La-Z-Boy Incorporated (NYSE: LZB), a global leader in the
manufacture and retail of residential furniture, today reported
fourth quarter and full year results for the period ended
April 27, 2024. For the quarter, sales totaled $554 million, a
decrease of 1% against a year ago period that benefited from
pandemic backlog deliveries and 22% above the pre-pandemic fourth
quarter of Fiscal 2019. Operating margin was 9.1% in the quarter on
a GAAP basis and 9.4% on a Non-GAAP(1) basis. Diluted earnings per
share totaled $0.91 on a GAAP basis and $0.95 on a Non-GAAP(1)
basis.
Written sales again outperformed the industry,
with fourth quarter total written sales for the Retail
(company-owned La-Z-Boy Furniture Galleries®) segment up 1% versus
a year ago, and written same-store sales down 5% versus a year ago.
Written same-store sales for the entire La-Z-Boy Furniture
Galleries® network decreased 3% versus the year ago period. Trends
were strongest in the first half of the quarter around key holiday
events and recovery from January weather events. Written sales
results continue to outperform the broader industry, which was down
8% for the quarter, as furniture and home furnishings spending
remains depressed with overall traffic trends challenged and
housing activity down due to continued higher interest rates.
Melinda D. Whittington, President and Chief
Executive Officer of La-Z-Boy Incorporated, said, “We are pleased
with our strong finish to the fiscal year as fourth quarter results
exceeded expectations. Wholesale unit volumes improved in the
quarter and recovery from weather and related disruptions in
January also provided a tailwind. 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. We expect industry fundamentals to remain
volatile for the near term, but remain confident in our ability to
outperform the market and gain share longer term. Our first quarter
is off to a good start 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.”
Whittington added, “During the year we made
great progress on our Century Vision strategy increasing both the
total La-Z-Boy Furniture Galleries® store network and the number of
company-owned stores. We opened six new company-owned stores and
acquired 11 independent Furniture Galleries® stores. We also
invested in both our stores and manufacturing operations through
remodels and improving the agility of our supply chain. As a market
leader in comfortable custom furniture with quick delivery, we are
positioned to continue to outperform the industry and grow share.
Our focus remains on executing our proven playbook of expanding our
Retail segment through new and acquired stores, delivering sales
growth double the industry, and driving margin expansion. I want to
thank all of our dedicated employees for their strong contributions
throughout the year. The momentum in our business is palpable,
particularly with our strong merchandising offerings and new "Long
Live the Lazy" brand campaign building awareness, consideration,
and purchase intent. We are excited to build further on this
foundation in Fiscal 2025."
First Quarter
Outlook:Bob Lucian, Chief Financial
Officer of La-Z-Boy Incorporated, said, “Taken together, our third
quarter and fourth quarter results were largely in line with our
plans for the second half of Fiscal 2024. Recall, delivered sales
in Fiscal 2023 included $300 million of backlog. Thus, our sales
were roughly flat compared to last year, absent this backlog.
Looking forward, in Fiscal 2025, we expect the industry to continue
to be challenged, down by as much as 5%, with any improved industry
trends occurring late in our fiscal year, towards calendar 2025,
when expected interest rate cuts filter through the economy and
begin to positively impact housing activity. We expect to continue
to outperform the industry in Fiscal 2025, which should result in
modest sales growth year-over-year. Growth will be supported by
executing our Century Vision strategy, including the opening of 12
to 15 new La-Z-Boy Furniture Galleries® stores, mainly in the
second half of the fiscal. For the first quarter of Fiscal 2025, we
expect delivered sales to be in the range of $475-495 million and
Non-GAAP operating margin(2) to be in the range of 6-7%. Also, as a
reminder, our first quarter is generally the lowest sales and
margin quarter in the fiscal year due to seasonally lower industry
sales and our annual week-long plant shutdown in July."
Key Results:
(Unaudited, amounts in thousands, except per share data and
percentages) |
|
Quarter Ended |
|
|
|
Year Ended |
|
|
|
|
4/27/2024 |
|
4/29/2023 |
|
Change |
|
4/27/2024 |
|
4/29/2023 |
|
Change |
Sales |
|
$ |
553,535 |
|
|
$ |
561,287 |
|
|
(1 |
)% |
|
$ |
2,047,027 |
|
|
$ |
2,349,433 |
|
|
(13 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income |
|
|
50,097 |
|
|
|
54,073 |
|
|
(7 |
)% |
|
|
150,796 |
|
|
|
211,439 |
|
|
(29 |
)% |
Non-GAAP operating income |
|
|
52,114 |
|
|
|
55,056 |
|
|
(5 |
)% |
|
|
159,398 |
|
|
|
223,203 |
|
|
(29 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating margin |
|
|
9.1% |
|
|
|
9.6% |
|
|
(50) bps |
|
|
7.4% |
|
|
|
9.0% |
|
|
(160) bps |
Non-GAAP operating margin |
|
|
9.4% |
|
|
|
9.8% |
|
|
(40) bps |
|
|
7.8% |
|
|
|
9.5% |
|
|
(170) bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income attributable to La-Z-Boy Incorporated |
|
|
39,308 |
|
|
|
34,373 |
|
|
14 |
% |
|
|
122,626 |
|
|
|
150,664 |
|
|
(19 |
)% |
Non-GAAP net income attributable to La-Z-Boy Incorporated |
|
|
40,811 |
|
|
|
43,091 |
|
|
(5 |
)% |
|
|
129,131 |
|
|
|
167,080 |
|
|
(23 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average common shares |
|
|
42,974 |
|
|
|
43,427 |
|
|
|
|
|
43,280 |
|
|
|
43,240 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings per share |
|
$ |
0.91 |
|
|
$ |
0.79 |
|
|
15 |
% |
|
$ |
2.83 |
|
|
$ |
3.48 |
|
|
(19 |
)% |
Non-GAAP diluted earnings per share |
