La-Z-Boy Reports Strong Q4 Results, Shares Surge
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Source: seekingalpha
- Strong Performance: La-Z-Boy (LZB) reported Q4 revenue of $570.34 million, exceeding expectations by $1.11 million, with adjusted EPS of $1.26, surpassing estimates by $0.44, demonstrating the company's resilience in a challenging market.
- Margin Improvement: The company expanded its operating margin by 200 basis points to 7.2% and adjusted operating margin by 50 basis points to 9.9%, driven by efficient inventory and expense management, enhancing its competitive position in a soft industry.
- Sales Growth: Retail segment sales increased by 11% year-over-year, offsetting declines in wholesale sales, which kept total revenue flat compared to last year, showcasing the company's adaptability and strength in the face of market challenges.
- Future Outlook: La-Z-Boy expects a 4% sales growth for the current fiscal quarter, with revenue projected between $490 million and $510 million, above market estimates, while a new $300 million share repurchase agreement is set to bolster investor confidence.
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Analyst Views on LZB
Wall Street analysts forecast LZB stock price to rise
2 Analyst Rating
2 Buy
0 Hold
0 Sell
Moderate Buy
Current: 40.240
Low
39.00
Averages
42.50
High
46.00
Current: 40.240
Low
39.00
Averages
42.50
High
46.00
About LZB
La-Z-Boy Incorporated is a vertically integrated retailer and manufacturer of custom furniture. The Company is engaged in retail, manufacturing, design, distribution and after-service care. Its Joybird brand is an omnichannel retailer and manufacturer of modern, custom upholstered furniture, operating over 15 United States stores. Its segments include Wholesale Segment, Retail Segment, Corporate and Other. The Wholesale segment consists primarily of four operating segments: La-Z-Boy, an England subsidiary; Casegoods operating segment that sells furniture under the brand Hammary; and the international operating segment, which includes international La-Z-Boy wholesale and manufacturing businesses. The Retail segment consists of one operating segment comprised of 226 company-owned La-Z-Boy Stores. It sells upholstered furniture, in addition to some casegoods and other home furnishings and accessories, to end consumers through the stores.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
La-Z-Boy Exceeds Expectations in Q4 Earnings Call
- Earnings Beat: La-Z-Boy reported adjusted earnings of $1.26 per share for Q4 FY2026, surpassing the Zacks consensus estimate of $0.82 by 53.7%, indicating strong profitability despite a soft furniture market.
- Retail Expansion Strategy: The company-owned retail segment saw written sales rise by 11% and delivered sales by 9% in Q4, driven by new store openings and acquisitions, demonstrating the effectiveness of its Century Vision strategy, with plans to increase store count from 230 to 450.
- Margin Improvement: The adjusted operating margin increased from 9.4% to 9.9% year-over-year, with retail and wholesale margins at 13.9% and 10.1% respectively; however, management cautioned that some margin strength may not be sustainable, requiring careful consideration.
- Cautious Future Outlook: Management projects Q1 FY2027 sales between $490 million and $510 million, with an adjusted operating margin of 4% to 5.5%, noting that the first quarter is typically the weakest due to lower industry demand and a planned plant shutdown.
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- Economic Data Support: Despite the market downturn, US May retail sales rose by 0.9% month-over-month, surpassing expectations of 0.6%, indicating resilient consumer demand, while pending home sales increased by 3.8% month-over-month, marking the largest gain in 20 months, potentially providing some support to the market.
- Fed Policy Outlook: The Fed maintained interest rates at its meeting on Wednesday but indicated through its dot plot that at least one more 25 basis point hike is expected this year, with the 2026 year-end federal funds rate projection raised to 3.75%, reflecting a cautious outlook on future economic conditions.
- International Market Response: While US stocks declined, overseas markets performed strongly, with the Euro Stoxx 50 reaching a new record high and closing up 0.68%, demonstrating global investor confidence in economic recovery, which may contrast with the US market's performance.
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La-Z-Boy Reports 9% Retail Sales Growth in Q4
- Retail Sales Growth: La-Z-Boy reported a 9% increase in retail sales for Q4, driven by acquisitions and new store openings, indicating strong market performance and expansion potential.
- Operating Cash Flow Increase: The company generated $204 million in operating cash flow, up 9% year-over-year, which not only enhances financial flexibility but also provides funding for future investments and expansion.
