La-Z-Boy’s Earnings Call: Retail Growth Amid Challenges

La-Z-Boy Incorporated ((LZB)) has held its Q4 earnings call. Read on for the main highlights of the call.

La-Z-Boy Incorporated’s recent earnings call painted a picture of resilience and strategic growth amidst a challenging economic landscape. The company reported strong performance in its core North American operations, buoyed by retail expansion and effective cost management. However, international challenges and a notable decline in Joybird’s online sales tempered the overall sentiment. Despite these hurdles, La-Z-Boy remains optimistic about future prospects, though it acknowledges the prevailing economic uncertainties.

Strong Retail Segment Growth

La-Z-Boy’s retail segment demonstrated impressive growth, with sales increasing by 8% in the fourth quarter and 5% for the entire year. This growth was fueled by the addition of new stores and strategic acquisitions, culminating in the opening of the company’s 200th company-owned La-Z-Boy Furniture Galleries store.

Positive Full Year Financial Performance

The company reported a 3% growth in consolidated delivered sales, reaching $2.1 billion for the year. Operating cash flow saw an 18% increase, totaling $187 million, and La-Z-Boy returned $113 million to its shareholders, reflecting a strong financial performance.

Expansion of Company-Owned Retail Network

La-Z-Boy has significantly expanded its company-owned store footprint, which now accounts for 55% of the La-Z-Boy Furniture Galleries network, a substantial increase from 34% a decade ago. This expansion underscores the company’s commitment to strengthening its retail presence.

Effective Cost Management

The company maintained a robust balance sheet, ending the year with $328 million in cash and no external debt. Despite economic volatility, La-Z-Boy achieved an adjusted operating margin at the high end of its guidance, showcasing effective cost management strategies.

Recognition and Brand Strength

La-Z-Boy’s brand strength was highlighted by its inclusion in Newsweek’s list of America’s Most Loved Brands and Most Trustworthy Companies for 2025, reinforcing the company’s reputation and consumer trust.

Decline in Joybird’s Online Sales

Joybird, a subsidiary of La-Z-Boy, experienced a 21% decrease in written sales during the fourth quarter, with online sales particularly affected. This decline was attributed to rising macroeconomic uncertainty impacting consumer behavior.

Challenges in International Wholesale Business

La-Z-Boy’s international wholesale segment faced significant challenges, including a major customer transition that impacted margins. This led to a goodwill impairment related to the U.K. business, highlighting the difficulties in international markets.

Decreased Same-Store Sales in Retail Segment

The retail segment saw a 5% decrease in written same-store sales compared to the previous year’s fourth quarter. This decline was influenced by high mortgage rates and global economic volatility, affecting consumer spending.

Forward-Looking Guidance

Looking ahead, La-Z-Boy remains optimistic about its growth trajectory, driven by its Century Vision strategy. The company plans to open approximately 15 new La-Z-Boy Furniture Galleries stores and 3 to 4 new Joybird stores in fiscal 2026. With a focus on strengthening its supply chain and distribution network, La-Z-Boy aims to navigate economic challenges and continue its growth momentum.

In conclusion, La-Z-Boy Incorporated’s earnings call reflected a balanced mix of achievements and challenges. While the company celebrated strong retail growth and effective cost management, it also faced hurdles in international markets and online sales. Nevertheless, La-Z-Boy’s strategic investments and forward-looking plans position it well for future success, even amidst economic uncertainties.