|
$ |
0.95 |
|
|
$ |
0.99 |
|
|
(4 |
)% |
|
$ |
2.98 |
|
|
$ |
3.86 |
|
|
(23 |
)% |
Liquidity Measures:
|
|
Year Ended |
|
|
|
Year Ended |
(Unaudited, amounts in thousands) |
|
4/27/2024 |
|
4/29/2023 |
|
(Unaudited, amounts in thousands) |
|
4/27/2024 |
|
4/29/2023 |
Free Cash Flow |
|
|
|
|
|
Cash Returns to Shareholders |
|
|
|
|
Operating cash flow |
|
$ |
158,127 |
|
|
$ |
205,167 |
|
|
Share repurchases |
|
$ |
52,773 |
|
|
$ |
5,004 |
|
Capital expenditures |
|
|
(53,551 |
) |
|
|
(68,812 |
) |
|
Dividends |
|
|
32,665 |
|
|
|
29,869 |
|
Free cash flow |
|
$ |
104,576 |
|
|
$ |
136,355 |
|
|
Cash returns to shareholders |
|
$ |
85,438 |
|
|
$ |
34,873 |
|
(Unaudited, amounts in thousands) |
|
4/27/2024 |
|
4/29/2023 |
Cash and cash equivalents |
|
$ |
341,098 |
|
|
$ |
343,374 |
|
Restricted cash |
|
|
— |
|
|
|
3,304 |
|
Total cash, cash equivalents and restricted cash |
|
$ |
341,098 |
|
|
$ |
346,678 |
|
Fiscal 2024 Fourth Quarter Results
versus Fiscal 2023 Fourth Quarter:
- Consolidated sales in the fourth quarter of Fiscal 2024
decreased 1% to $554 million versus last year. Sales in the fourth
quarter of Fiscal 2023 included the delivery of a significant
backlog resulting from heightened demand in prior periods. Sales
increased 22% versus the most recent pre-pandemic fourth quarter in
Fiscal 2019
- Consolidated GAAP operating margin was 9.1% versus 9.6%
- Consolidated Non-GAAP(1) operating
margin decreased 40 basis points to 9.4% versus 9.8%, driven by
lower gross margin from segment mix partially offset by lower
SG&A spend
- GAAP diluted EPS increased to $0.91 from $0.79 and Non-GAAP(1)
diluted EPS decreased to $0.95 from $0.99
Retail Segment:
- Sales:
- Written sales for the Retail
segment (company-owned La-Z-Boy Furniture Galleries® stores)
increased 1% with growth from acquired and new stores, more than
offsetting lower same-store sales compared to the year ago period
- Written same-store sales decreased
5%, driven by lower traffic and the challenging economic
environment, partially offset by stronger conversion rates and
higher design sales
- Delivered sales decreased 6% to
$228 million versus last year's results that included delivery of
pandemic-related backlog but increased 50% versus the most recent
pre-pandemic fourth quarter in fiscal year 2019
- Operating Margin:
- GAAP operating margin and GAAP
operating income was 14.1% and $32 million, versus 15.5% and $38
million, respectively
- Non-GAAP(1) operating margin and
Non-GAAP(1) operating income were 14.2% and $32 million, down 130
basis points and 14%, respectively, driven by improved gross margin
from favorable shift in product mix, more than offset by fixed cost
deleverage on lower delivered sales
Wholesale Segment:
- Sales:
- Sales decreased 1% to $392 million,
relatively flat versus the year ago period
- Operating Margin:
- GAAP operating margin decreased to
8.1% versus 8.5%
- Non-GAAP(1) operating margin
decreased to 8.5%, down 20 basis points; gross margin declines were
partially offset by lower SG&A expenses
Corporate & Other:
- Joybird written sales decreased 1% and delivered sales were
roughly flat at $37 million as sales trends have largely
stabilized. Joybird again made meaningful progress on improving
profitability in the quarter with lower freight and warranty
expenses, improved product mix, and a higher return on advertising
spending
Balance Sheet and Cash Flow, Fiscal
2024:
- Ended the fiscal year with $341 million in cash(3) and no
external debt
- Generated $158 million in cash from operating activities,
including $53 million in the fourth quarter, versus $205 million in
Fiscal 2023 and $78 million in last year's fourth quarter, which
benefited from pandemic backlog deliveries
- Invested $54 million in capital expenditures, primarily related
to La-Z-Boy Furniture Galleries® (new stores and remodels), and
projects at our manufacturing and distribution facilities
- Returned approximately $85 million to shareholders, including
$53 million in share repurchases and $33 million in dividends
Conference
Call:La-Z-Boy will hold a conference call
with the investment community on Tuesday, June 18, 2024, at 8:30
a.m. ET. The toll-free dial-in number is (888) 506-0062;
international callers may use (973) 528-0011. Enter Participant
Access Code 175127.
The call will be webcast live, with
corresponding slides, and archived on the internet. It will be
available at https://lazboy.gcs-web.com/. A telephone replay will
be available for a week following the call. This replay will be
accessible to callers from the U.S. and Canada at (877) 481-4010
and to international callers at (919) 882-2331. Enter Replay
Passcode: 50747. The webcast replay will be available for one
year.
Investor Relations
Contact:Mark Becks, CFA, (734)
457-9538mark.becks@la-z-boy.com
About
La-Z-Boy:La-Z-Boy Incorporated brings the
transformational power of comfort to people, homes, and communities
around the world - a mission that began when its founders invented
the iconic recliner in 1927. Today, the company operates as a
vertically integrated furniture retailer and manufacturer,
committed to uncompromising quality and compassion for its
consumers.
The Retail segment consists of 187 company-owned
La-Z-Boy Furniture Galleries® stores, and is part of a broader
network of over 350 La-Z-Boy Furniture Galleries® that, with
La-Z-Boy.com, serve customers nationwide. Joybird®, an e-commerce
retailer and manufacturer of modern upholstered furniture, has 12
stores in the U.S. In the Wholesale segment, La-Z-Boy manufactures
comfortable, custom furniture for its Furniture Galleries® and a
variety of retail channels, England Furniture Co. offers custom
upholstered furniture, and casegoods brands Kincaid®, American
Drew®, and Hammary® provide pieces that make every room feel like
home. To learn more, please visit: https://www.la-z-boy.com/.