- Record New Store Openings: La-Z-Boy opened a net total of 15 new stores during the fiscal year, marking the highest number in company history, reflecting its robust expansion capability and quick response to consumer demand.
- Strong Financial Position: With over $300 million in cash and no external debt, the company demonstrates a solid financial health that supports future strategic investments and competitive positioning in the market.
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- High-Frequency Contracts: Within AMC, the $3 strike call option has been particularly active, with 48,431 contracts traded today, equating to approximately 4.8 million shares, reflecting market expectations for future price increases.
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- Key Contract Analysis: For Salesforce, the $230 strike put option saw a trading volume of 15,004 contracts, approximately 1.5 million shares, indicating market caution regarding potential downside risks, which may influence investor decisions.
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La-Z-Boy Reports Strong Q4 2026 Earnings with Strategic Expansion Plans
- Significant Sales Growth: La-Z-Boy reported Q4 2026 sales of $570 million, a 9% increase year-over-year, with retail sales reaching $270 million and retail adjusted operating margin strengthening to 13.9%, indicating robust performance and a recovery in market demand.
- Cash Flow and Shareholder Returns: The company generated $204 million in operating cash flow for FY2026, returning $85 million to shareholders through buybacks and dividends, showcasing strong cash generation capabilities while maintaining $303 million in cash with no external debt.
- Clear Expansion Plans: Management outlined plans to open approximately 10 new La-Z-Boy stores annually and has signed an agreement to acquire a 3-store network in Florida and Alabama, expected to close by the end of June, further solidifying its market position.
- Cautious Future Outlook: While management remains optimistic about future sales, guiding Q1 sales between $490 million and $510 million, they acknowledged ongoing “choppy” consumer behavior and rising input costs, necessitating close monitoring of market dynamics.
See More
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- Strong Economic Data: US May retail sales rose 0.9% month-over-month, exceeding expectations of 0.6%, indicating resilient consumer demand that could positively impact future spending and economic recovery.
- Housing Market Recovery: Pending home sales in May increased by 3.8% month-over-month, significantly surpassing the expected 0.9%, marking the largest gain in 20 months, suggesting a rebound in the real estate market that may stimulate growth in related sectors.
- Oil Price Volatility: The agreement between the US and Iran to reopen the Strait of Hormuz has driven crude oil prices down to a 3.5-month low, increasing risk-on sentiment in the market, which may lead investors to reassess the risks and returns of energy-related assets.
- FOMC Meeting Focus: The market anticipates that the Federal Reserve will keep interest rates unchanged, but the press conference by new Chair Kevin Warsh will be pivotal, as investors closely watch his outlook on inflation to guide future investment decisions.
See More
La-Z-Boy Exceeds Expectations in Q4 Earnings Call
- Earnings Beat: La-Z-Boy reported adjusted earnings of $1.26 per share for Q4 FY2026, surpassing the Zacks consensus estimate of $0.82 by 53.7%, indicating strong profitability despite a soft furniture market.
- Retail Expansion Strategy: The company-owned retail segment saw written sales rise by 11% and delivered sales by 9% in Q4, driven by new store openings and acquisitions, demonstrating the effectiveness of its Century Vision strategy, with plans to increase store count from 230 to 450.
- Margin Improvement: The adjusted operating margin increased from 9.4% to 9.9% year-over-year, with retail and wholesale margins at 13.9% and 10.1% respectively; however, management cautioned that some margin strength may not be sustainable, requiring careful consideration.
- Cautious Future Outlook: Management projects Q1 FY2027 sales between $490 million and $510 million, with an adjusted operating margin of 4% to 5.5%, noting that the first quarter is typically the weakest due to lower industry demand and a planned plant shutdown.
See More
US Stocks Plunge as Tech Sector Weighs Down Market
- Market Weakness: On Wednesday, the S&P 500 Index fell by 1.21%, the Dow Jones Industrial Average dropped by 0.98%, and the Nasdaq 100 Index declined by 0.99%, reflecting market concerns over potential interest rate hikes by the Fed, particularly amid weak performance in technology stocks.
- Economic Data Support: Despite the market downturn, US May retail sales rose by 0.9% month-over-month, surpassing expectations of 0.6%, indicating resilient consumer demand, while pending home sales increased by 3.8% month-over-month, marking the largest gain in 20 months, potentially providing some support to the market.
