changes - Showroom net sales increased by $14.9 million, or 18.2%, to $96.5 million, driven by a 2.8% increase in omni-channel comparable net sales and the addition of 21 new showrooms [31] - Internet net sales decreased by $3.3 million, or 8.9%, to $33.3 million, while other net sales, including pop-up shops, decreased by $5.8 million, or 40.5% [32] - Sactional net sales increased by 4.5%, while SAC net sales increased by 6.4%, and other net sales, including decorative pillows and accessories, decreased by 17.1% [32] Market Data and Key Metrics Changes - The overall market category is estimated to have declined by 5% for the comparable period, with the company gaining market share despite these headwinds [5][31] - The promotional environment remains aggressive, with competitors offering discounts around 40% to 45%, impacting gross margins [48] Company Strategy and Development Direction - The company is focused on leveraging its innovative product offerings and strong customer relationships to drive growth, even in a challenging category [14] - The launch of the EverCouch product platform is expected to significantly expand the company's total addressable market, with initial positive feedback from customers [9][10] - The company plans to enhance its marketing efforts and expand its showroom presence to support the new product launches [10][24] Management's Comments on Operating Environment and Future Outlook - Management noted that while the category trends are currently negative, they remain optimistic about future growth driven by new product launches and marketing strategies [38] - The company is actively working to mitigate tariff impacts and believes it can manage these within existing guidance [14][39] - Management expressed confidence in the long-term growth potential of the company, particularly as housing turnover and the replacement cycle for comfort seating are expected to improve [42] Other Important Information - The company ended its partnership with Best Buy, estimating a nonrecurring charge of approximately $2 million in Q2, while planning to expand its relationship with Costco [25][40] - The company has made significant progress in diversifying its manufacturing away from China, aiming for a more sustainable supply chain [66] Q&A Session Summary Question: Can you discuss the promotional environment and its impact on gross margins? - Management noted that discount levels remain high, with competitors offering significant promotions, but they are focusing on personalized promotions to drive showroom traffic and conversions [48][49] Question: What are the expectations for EverCouch sales and customer feedback? - Management indicated that it is too early to provide specific sales figures, but initial feedback has been positive, and internal goals are being exceeded [54][56] Question: Can you elaborate on the decision to exit the Best Buy partnership? - Management expressed excitement about new opportunities and emphasized the importance of expanding the Costco relationship, while acknowledging the benefits gained from the Best Buy partnership [60][62] Question: How are tariffs influencing manufacturing decisions? - Management stated that they are on a path to exit manufacturing in China entirely, focusing on producing closer to consumers for sustainability reasons [66][68] Question: How does the guidance account for new product performance? - Management clarified that the guidance does not overly rely on new products, as they can achieve targets even if core products remain flat [72][74] Question: How are price adjustments being considered in light of tariffs and promotions? - Management is continuously assessing pricing strategies, noting that their strong brand allows for surgical price increases without compromising competitive positioning [75][79]

Core Viewpoint - La-Z-Boy Incorporated is set to report its Fiscal 2025 Fourth Quarter results on June 17, 2025, with a subsequent investor conference call scheduled for June 18, 2025 [1] Company Overview - La-Z-Boy Incorporated is a vertically integrated furniture retailer and manufacturer, known for its iconic recliner invented in 1927, and is committed to quality and consumer compassion [4] - The company operates nearly 200 company-owned La-Z-Boy Furniture Galleries stores and is part of a broader network of over 360 stores, including an e-commerce platform [5] Conference Call Details - The conference call will be webcast live, with slides available at the company's investor relations website [2] - Dial-in numbers for the live conference call are provided for both U.S./Canada and international callers, along with a participant access code [2] - An archive of the conference call will be available online for one year, with a telephone replay accessible for two weeks [3]