Notes:(1)Non-GAAP amounts
for the fourth quarter of
fiscal 2024 exclude:
- a $1.7 million pre-tax, or $0.03
per diluted share, charge related to our supply chain optimization
actions
- purchase accounting charges related
to acquisitions completed in prior periods totaling $0.3 million
pre-tax, or $0.01 per diluted share, all included in operating
income
Non-GAAP amounts for the fourth quarter
of fiscal 2023 exclude:
- a $0.7 million pre-tax, or $0.01
per diluted share, charge related to the closure of the Torreón, MX
facility, primarily reflecting asset relocation costs
- purchase accounting charges related
to acquisitions completed in prior periods totaling $0.3 million
pre-tax, or $0.01 per diluted share, with $0.3 million included in
operating income and a de minimis amount included in interest
expense
- a pre-tax charge of $10.6 million,
or $0.18 per diluted share related to an impairment of one
investment
Non-GAAP amounts for the full
fiscal 2024 year
exclude:
- a $7.5 million pre-tax, or $0.13
per diluted share, charge related to our supply chain optimization
actions
- purchase accounting charges related
to acquisitions completed in prior periods totaling $1.2 million
pre-tax, or $0.02 per diluted share, with $1.1 million included in
operating income and $0.1 million included in interest expense
Non-GAAP amounts for the full
fiscal 2023 year
exclude:
- a $10.8 million pre-tax, or $0.19
per diluted share, charge related to the closure of the Torreón, MX
facility, primarily reflecting the impairment of various
assets
- purchase accounting charges related
to acquisitions completed in prior periods totaling $0.6 million
pre-tax, or less than $0.01 per diluted share, with $0.3 million
included in operating income and $0.3 million included in interest
expense
- a pre-tax charge of $10.6 million,
or $0.18 per diluted share, related to an impairment of one
investment
- a $0.6 million pre-tax, or $0.01
per diluted share, charge related to the company's business
realignment, announced in June 2020
(2)This reference to Non-GAAP operating
margin for a future period is a Non-GAAP financial
measure. We have not provided a reconciliation of Non-GAAP
operating margin for future periods in this press release because
such reconciliation cannot be provided without unreasonable
efforts.
Please refer to the accompanying “Reconciliation
of GAAP to Non-GAAP Financial Measures” and “Reconciliation of GAAP
to Non-GAAP Financial Measures: Segment Information” for detailed
information on calculating the Non-GAAP financial measures used in
this press release and a reconciliation to the most directly
comparable GAAP measure.
(3)Cash includes cash, cash
equivalents and restricted cash.
Cautionary Note Regarding
Forward-Looking Statements:This news
release contains “forward-looking” statements within the meaning of
the Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by the fact that they
do not relate strictly to historical or current facts. Generally,
forward-looking statements include information concerning
expectations, projections or trends relating to our results of
operations, financial results, financial condition, strategic
initiatives and plans, expenses, dividends, share repurchases,
liquidity, use of cash and cash requirements, borrowing capacity,
investments, future economic performance, and our business and
industry.
The forward-looking statements in this press
release are based on certain assumptions and currently available
information and are subject to various risks and uncertainties,
many of which are unforeseeable and beyond our control. Additional
risks and uncertainties that we do not presently know about or that
we currently consider to be immaterial may also affect our business
operations and financial results. Our actual future results and
trends may differ materially depending on a variety of factors,
including, but not limited to, the risks and uncertainties
discussed in our Fiscal 2023 Annual Report on Form 10-K and other
factors identified in our reports filed with the Securities and
Exchange Commission (the “SEC”), available on the SEC’s website at
www.sec.gov. Given these risks and uncertainties, you should not
rely on forward-looking statements as a prediction of actual
results. We are including this cautionary note to make applicable
and take advantage of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 for forward-looking
statements. We undertake no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or for any other reason.
Non-GAAP Financial
Measures:In addition to the financial
measures prepared in accordance with accounting principles
generally accepted in the United States (“GAAP”), this press
release also includes Non-GAAP financial measures. Management uses
these Non-GAAP financial measures when assessing our ongoing
performance. This press release contains references to Non-GAAP
operating income (on a consolidated basis and by segment), Non-GAAP
operating margin (on a consolidated basis and by segment), and
Non-GAAP net income attributable to La-Z-Boy Incorporated per
diluted share, Non-GAAP diluted earnings per share (and components
thereof, including Non-GAAP income before income taxes and Non-GAAP
net income attributable to La-Z-Boy Incorporated), each of which
may exclude, as applicable, business realignment charges, supply
chain optimization charges, investment impairment charges, and
purchase accounting charges. The business realignment charges
include severance costs, asset impairment costs, and costs to
relocate equipment and inventory related to organizational changes
we undertook as a result of our response to COVID-19, including a
reduction in the company’s work force, temporary closure of certain
manufacturing facilities and subsequent gains resulting from the
sale of related assets. The supply chain optimization charges
include asset impairment costs, accelerated depreciation expense,
lease termination gains, severance costs, and employee relocation
costs resulting from the closure, consolidation, and centralization
of various global supply chain operations and includes the closure
of our Torreón manufacturing facility (previously disclosed as
Mexico optimization). The purchase accounting charges include the
amortization of intangible assets, fair value adjustments of future
cash payments recorded as interest expense, and adjustments to the
fair value of a contingent consideration liability. These Non-GAAP
financial measures are not meant to be considered superior to or a
substitute for La-Z-Boy Incorporated’s results of operations
prepared in accordance with GAAP and may not be comparable to
similarly titled measures reported by other companies.
Reconciliations of such Non-GAAP financial measures to the most
directly comparable GAAP financial measures are set forth in the
accompanying tables.