- Fed Policy Outlook: The Fed maintained interest rates at its meeting on Wednesday but indicated through its dot plot that at least one more 25 basis point hike is expected this year, with the 2026 year-end federal funds rate projection raised to 3.75%, reflecting a cautious outlook on future economic conditions.
- International Market Response: While US stocks declined, overseas markets performed strongly, with the Euro Stoxx 50 reaching a new record high and closing up 0.68%, demonstrating global investor confidence in economic recovery, which may contrast with the US market's performance.
See More
La-Z-Boy Reports 9% Retail Sales Growth in Q4
- Retail Sales Growth: La-Z-Boy reported a 9% increase in retail sales for Q4, driven by acquisitions and new store openings, indicating strong market performance and expansion potential.
- Operating Cash Flow Increase: The company generated $204 million in operating cash flow, up 9% year-over-year, which not only enhances financial flexibility but also provides funding for future investments and expansion.
- Record New Store Openings: La-Z-Boy opened a net total of 15 new stores during the fiscal year, marking the highest number in company history, reflecting its robust expansion capability and quick response to consumer demand.
- Strong Financial Position: With over $300 million in cash and no external debt, the company demonstrates a solid financial health that supports future strategic investments and competitive positioning in the market.
See More
Surge in Options Trading Volume for AMC and Salesforce
- AMC Options Volume: AMC Entertainment Holdings Inc. saw options trading volume of 297,892 contracts today, representing approximately 29.8 million shares, which is about 78.9% of its average daily trading volume over the past month, indicating strong investor interest in the stock.
- High-Frequency Contracts: Within AMC, the $3 strike call option has been particularly active, with 48,431 contracts traded today, equating to approximately 4.8 million shares, reflecting market expectations for future price increases.
- Salesforce Options Activity: Salesforce Inc. also experienced significant options trading, with 115,342 contracts traded today, representing around 11.5 million shares, which is 70.6% of its average daily trading volume over the past month, highlighting investor focus on its stock price volatility.
- Key Contract Analysis: For Salesforce, the $230 strike put option saw a trading volume of 15,004 contracts, approximately 1.5 million shares, indicating market caution regarding potential downside risks, which may influence investor decisions.
See More
La-Z-Boy Reports Strong Q4 2026 Earnings with Strategic Expansion Plans
- Significant Sales Growth: La-Z-Boy reported Q4 2026 sales of $570 million, a 9% increase year-over-year, with retail sales reaching $270 million and retail adjusted operating margin strengthening to 13.9%, indicating robust performance and a recovery in market demand.
- Cash Flow and Shareholder Returns: The company generated $204 million in operating cash flow for FY2026, returning $85 million to shareholders through buybacks and dividends, showcasing strong cash generation capabilities while maintaining $303 million in cash with no external debt.
- Clear Expansion Plans: Management outlined plans to open approximately 10 new La-Z-Boy stores annually and has signed an agreement to acquire a 3-store network in Florida and Alabama, expected to close by the end of June, further solidifying its market position.
- Cautious Future Outlook: While management remains optimistic about future sales, guiding Q1 sales between $490 million and $510 million, they acknowledged ongoing “choppy” consumer behavior and rising input costs, necessitating close monitoring of market dynamics.
See More
Mixed Performance in US Stock Indices, Chipmakers Lead Gains
- Strong Economic Data: US May retail sales rose 0.9% month-over-month, exceeding expectations of 0.6%, indicating resilient consumer demand that could positively impact future spending and economic recovery.
- Housing Market Recovery: Pending home sales in May increased by 3.8% month-over-month, significantly surpassing the expected 0.9%, marking the largest gain in 20 months, suggesting a rebound in the real estate market that may stimulate growth in related sectors.
- Oil Price Volatility: The agreement between the US and Iran to reopen the Strait of Hormuz has driven crude oil prices down to a 3.5-month low, increasing risk-on sentiment in the market, which may lead investors to reassess the risks and returns of energy-related assets.
- FOMC Meeting Focus: The market anticipates that the Federal Reserve will keep interest rates unchanged, but the press conference by new Chair Kevin Warsh will be pivotal, as investors closely watch his outlook on inflation to guide future investment decisions.
See More
