LZB - NYSE
La-Z-Boy Incorporated
LZB·NYSE
$36.27
-0.44%Consumer CyclicalFurnishings, Fixtures & Appliances
La-Z-Boy Incorporated manufactures, markets, imports, exports, distributes, and retails upholstery furniture products, accessories, and casegoods furniture products in the United States, Canada, and internationally. It operates through Wholesale, Retail, Corporate and Other segments. The Wholesale segment manufactures and imports upholstered furniture, such as recliners and motion furniture, sofas, loveseats, chairs, sectionals, modulars, ottomans, and sleeper sofas; and imports, distributes, and retails casegoods (wood) furniture, including occasional pieces, bedroom sets, dining room sets, and entertainment centers. This segment sells its products directly to La-Z-Boy Furniture Galleries stores, operators of La-Z-Boy Comfort Studio locations, England Custom Comfort Center locations, dealers, and other independent retailers. The company's Retail segment sells upholstered furniture, casegoods, and other accessories to the end consumer through its retail network. This segment operates a network of 161 company-owned La-Z-Boy Furniture Galleries stores. La-Z-Boy Incorporated also produces reclining chairs; and manufactures and distributes residential furniture. Its Corporate and Other segment sells the products through its website. The company was formerly known as La-Z-Boy Chair Company and changed its name to La-Z-Boy Incorporated in 1996. La-Z-Boy Incorporated was founded in 1927 and is based in Monroe, Michigan.
At a Glance
Live SnapshotMarket Cap$1.50B
EPS2.3900
P/E Ratio15.18
Earnings Date06/16/2026
Earnings Call Transcript
LZB • 2025 • Q4
Operator
Good morning, everyone. Welcome to the La-
Mark Alan Becks
Thank you, Jenny. Good morning, everyone, and thanks for joining us to discuss our fiscal 2025 fourth quarter. Joining me on today's call are Melinda Whittington, La-
Melinda D. Whittington
Thank you, Mark, and good morning, everyone. Yesterday, following the close of market, we reported our April-ended fourth quarter and fiscal year. We delivered strong results despite continued economic and industry volatility, driving growth and successfully executing on our Century Vision strategy. Highlights for the quarter included consolidated delivered sales of $571 million, growing 3% versus the prior year. Retail segment sales growing 8% led by new stores and acquisitions. During the quarter, we opened our 200th company-owned La-
Taylor E. Luebke
Thank you, Melinda, and good morning, everyone. As a reminder, we present our results on both a GAAP and adjusted basis formerly referred to as non-GAAP. We believe the adjusted presentation better reflects underlying operating trends and performance of the business. Adjusted results exclude items, which are detailed in our press release and in the tables in the appendix section of our conference call slides. On a consolidated basis, fiscal 2025 fourth quarter sales grew 3% to $571 million versus the prior year, primarily driven by acquisitions and new stores in the Retail segment and continued momentum in our core North America La-
Melinda D. Whittington
Thanks, Taylor. We delivered a strong quarter and fiscal year in a volatile environment, once again demonstrating our ability to adapt and deliver. While we expect the consumer will be challenged for the foreseeable future, we also expect to continue to outperform the industry and deliver long-term profitable growth while prudently investing in the business. Our strong brand and vertical integration that includes company-owned retail and an agile supply chain, along with our strong balance sheet, provides us the foundation for continued growth. Before I close, I'd like to note that during the fourth quarter, La-
Mark Alan Becks
Thank you, Melinda. We will begin the question-and-answer period now. Jenny, please review the instructions for getting into the queue to ask questions.
Operator
[Operator Instructions] Your first question is coming from Bobby Griffin of Raymond James.
Robert Kenneth Griffin
I guess, first, a lot of new stuff to unpack on this call, so appreciate all the details. Maybe when we start with the Wholesale segment and the potential to get back to 10%, it's about 280 basis points, I guess, of expansion. Could you maybe bucket what the size of each of the drivers between the distribution network changes? I believe there'll be some industry volume there, too, as well as recapturing the U.K. transition. Can you maybe give some flavor or some color on how big is each one of those drivers? And is there anything I might have missed, too, as the path back to 10%?