Management believes that presenting certain
Non-GAAP financial measures will help investors understand the
long-term profitability trends of our business and compare our
profitability to prior and future periods and to our peers.
Management excludes purchase accounting charges because the amount
and timing of such charges are significantly impacted by the
timing, size, number and nature of the acquisitions consummated and
the success with which we operate the businesses acquired. While
the company has a history of acquisition activity, it does not
acquire businesses on a predictable cycle, and the impact of
purchase accounting charges is unique to each acquisition and can
vary significantly from acquisition to acquisition. Similarly,
business realignment charges and supply chain optimization charges
are dependent on the timing, size, number and nature of the
operations being closed, consolidated or centralized, and the
charges may not be incurred on a predictable cycle. Management also
excludes the impacts from the impairment charge for one investment
when assessing the company's operating and financial performance
due to the one-time and infrequent nature of the transaction.
Management believes that exclusion of these items facilitates more
consistent comparisons of the company’s operating results over
time. Where applicable, the accompanying “Reconciliation of GAAP to
Non-GAAP Financial Measures” tables present the excluded items net
of tax calculated using the effective tax rate from operations for
the period in which the adjustment is presented.
|
LA-Z-BOY INCORPORATEDCONSOLIDATED
STATEMENT OF INCOME |
|
(Unaudited, amounts in thousands, except per share
data) |
|
Quarter Ended |
|
Year Ended |
|
4/27/2024 |
|
4/29/2023 |
|
4/27/2024 |
|
4/29/2023 |
Sales |
|
$ |
553,535 |
|
|
$ |
561,287 |
|
|
$ |
2,047,027 |
|
|
$ |
2,349,433 |
|
Cost of sales |
|
|
313,452 |
|
|
|
312,649 |
|
|
|
1,165,357 |
|
|
|
1,384,700 |
|
Gross profit |
|
|
240,083 |
|
|
|
248,638 |
|
|
|
881,670 |
|
|
|
964,733 |
|
Selling, general and administrative expense |
|
|
189,986 |
|
|
|
194,565 |
|
|
|
730,874 |
|
|
|
753,294 |
|
Operating income |
|
|
50,097 |
|
|
|
54,073 |
|
|
|
150,796 |
|
|
|
211,439 |
|
Interest expense |
|
|
(126 |
) |
|
|
(122 |
) |
|
|
(455 |
) |
|
|
(536 |
) |
Interest income |
|
|
4,260 |
|
|
|
3,046 |
|
|
|
15,482 |
|
|
|
6,670 |
|
Other income (expense),
net |
|
|
(92 |
) |
|
|
(10,950 |
) |
|
|
(71 |
) |
|
|
(11,784 |
) |
Income before income taxes |
|
|
54,139 |
|
|
|
46,047 |
|
|
|
165,752 |
|
|
|
205,789 |
|
Income tax expense |
|
|
13,807 |
|
|
|
11,402 |
|
|
|
41,116 |
|
|
|
53,848 |
|
Net income |
|
|
40,332 |
|
|
|
34,645 |
|
|
|
124,636 |
|
|
|
151,941 |
|
Net (income) loss attributable
to noncontrolling interests |
|
|
(1,024 |
) |
|
|
(272 |
) |
|
|
(2,010 |
) |
|
|
(1,277 |
) |
Net income attributable to La-Z-Boy Incorporated |
|
$ |
39,308 |
|
|
$ |
34,373 |
|
|
$ |
122,626 |
|
|
$ |
150,664 |
|
|
|
|
|
|
|
|
|
|
Basic weighted average common
shares |
|
|
42,499 |
|
|
|
43,261 |
|
|
|
42,878 |
|
|
|
43,148 |
|
Basic net income attributable
to La-Z-Boy Incorporated per share |
|
$ |
0.92 |
|
|
$ |
0.79 |
|
|
$ |
2.86 |
|
|
$ |
3.49 |
|
|
|
|
|
|
|
|
|
|
Diluted weighted average
common shares |
|
|
42,974 |
|
|
|
43,427 |
|
|
|
43,280 |
|
|
|
43,240 |
|
Diluted net income
attributable to La-Z-Boy Incorporated per share |
|
$ |
0.91 |
|
|
$ |
0.79 |
|
|
$ |
2.83 |
|
|
$ |
3.48 |
|
|
LA-Z-BOY INCORPORATEDCONSOLIDATED BALANCE
SHEET |
|
(Unaudited, amounts in thousands, except par
value) |
|
4/27/2024 |
|
4/29/2023 |
Current assets |
|
|
|
|
Cash and equivalents |
|
$ |
341,098 |
|
|
$ |
343,374 |
|
Restricted cash |
|
|
— |
|
|
|
3,304 |
|
Receivables, net of allowance of $5,076 at 4/27/2024 and $4,776 at
4/29/2023 |
|
|
139,213 |
|
|
|
125,536 |
|
Inventories, net |
|
|
263,237 |
|
|
|
276,257 |
|
Other current assets |
|
|
93,260 |
|
|
|
106,129 |
|
Total current assets |
|
|
836,808 |
|
|
|
854,600 |
|
Property, plant and equipment,
net |
|
|
298,224 |
|
|
|
278,578 |
|
Goodwill |
|
|
214,453 |
|
|
|
205,008 |
|
Other intangible assets,
net |
|
|
47,251 |
|
|
|
39,375 |
|
Deferred income taxes –
long-term |
|
|
10,283 |
|
|
|
8,918 |
|
