lazboy fintabs, 6-17-2024

La-Z-Boy expects modest growth after Q4 results outpace expectations

MONROE, Mich. – Sales at La-Z-Boy took a slight dip in the fourth quarter but shot up smartly compared with the pre-pandemic period in 2019.

For the quarter ended April 27, sales hit $554 million, down 1% against a year-ago period that had gotten a boost from pandemic backlog deliveries. Compared with the fourth quarter of fiscal year 2019, sales jumped 22%.

At company-owned La-Z-Boy Furniture Gallery Stores, sales nudged up 1% as the company added three new locations, two of them independent La-Z-Boy Furniture Galleries stores added by acquisition. The expanded revenue base more than offset lower same-store sales.

Delivered sales in the Retail Segment fell 6% to $288 million, again, facing comparisons with the prior-year’s delivery of backlog orders. Compared with the fiscal 2019 quarter, delivered sales increased 50%.

In the Wholesale Segment, sales were relatively flat, down 1% to $392 million.

Joybird written sales were also down 1%, coming in at $37 million as e-commerce sales trends stabilized. Profitability improved thanks to lower freight and warranty expenses as well as a better-balanced product mix and a higher return on advertising spending.

 

Melinda D. Whittington, president and CEO of La-Z-Boy Inc., praised the strong finish to the fiscal year.

“The industry continues to grapple with higher for longer interest rates and housing turnover near 30-year lows negatively impacting store traffic. However, our execution is the strongest it has ever been, including conversion rates at all-time highs and average ticket and design sales trending up for the year,” she said.

The company expects industry fundamentals to remain volatile in the near term, she said. La-Z-Boy’s quarter is off to a good start, she added, “and we are encouraged by our solid Memorial Day results as we believe our assortment and best-in-class motion offerings are resonating with consumers in the marketplace.”

Consolidated GAAP operating margin was 9.1% vs. 9.6% during the quarter as lower gross margin from segment mix was partially offset by lower SG&A spend. GAAP diluted EPS increased to 91 cents from 79 cents and Non-GAAP diluted EPS decreased to 95 cents from 99 cents.

For the full fiscal year, sales dropped 13% to $2.47 million. GAAP operating income tumbled 29% to approximately $151 million.

La-Z-Boy finished the year with $341 million in cash and no external debt.

Looking ahead, La-Z- Boy expects the industry will be down about 5% for the year, with potential improved arriving early in the calendar year of 2025 “when expected interest rate cuts filter through the economy and begin to positively impact housing activity,” said Bob Lucian, CFO.

La-Z-Boy is projected to outperform the industry, generating modest sales growth year-over-year in the range of $475 million to $495 million. Non-GAAP operating margin is expected to be in the range of 6% to 7%.

See also:

  • Lucky number: 7 retailers win Comfort Studio awards from La-Z-Boy
  • ‘Lazy’ campaign adding plenty of perk to La-Z-Boy’s retail business

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