La-Z-Boy Incorporated Reports Fiscal 2025 Second Quarter Financial Results
La-Z-Boy Incorporated (NYSE:LZB), a global leader in the retail and manufacture of residential furniture, announced its financial results for the fiscal 2025 second quarter, which ended on October 26, 2024.
Key Financial Metrics:
| Metric | Fiscal 2025 Q2 | Fiscal 2024 Q2 | YoY Change | Consensus Estimates |
|---|---|---|---|---|
| Revenue | $521 million | $510.8 million | +2% | $505.98 million |
| EPS (GAAP & Non-GAAP) | $0.71 | $0.63/$0.74 | +12.7%/-4.1% | $0.64 |
| Operating Margin (GAAP) | 7.4% | 6.6% | +0.8 pp | Not Provided |
| Operating Margin (Non-GAAP) | 7.5% | 7.9% | -0.4 pp | Not Provided |
Interpretation: La-Z-Boy's revenue for fiscal Q2 2025 grew by 2% year-over-year, surpassing the consensus estimate of $505.98 million. The company's EPS of $0.71 also exceeded analysts' expectations of $0.64. Despite an increase in GAAP operating margin to 7.4%, the Non-GAAP operating margin slightly declined due to challenges in the international wholesale business and casegoods import segment.
Revenue Performance Across Major Segments:
| Segment | Sales Fiscal 2025 Q2 | YoY Change |
|---|---|---|
| Retail | $222 million | +3% |
| Wholesale | $364 million | Roughly flat |
| Joybird | $39 million | Delivered sales +20% |
Interpretation: The Retail segment experienced 3% sales growth, largely driven by the acquisition of new stores and strong Labor Day sales. The Wholesale segment remained stable, with performance offset by international challenges. Joybird's delivered sales surged by 20%, reflecting firm demand in both online and retail channels.
Key Developments and Operational Highlights: - Retail segment sales increased by 3%, led by acquisitions and new stores. - GAAP and Non-GAAP diluted EPS of $0.71, exceeding guidance. - Company-owned La-Z-Boy Furniture Galleries® network expanded by five stores. - The quarterly dividend increased to $0.22, a 10% rise from the previous rate.
Management Comments: Melinda D. Whittington, President and CEO, highlighted the company's strong execution in a challenging macroeconomic environment, emphasizing strategic progress and the improvement in conversion rates, average ticket, and design sales. Ms. Whittington underlines the endurance of La-Z-Boy’s craftsmanship and customization as key differentiators for long-term growth.
Dividends and Share Repurchase Program: La-Z-Boy's Board of Directors declared a quarterly cash dividend of $0.22 per share, reflecting a 10% increase. Year-to-date, the company has returned approximately $70 million to shareholders, nearly double the prior year's period, including $19 million in share repurchases.
Forward Guidance: Looking ahead to the third quarter, La-Z-Boy forecasts sales between $505-525 million, representing a 1-5% year-over-year increase. The company anticipates a Non-GAAP operating margin of 6-7%, balancing consumer demand challenges with internal strategic initiatives.
Stock Price Movement: Following the earnings announcement, La-Z-Boy's stock experienced a slight decline of 1.075%.
Overall, La-Z-Boy shows resilience and growth in its core segments alongside strategic financial management, positioning itself favorably despite industry challenges.
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