Right of use lease assets |
|
|
446,466 |
|
|
|
416,269 |
|
Other long-term assets,
net |
|
|
59,957 |
|
|
|
63,515 |
|
Total assets |
|
$ |
1,913,442 |
|
|
$ |
1,866,263 |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Accounts payable |
|
$ |
96,486 |
|
|
$ |
107,460 |
|
Lease liabilities, short-term |
|
|
77,027 |
|
|
|
77,751 |
|
Accrued expenses and other current liabilities |
|
|
263,768 |
|
|
|
290,650 |
|
Total current liabilities |
|
|
437,281 |
|
|
|
475,861 |
|
Lease liabilities,
long-term |
|
|
404,724 |
|
|
|
368,163 |
|
Other long-term
liabilities |
|
|
58,077 |
|
|
|
70,142 |
|
Shareholders' equity |
|
|
|
|
Preferred shares – 5,000 authorized; none issued |
|
|
— |
|
|
|
— |
|
Common shares, $1.00 par value – 150,000 authorized; 42,440
outstanding at 4/27/2024 and 43,318 outstanding at
4/29/2023 |
|
|
42,440 |
|
|
|
43,318 |
|
Capital in excess of par value |
|
|
368,485 |
|
|
|
358,891 |
|
Retained earnings |
|
|
598,009 |
|
|
|
545,155 |
|
Accumulated other comprehensive loss |
|
|
(5,870 |
) |
|
|
(5,528 |
) |
Total La-Z-Boy Incorporated shareholders' equity |
|
|
1,003,064 |
|
|
|
941,836 |
|
Noncontrolling interests |
|
|
10,296 |
|
|
|
10,261 |
|
Total equity |
|
|
1,013,360 |
|
|
|
952,097 |
|
Total liabilities and equity |
|
$ |
1,913,442 |
|
|
$ |
1,866,263 |
|
|
LA-Z-BOY INCORPORATEDCONSOLIDATED
STATEMENT OF CASH FLOWS |
|
|
|
Year Ended |
(Unaudited, amounts in thousands) |
|
4/27/2024 |
|
4/29/2023 |
Cash flows from operating activities |
|
|
|
|
Net income |
|
$ |
124,636 |
|
|
$ |
151,941 |
|
Adjustments to reconcile net income to cash provided by operating
activities |
|
|
|
|
(Gain)/loss on disposal and impairment of assets |
|
|
1,101 |
|
|
|
6,365 |
|
(Gain)/loss on sale of investments |
|
|
(1,199 |
) |
|
|
148 |
|
Provision for doubtful accounts |
|
|
511 |
|
|
|
1,546 |
|
Depreciation and amortization |
|
|
48,552 |
|
|
|
40,193 |
|
Amortization of right-of-use lease assets |
|
|
76,133 |
|
|
|
76,511 |
|
Lease impairment/(settlement) |
|
|
(1,175 |
) |
|
|
1,347 |
|
Equity-based compensation expense |
|
|
14,426 |
|
|
|
12,458 |
|
Change in deferred taxes |
|
|
(3,268 |
) |
|
|
3,895 |
|
Change in receivables |
|
|
(16,811 |
) |
|
|
53,675 |
|
Change in inventories |
|
|
19,877 |
|
|
|
32,311 |
|
Change in other assets |
|
|
10,303 |
|
|
|
24,377 |
|
Change in payables |
|
|
(8,606 |
) |
|
|
4,586 |
|
Change in lease liabilities |
|
|
(76,766 |
) |
|
|
(77,811 |
) |
Change in other liabilities |
|
|
(29,587 |
) |
|
|
(126,375 |
) |
Net cash provided by operating activities |
|
|
158,127 |
|
|
|
205,167 |
|
|
|
|
|
|
Cash flows from investing
activities |
|
|
|
|
Proceeds from disposals of assets |
|
|
4,972 |
|
|
|
136 |
|
Capital expenditures |
|
|
(53,551 |
) |
|
|
(68,812 |
) |
Purchases of investments |
|
|
(18,351 |
) |
|
|
(9,092 |
) |
Proceeds from sales of investments |
|
|
24,816 |
|
|
|
24,483 |
|
Acquisitions |
|
|
(39,440 |
) |
|
|
(16,835 |
) |
Net cash used for investing activities |
|
|
(81,554 |
) |
|
|
(70,120 |
) |
|
|
|
|
|
Cash flows from financing
activities |
|
|
|
|
Payments on debt and finance lease liabilities |
|
|
(489 |
) |
|
|
(123 |
) |
Holdback payments for acquisitions |
|
|
(5,000 |
) |
|
|
(5,000 |
) |
Stock issued for stock and employee benefit plans, net of shares
withheld for taxes |
|
|
10,872 |
|
|
|
2,857 |
|
Repurchases of common stock |
|
|
(52,773 |
) |
|
|
(5,004 |
) |
Dividends paid to shareholders |
|
|
(32,665 |
) |
|
|
(29,869 |
) |
Dividends paid to minority interest joint venture partners (1) |
|
|
(1,172 |
) |
|
|
— |
|
Net cash used for financing activities |
|
|
(81,227 |
) |
|
|
(37,139 |
) |
|
|
|
|
|
Effect of exchange rate
changes on cash and equivalents |
|
|
(926 |
) |
|
|
(86 |
) |
Change in cash, cash
equivalents and restricted cash |
|
|
(5,580 |
) |
|
|
97,822 |
|
Cash, cash equivalents and
restricted cash at beginning of period |
|
|
346,678 |
|
|
|
248,856 |
|
Cash, cash equivalents and
restricted cash at end of period |
|
$ |
341,098 |
|
|
$ |
346,678 |
|
|
|
|
|
|
Supplemental disclosure of
non-cash investing activities |
|
|
|
|
Capital expenditures included in payables |
|
$ |
5,952 |
|
|
$ |
8,208 |
|
(1) |
Includes dividends paid to joint venture minority partners