Taylor E. Luebke
Yes. Thanks, Bobby, for the question. Yes, part of our margin algorithm over -- for Century Vision is to advance Wholesale to double- digit over the long term. Now that also requires normalized, call it, industry growth, which we're currently not in at current state. But as we've talked in the past, as we think about bridging from where we're at today to, call that, 10% over the long term, we believe about 0.5% is fully in our control. And this distribution and home delivery redesign project is going to meaningfully help accomplish part of that over a multiyear project. The other half, frankly, is a requirement of just a healthy industry, which is backed by a healthy housing market. So that's -- yes.
Robert Kenneth Griffin
And then, Melinda, maybe on the redesign and distribution project, can you talk a little bit about why now? I guess, obviously, this is part of Century Vision. Is it just also part that the scale of the business has gotten bigger, you own more of the corporate-owned stores. Just curious on the timing of the decision of why now to do the distribution project.
Melinda D. Whittington
Yes, absolutely. And you really hit it on the head. I mean, we are over recent years with a lot more acquisition that sort of built pieces that we have the opportunity for efficiency as well as just really stepping back and with the expertise we have in the business today to just make sure that we have the right network to support our business as we go forward. So this will be a several-year project. And by the time we're done, we will have overall reduced our total warehouse overhead, optimized routes and miles traveled, reduced inventory levels we need to carry and ultimately improve that delivery experience that's going into the consumer homes as well. So it certainly drives an efficiency side of things, but even more importantly, it drives an even better service level to our consumers because we'll be able to cut time out of the system and less miles on product as well.
Robert Kenneth Griffin
Appreciate it. And I guess lastly for me, can you talk a little bit about what you're seeing maybe on written orders here in May or the quarter-to-date period? I think it was pretty well known President's Day was soft, but just curious if there's been any kind of change in the monthly cadence over -- maybe more of the near-term time frame.
Melinda D. Whittington
Yes. Our Memorial Day was a solid start to the year, and we certainly saw a strong execution in store. If I go back to across Q4, February was our most challenged month, as you know. And so what we're really looking to do as we always do is drive that total written number leveraging our new stores, our acquisitions and then maximizing what we are getting out of each individual store. So I think with where the consumer is right now, we'll need to continue to be very active on that. But again, out of the fourth quarter, February was really the most challenged month. And we're pleased with where we started out on Memorial Day. So it will -- I think the consumer will need to stay actively engaged to drive through this period.
Robert Kenneth Griffin
Very good. Well, good to hear the Memorial Day was better than President's Day. One day, we will be talking about a better furniture industry, hopefully.
Melinda D. Whittington
One of these days.
Operator
And your next question is coming from Anthony Lebiedzinski of Sidoti & Company.
Anthony Chester Lebiedzinski
So certainly nice to see the sales outperformance for the quarter. And so first, let's start with that. So just relative to your guidance that you issued back in February, so even with a softer start, as you alluded to, I mean can you just give us the reasons -- the main reasons for the sales outperformance versus your outlook that you provided a few months ago?
Melinda D. Whittington
Overall, I'd say broad base, so no one individual driver. At the time we were -- we put guidance out there in February, we had just come off President's Day, which I think across the industry was fairly challenged, just a lot of new macroeconomic news really coming out at that time. And so we mentioned that our written trends across the quarter, February was the most challenged from a year-on-year growth basis. . So we were pleased. Again, we do what we always do there, which is to work to execute and delight the consumer and work with our business partners on the B2B side as well. And so as the year went on, we mentioned that February was the toughest month. So we go back to what we do best, which is execute and make sure that we're doing right by the consumer. And we were pleased that the quarter ended up finishing up a little bit stronger than what we had initially expected even in the midst of what ended up being increased macroeconomic challenges throughout the quarter.
Anthony Chester Lebiedzinski
Understood. And then a couple of questions on tariffs. So you mentioned there was some tariff expense. I'm not sure if you quantified that, maybe I missed that. But if you could just maybe expand on that as to how much of the tariff expense are you thinking will be impacting your first quarter results. And as far as pricing, you've talked about some potential, I think, pricing actions. So is any pricing included in the first quarter outlook? Sorry for the long-winded questions.
