Q1 2027 La-Z-Boy Inc Earnings Call Transcript
Key Points
- Retail segment written sales increased 16% with positive written same-store sales growth of 3%, driven by excellent in-store execution.
- Added 4 company-owned stores during the quarter, expanding the retail footprint to 234 company-owned stores (62% of the network), with a signed agreement for 2 more acquisitions.
- Strong balance sheet with $267 million in cash and no external debt, while returning $35 million to shareholders, a 62% increase year-over-year.
- Gross margin increased 290 basis points, driven by favorable mix shift toward retail and tariff benefits including IEEPA refunds.
- Over 90% of upholstered production is U.S.-based, providing a competitive advantage in managing tariff volatility and offering 4-6 week delivery times.
- Consolidated delivered sales declined 1% (excluding Casegoods divestitures) due to lower wholesale and Joybird sales.
- Wholesale segment delivered sales decreased 9% (down 5% adjusting for divestitures), impacted by uneven order patterns and fixed cost deleverage.
- Joybird written sales decreased 17%, with continued consumer volatility and a drag on enterprise results.
- Adjusted operating margin declined to 3.9% from 4.8%, due to expense deleverage on lower wholesale and Joybird volumes.
- Second quarter guidance reflects a cautious outlook with adjusted operating margin of 4% to 5.5%, impacted by incremental investments, friction costs, and a non-repeating warranty benefit.
Good morning, everyone, and welcome to the La-Z-Boy Fiscal 2027 first quarter conference call. (Operator Instructions) Please note, this conference is being recorded. I will now turn the call over to your host, Mark Becks, Director of Investor Relations and Corporate Development at La-Z-Boy, Inc. Mark, the floor is yours.
Thank you, Jenny. Good morning, everyone, and thanks for joining us to discuss our fiscal 2027 first quarter. Joining me on today's call are Melinda Whittington, La-Z-Boy Inc. Board Chair, President and Chief Executive Officer; and Taylor Luebke, SVP and CFO. Melinda will open and close the call, and Taylor will speak to segment performance and the financials midway through.
After our prepared remarks, we will open the line for questions. Slides will accompany this presentation, and you may view them through our webcast link, which will be available for 1 year. And a telephone replay of the call will be available for 1 week beginning this afternoon.
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