resulting from the repatriation of dividends from our foreign
earnings that we no longer consider permanently reinvested. |
|
LA-Z-BOY INCORPORATEDSEGMENT
INFORMATION |
|
|
|
Quarter Ended |
|
Year Ended |
(Unaudited, amounts in thousands) |
|
4/27/2024 |
|
4/29/2023 |
|
4/27/2024 |
|
4/29/2023 |
Sales |
|
|
|
|
|
|
|
|
Wholesale segment: |
|
|
|
|
|
|
|
|
Sales to external customers |
|
$ |
287,900 |
|
|
$ |
280,918 |
|
|
$ |
1,048,431 |
|
|
$ |
1,215,429 |
|
Intersegment sales |
|
|
104,561 |
|
|
|
113,678 |
|
|
|
398,847 |
|
|
|
474,819 |
|
Wholesale segment sales |
|
|
392,461 |
|
|
|
394,596 |
|
|
|
1,447,278 |
|
|
|
1,690,248 |
|
|
|
|
|
|
|
|
|
|
Retail segment sales |
|
|
227,878 |
|
|
|
242,713 |
|
|
|
855,126 |
|
|
|
982,043 |
|
|
|
|
|
|
|
|
|
|
Corporate and Other: |
|
|
|
|
|
|
|
|
Sales to external customers |
|
|
37,757 |
|
|
|
37,656 |
|
|
|
143,470 |
|
|
|
151,961 |
|
Intersegment sales |
|
|
1,587 |
|
|
|
2,657 |
|
|
|
10,299 |
|
|
|
14,229 |
|
Corporate and Other sales |
|
|
39,344 |
|
|
|
40,313 |
|
|
|
153,769 |
|
|
|
166,190 |
|
|
|
|
|
|
|
|
|
|
Eliminations |
|
|
(106,148 |
) |
|
|
(116,335 |
) |
|
|
(409,146 |
) |
|
|
(489,048 |
) |
Consolidated sales |
|
$ |
553,535 |
|
|
$ |
561,287 |
|
|
$ |
2,047,027 |
|
|
$ |
2,349,433 |
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss) |
|
|
|
|
|
|
|
|
Wholesale segment |
|
$ |
31,709 |
|
|
$ |
33,657 |
|
|
$ |
99,373 |
|
|
$ |
115,215 |
|
Retail segment |
|
|
32,170 |
|
|
|
37,716 |
|
|
|
111,682 |
|
|
|
161,571 |
|
Corporate and Other |
|
|
(13,782 |
) |
|
|
(17,300 |
) |
|
|
(60,259 |
) |
|
|
(65,347 |
) |
Consolidated operating income |
|
$ |
50,097 |
|
|
$ |
54,073 |
|
|
$ |
150,796 |
|
|
$ |
211,439 |
|
|
LA-Z-BOY INCORPORATEDUNAUDITED QUARTERLY
FINANCIAL DATA |
|
Fiscal 2024 |
|
Fiscal Quarter
Ended |
|
(13 weeks) |
|
(13 weeks) |
|
(13 weeks) |
|
(13 weeks) |
(Amounts in thousands, except per share data) |
|
7/29/2023 |
|
10/28/2023 |
|
1/27/2024 |
|
4/27/2024 |
Sales |
|
$ |
481,651 |
|
|
$ |
511,435 |
|
|
$ |
500,406 |
|
|
$ |
553,535 |
|
Cost of sales |
|
|
275,923 |
|
|
|
288,830 |
|
|
|
287,152 |
|
|
|
313,452 |
|
Gross profit |
|
|
205,728 |
|
|
|
222,605 |
|
|
|
213,254 |
|
|
|
240,083 |
|
Selling, general and
administrative expense |
|
|
171,202 |
|
|
|
188,993 |
|
|
|
180,693 |
|
|
|
189,986 |
|
Operating income |
|
|
34,526 |
|
|
|
33,612 |
|
|
|
32,561 |
|
|
|
50,097 |
|
Interest expense |
|
|
(122 |
) |
|
|
(101 |
) |
|
|
(106 |
) |
|
|
(126 |
) |
Interest income |
|
|
3,056 |
|
|
|
4,042 |
|
|
|
4,124 |
|
|
|
4,260 |
|
Other income (expense),
net |
|
|
556 |
|
|
|
104 |
|
|
|
(639 |
) |
|
|
(92 |
) |
Income before income taxes |
|
|
38,016 |
|
|
|
37,657 |
|
|
|
35,940 |
|
|
|
54,139 |
|
Income tax expense |
|
|
10,090 |
|
|
|
9,963 |
|
|
|
7,256 |
|
|
|
13,807 |
|
Net income |
|
|
27,926 |
|
|
|
27,694 |
|
|
|
28,684 |
|
|
|
40,332 |
|
Net (income) loss attributable
to noncontrolling interests |
|
|
(447 |
) |
|
|
(495 |
) |
|
|
(44 |
) |
|
|
(1,024 |
) |
Net income attributable to La-Z-Boy Incorporated |
|
$ |
27,479 |
|
|
$ |
27,199 |
|
|
$ |
28,640 |
|
|
$ |
39,308 |
|
Diluted weighted average
common shares |
|
|
43,333 |
|
|
|
43,401 |
|
|
|
43,195 |
|
|
|
42,974 |
|
Diluted net income
attributable to La-Z-Boy Incorporated per share |
|
$ |
0.63 |
|
|
$ |
0.63 |
|
|
$ |
0.66 |
|
|
$ |
0.91 |
|
|
Fiscal 2023 |
|
Fiscal Quarter
Ended |
|
(13 weeks) |
|
(13 weeks) |
|
(13 weeks) |
|
(14 weeks) |
(Amounts in thousands, except per share data) |
|
7/30/2022 |
|
10/29/2022 |
|
1/28/2023 |
|
4/29/2023 |
Sales |
|
$ |
604,091 |
|
|
$ |
611,332 |
|
|
$ |
572,723 |
|
|
$ |
561,287 |
|
Cost of sales |
|
|
373,061 |
|
|
|
361,848 |
|
|
|
337,142 |
|
|
|
312,649 |
|
Gross profit |
|
|
231,030 |
|
|
|
249,484 |
|
|
|
235,581 |
|
|
|
248,638 |
|
Selling, general and
administrative expense |
|
|
178,387 |
|
|
|
187,601 |
|
|
|
192,741 |
|
|
|
194,565 |
|
Operating income |
|
|
52,643 |
|
|
|
61,883 |
|
|
|
42,840 |
|
|
|
54,073 |
|
Interest expense |
|
|
(159 |
) |
|
|
(119 |
) |
|
|
(136 |
) |
|
|
(122 |
) |
Interest income |
|
|
474 |
|
|
|
1,138 |
|
|
|
2,012 |
|
|
|
3,046 |
|
Other income (expense),
net |
|
|
45 |
|
|
|
183 |
|
|
|
(1,062 |