Taylor E. Luebke
Thanks, Anthony. Let me try to hit those one by one, maybe not in the right order that you asked them. So as we talked before and as a reminder, we've been planning against multiple different scenarios since basically last fall as we know kind of trade policy could potentially evolve. So we were well ahead of kind of different actions we would take to mitigate anything that happened. And essentially, at the start of our last quarter is when things went into place that we responded to agilely and balanced and calm. And our policy at La-
Anthony Chester Lebiedzinski
Understood. Okay. And then lastly, for Joybird. So Melinda, you talked about the divergence for your written business between online versus the stores. So I know you said that you will open, I believe, 3 to 4 this year Joybird stores. But longer term, are you perhaps maybe thinking of going maybe beyond that 25-store goal that you had previously talked about? Or just how are you guys thinking about longer term for Joybird in terms of the stores?
Melinda D. Whittington
Yes. We still feel really good about Joybird, and it is still a young business. And so -- and particularly given that it services a more urban and generally a little bit younger consumer as well, a little more challenged here in the near term. And as you pointed out, Anthony, we're really pleased with the store base that we have now. We've got one more open here just in this last month or so. And that those are really servicing our consumer well even in a more challenged time for that consumer. We've called out the 25 and we still see a path to that. We like this pace of 3 to 4 new stores. And do I think we have the potential to go beyond 25 over the long term? Yes, absolutely. But given just Joybird is still a fairly new brand and we want to make sure that we grow prudently, particularly in challenging time for our industry, so we're going to continue to optimize the brand, optimize that consumer experience and grow in a prudent way.
Operator
Our next question is coming from Brad Thomas of KeyBanc Capital Markets.
Bradley Bingham Thomas
Melinda, I wanted to start off with sort of a big picture question considering the environment that we're in. I was wondering if you could just help us put into context, given tariffs coming through, how you're thinking about La-
Melinda D. Whittington
Yes. Thanks, Brad. I think, obviously, we are positioned extremely well in this environment, as I mentioned, 90% of our products. So let me step back a little bit, about 90% of our business is in the United States even though we're still kind of single-digit share. So obviously, lots of opportunity to grow. And then within that, we service the vast majority of that with our manufacturing footprint in the United States. So broadly, it should be a real strength for La-
Bradley Bingham Thomas
And that's very helpful. But to be clear, Melinda, as we think about La-
Melinda D. Whittington
Yes. Taylor mentioned some nominal pricing put into place in the last quarter and that has been sufficient to manage what we're going through. Obviously, we need to stay agile and we look for a variety of ways to respond to increased input costs from broader sourcing, how we manage timing of buys and so forth. But we've had a little bit of nominal pricing in. But at this stage, I don't have any big concerns about anything big coming down the pipe.
Bradley Bingham Thomas
That's great to hear. And maybe a question for Taylor. Just as we think about operating margin, I know you're not going to guide the full fiscal year, you've given us the quarter ahead here. But maybe in broad strokes, can you help us think about the major puts and takes here for the fiscal year ahead?
Taylor E. Luebke
Yes. Good question, Brad. Yes, we don't guide to the full year. But as we look out, a lot of it depends again to the health of the industry and the consumer, which right now is pretty uncertain. So what we've stated and what we believe is whatever the industry does, we'll outperform. So if the industry looking ahead for our fiscal is flat, we'll grow. And if we grow, we should expect some margin expansion. If the industry is down, then we will be less down. But our goal going into every year is to obviously expand our margins. Now we're in a very uncertain and volatile time, so it's tougher than when you've got all the industry or housing, call it, tailwinds behind you. But a lot of it depends on what the industry does. So we're being incredibly agile. We're making our own momentum and controlling what we control quarter-over-quarter and being very prudent in light of all the external factors around us.
Operator
Well, we appear to have reached the end of our question-and-answer session. I will now turn the call back over to the management team for their closing remarks.
Mark Alan Becks
Thanks, Jenny. Melinda, Taylor and I will be in our offices for the rest of the day to answer any follow-up questions. Thanks, and have a great day.
Transcript from June 18, 2025
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