La-Z-Boy Incorporated ((LZB)) has held its Q1 earnings call. Read on for the main highlights of the call.
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La-Z-Boy Incorporated’s latest earnings call painted a picture of strategic growth and robust financial management, tempered by some significant challenges. The company showcased its strategic expansions and strong cash flow, yet faced hurdles such as declining Joybird sales and retail margin compression due to a challenging consumer environment.
Retail and Wholesale Sales Growth
The earnings call revealed that La-Z-Boy’s Retail segment delivered a sales increase of 2%, with written sales up by 5%. The Wholesale segment also experienced growth, with delivered sales rising by 1%, driven by the core North American La-Z-Boy Wholesale business.
Strategic Expansion
La-Z-Boy announced significant strategic expansions, including the opening of two new company-owned Furniture Galleries and a landmark 15-store acquisition in the Southeast U.S. This acquisition marks the largest in the company’s history, signaling a bold move to expand its market presence.
Strong Operating Cash Flow
The company reported a strong operating cash flow of $36 million for the quarter, underscoring its effective financial management and operational efficiency.
Strong Balance Sheet
La-Z-Boy maintained a robust balance sheet, boasting $319 million in cash and no external debt, providing a solid foundation for future growth and investment.
Recognition as Top Retailer
In a testament to its market reputation, La-Z-Boy was named by Newsweek as one of America’s Best Retailers in 2025, achieving the top spot in the furniture category for the first time.
Supply Chain Transformation
The company successfully transitioned to a new Arizona distribution center, part of a multiyear project aimed at transforming its distribution network and enhancing supply chain agility.
Decline in Joybird Sales
Joybird, a subsidiary of La-Z-Boy, saw a significant decline in sales, with delivered sales dropping by 20% and written sales by 14% compared to the previous year, impacting the overall performance.
Retail Margin Compression
The Retail segment faced margin compression, with adjusted operating margin decreasing to 6.3% from 10.3%, attributed to de-leverage in same-store sales and investments in new store openings.
Challenging Consumer Environment
La-Z-Boy encountered a challenging consumer environment, affecting store traffic and related same-store sales in the Retail segment, posing a hurdle to growth.
Overall Sales Decline
Consolidated sales for the quarter were $492 million, a 1% decline from the prior year, primarily due to the downturn in Joybird sales.
Forward-Looking Guidance
Looking ahead, La-Z-Boy remains optimistic despite current challenges. The company projects fiscal second-quarter sales to range from $510 million to $530 million, with an adjusted operating margin between 4.5% and 6%. This guidance reflects confidence in its strategic initiatives and ability to outperform the industry.
In summary, La-Z-Boy’s earnings call highlighted a mix of strategic growth and financial strength, alongside challenges in specific segments. While the company faces hurdles such as declining Joybird sales and a tough consumer environment, its strategic expansions and strong financial management position it well for future growth.