) |
|
|
(10,950 |
) |
Income before income taxes |
|
|
53,003 |
|
|
|
63,085 |
|
|
|
43,654 |
|
|
|
46,047 |
|
Income tax expense |
|
|
14,063 |
|
|
|
16,306 |
|
|
|
12,077 |
|
|
|
11,402 |
|
Net income |
|
|
38,940 |
|
|
|
46,779 |
|
|
|
31,577 |
|
|
|
34,645 |
|
Net income attributable to
noncontrolling interests |
|
|
(452 |
) |
|
|
(702 |
) |
|
|
149 |
|
|
|
(272 |
) |
Net income attributable to La-Z-Boy Incorporated |
|
$ |
38,488 |
|
|
$ |
46,077 |
|
|
$ |
31,726 |
|
|
$ |
34,373 |
|
Diluted weighted average
common shares |
|
|
43,142 |
|
|
|
43,182 |
|
|
|
43,137 |
|
|
|
43,427 |
|
Diluted net income
attributable to La-Z-Boy Incorporated per share |
|
$ |
0.89 |
|
|
$ |
1.07 |
|
|
$ |
0.74 |
|
|
$ |
0.79 |
|
|
LA-Z-BOY INCORPORATEDRECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES |
|
|
|
Quarter Ended |
|
Year Ended |
(Amounts in thousands, except per share data) |
|
4/27/2024 |
|
4/29/2023 |
|
4/27/2024 |
|
4/29/2023 |
GAAP gross profit |
|
$ |
240,083 |
|
|
$ |
248,638 |
|
|
$ |
881,670 |
|
|
$ |
964,733 |
|
Purchase accounting charges (1) |
|
|
89 |
|
|
|
— |
|
|
|
89 |
|
|
|
132 |
|
Business realignment charges (2) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
609 |
|
Supply chain optimization charges (3) |
|
|
502 |
|
|
|
741 |
|
|
|
4,468 |
|
|
|
1,621 |
|
Non-GAAP gross profit |
|
$ |
240,674 |
|
|
$ |
249,379 |
|
|
$ |
886,227 |
|
|
$ |
967,095 |
|
|
|
|
|
|
|
|
|
|
GAAP SG&A |
|
$ |
189,986 |
|
|
$ |
194,565 |
|
|
$ |
730,874 |
|
|
$ |
753,294 |
|
Purchase accounting (charges)/gain (4) |
|
|
(254 |
) |
|
|
(252 |
) |
|
|
(1,016 |
) |
|
|
(206 |
) |
Supply chain optimization charges (5) |
|
|
(1,172 |
) |
|
|
10 |
|
|
|
(3,029 |
) |
|
|
(9,196 |
) |
Non-GAAP SG&A |
|
$ |
188,560 |
|
|
$ |
194,323 |
|
|
$ |
726,829 |
|
|
$ |
743,892 |
|
|
|
|
|
|
|
|
|
|
GAAP operating income |
|
$ |
50,097 |
|
|
$ |
54,073 |
|
|
$ |
150,796 |
|
|
$ |
211,439 |
|
Purchase accounting charges |
|
|
343 |
|
|
|
252 |
|
|
|
1,105 |
|
|
|
338 |
|
Business realignment charges |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
609 |
|
Supply chain optimization charges |
|
|
1,674 |
|
|
|
731 |
|
|
|
7,497 |
|
|
|
10,817 |
|
Non-GAAP operating income |
|
$ |
52,114 |
|
|
$ |
55,056 |
|
|
$ |
159,398 |
|
|
$ |
223,203 |
|
|
|
|
|
|
|
|
|
|
GAAP income before income
taxes |
|
$ |
54,139 |
|
|
$ |
46,047 |
|
|
$ |
165,752 |
|
|
$ |
205,789 |
|
Purchase accounting charges recorded as part of gross profit,
SG&A, and interest expense |
|
|
343 |
|
|
|
300 |
|
|
|
1,153 |
|
|
|
571 |
|
Business realignment charges |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
609 |
|
Supply chain optimization charges |
|
|
1,674 |
|
|
|
731 |
|
|
|
7,497 |
|
|
|
10,817 |
|
Investment impairment |
|
|
— |
|
|
|
10,562 |
|
|
|
— |
|
|
|
10,562 |
|
Non-GAAP income before income
taxes |
|
$ |
56,156 |
|
|
$ |
57,640 |
|
|
$ |
174,402 |
|
|
$ |
228,348 |
|
|
|
|
|
|
|
|
|
|
GAAP net income attributable
to La-Z-Boy Incorporated |
|
$ |
39,308 |
|
|
$ |
34,373 |
|
|
$ |
122,626 |
|
|
$ |
150,664 |
|
Purchase accounting charges recorded as part of gross profit,
SG&A, and interest expense |
|
|
343 |
|
|
|
300 |
|
|
|
1,153 |
|
|
|
571 |
|
Tax effect of purchase accounting |
|
|
(87 |
) |
|
|
(74 |
) |
|
|
(286 |
) |
|
|
(361 |
) |
Business realignment charges |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
609 |
|
Tax effect of business realignment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(160 |
) |
Supply chain optimization charges |
|
|
1,674 |
|
|
|
731 |
|
|
|
7,497 |
|
|
|
10,817 |
|
Tax effect of supply chain optimization |
|
|
(427 |
) |
|
|
(181 |
) |
|
|
(1,859 |
) |
|
|
(2,845 |
) |
Investment impairment |
|
|
— |
|
|
|
10,562 |
|
|
|
— |
|
|
|
10,562 |
|
Tax effect of investment impairment |
|
|
— |
|
|
|
(2,619 |
) |
|
|
— |
|
|
|
(2,778 |
) |
Non-GAAP net income
attributable to La-Z-Boy Incorporated |
|
$ |
40,811 |
|
|
$ |
43,091 |
|
|
$ |
129,131 |
|
|
$ |
167,080 |
|
|
|
|
|
|
|
|
|
|
GAAP net income attributable
to La-Z-Boy Incorporated per diluted share ("Diluted EPS") |
|
$ |
0.91 |
|
|
$ |
0.79 |
|
|
$ |
2.83 |
|
|
$ |
3.48 |
|
Purchase accounting charges, net of tax, per share |
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.02 |
|
|
|
— |
|
Business realignment charges, net of tax, per share |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
Supply chain optimization charges, net of tax, per share |
|
|
0.03 |
|
|
|
0.01 |
|
|
|
0.13 |
|
|
|
0.19 |
|
Investment impairment, net of tax, per share |
|
|
— |
|
|
|
0.18 |
|
|
|
— |
|
|
|
0.18 |
|
Non-GAAP net income
attributable to La-Z-Boy Incorporated per diluted share ("Diluted
EPS") |
|
$ |
0.95 |
|
|
$ |
0.99 |
|
|
$ |
2.98 |
|
|
$ |
3.86 |
|
(1) |
Includes incremental expense upon the sale of inventory acquired at
fair value. |
(2) |
Includes severance charges related to the closure of our Newton,
Mississippi manufacturing facility. |
(3) |
Fiscal 2024 primarily includes severance charges related to
shifting upholstery production from our Ramos, Mexico operations to
other upholstery plants and relocating our cut and sew operations
back to Ramos, Mexico, resulting in the permanent closure of our
leased cut and sew facility in Parras, Mexico. Fiscal 2023
primarily includes severance charges related to the closure our
manufacturing facility in Torreón, Mexico. |
(4) |
Includes amortization of intangible assets. Fiscal 2023 also
includes an $0.8 million adjustment to the fair value of a
contingent consideration liability. |
(5) |
Fiscal 2024 includes $4.2 million of accelerated depreciation and
impairment of fixed assets related to shifting upholstery
production from our Ramos, Mexico operations to other upholstery
plants and relocating our cut and sew operations back to Ramos,
Mexico, resulting in the permanent closure of our leased cut and
sew facility in Parras, Mexico. Fiscal 2024 also includes a $1.2
million gain related to the settlement of the Torreón, Mexico lease
obligation on previously impaired assets. Fiscal 2023 includes
impairment charges of various assets, primarily long-lived assets,
related to the closure of our manufacturing facility in Torreón,
Mexico. |
|
LA-Z-BOY INCORPORATEDRECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURESSEGMENT
INFORMATION |
|
|
|
Quarter Ended |
|
Year Ended |
(Amounts in thousands) |
|
4/27/2024 |
|
% of sales |
|
4/29/2023 |
|
% of sales |
|
4/27/2024 |
|
% of sales |
|
4/29/2023 |
|
% of sales |
GAAP operating income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale segment |
|
$ |
31,709 |
|
|
8.1% |
|
$ |
33,657 |
|
|
8.5% |
|
$ |
99,373 |
|
|
6.9% |
|
$ |
115,215 |
|
|
6.8% |
Retail segment |
|
|
32,170 |
|
|
14.1% |
|
|
37,716 |
|
|
15.5% |
|
|
111,682 |
|
|
13.1% |
|
|
161,571 |
|
|
16.5% |
Corporate and Other |
|
|
(13,782 |
) |
|
N/M |
|
|
(17,300 |
) |
|
N/M |
|
|
(60,259 |
) |
|
N/M |
|
|
(65,347 |
) |
|
N/M |
Consolidated GAAP operating income |
|
$ |
50,097 |
|
|
9.1% |
|
$ |
54,073 |
|
|
9.6% |
|
$ |
150,796 |
|
|
7.4% |
|
$ |
211,439 |
|
|
9.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP items affecting
operating income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale segment |
|
$ |
1,729 |
|
|
|
|
$ |
784 |
|
|
|
|
$ |
7,715 |
|
|
|
|
$ |
11,634 |
|
|
|
Retail segment |
|
|
89 |
|
|
|
|
|
— |
|
|
|
|
|
89 |
|
|
|
|
|
132 |
|
|
|
Corporate and Other |
|
|
199 |
|
|
|
|
|
199 |
|
|
|
|
|
798 |
|
|
|
|
|
(2 |
) |
|
|
Consolidated Non-GAAP items affecting operating income |
|
$ |
2,017 |
|
|
|
|
$ |
983 |
|
|
|
|
$ |
8,602 |
|
|
|
|
$ |
11,764 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating income
(loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale segment |
|
$ |
33,438 |
|
|
8.5% |
|
$ |
34,441 |
|
|
8.7% |
|
$ |
107,088 |
|
|
7.4% |
|
$ |
126,849 |
|
|
7.5% |
Retail segment |
|
|
32,259 |
|
|
14.2% |
|
|
37,716 |
|
|
15.5% |
|
|
111,771 |
|
|
13.1% |
|
|
161,703 |
|
|
16.5% |
Corporate and Other |
|
|
(13,583 |
) |
|
N/M |
|
|
(17,101 |
) |
|
N/M |
|
|
(59,461 |
) |
|
N/M |
|
|
(65,349 |
) |
|
N/M |
Consolidated Non-GAAP operating income |
|
$ |
52,114 |
|
|
9.4% |
|
$ |
55,056 |
|
|
9.8% |
|
$ |
159,398 |
|
|
7.8% |
|
$ |
223,203 |
|
|
9.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/M - Not Meaningful |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
La Z Boy (NYSE:LZB)
Historical Stock Chart
From May 2024 to Jun 2024
La Z Boy (NYSE:LZB)
Historical Stock Chart
From Jun 2023 to Jun 2024