On November 29, 2023, La-Z-Boy Inc (LZB, Financial) released its 8-K filing, detailing the financial outcomes for the second quarter of fiscal year 2024. The company faced a challenging quarter with a 16% decrease in sales year over year, attributed to a high comparison base from the previous year that included pandemic-related backlog deliveries. Despite these challenges, La-Z-Boy Inc (LZB) managed to increase its written same-store sales by 1% within its Furniture Galleries® network.
Financial Performance Overview
La-Z-Boy Inc (LZB, Financial) reported a GAAP operating margin of 6.6% and a Non-GAAP operating margin of 7.9%, surpassing the guidance provided in the previous quarter. The GAAP net income attributable to La-Z-Boy Inc (LZB) saw a 41% decrease to $27.2 million, while Non-GAAP net income decreased by 29% to $32.3 million. The diluted earnings per share (EPS) on a GAAP basis was $0.63, a 41% decline from the previous year, and the Non-GAAP diluted EPS was $0.74, down 30%.
Income Statement and Balance Sheet Highlights
The consolidated statement of income shows a stark contrast in sales, with a 16% decline to $511.4 million compared to the same quarter last year. The cost of sales was $288.8 million, resulting in a gross profit of $222.6 million. Selling, general, and administrative expenses amounted to $189 million, leading to an operating income of $33.6 million.
La-Z-Boy Inc (LZB, Financial)'s balance sheet remains robust, ending the quarter with $329.6 million in cash and equivalents and no external debt. The total current assets stood at $841 million, with total assets amounting to $1.88 billion. Shareholders' equity was reported at $964.3 million.
Cash Flow and Dividends
The company's cash flow from operations was notably strong, with a year-to-date figure of $57 million, an 84% increase from the previous year. Capital expenditures were $26.5 million, and the free cash flow for the six months ended October 28, 2023, was $30.4 million. Reflecting confidence in its financial position, La-Z-Boy Inc (LZB, Financial) increased its quarterly dividend by 10% to $0.20 per share.
Management's Commentary
Melinda D. Whittington, President and CEO, commented on the company's resilience amidst market headwinds, citing strong execution in retail stores and supply chain. She emphasized the company's long-term strategy, including the recent acquisition of six stores and the launch of the "Long Live the Lazy" brand campaign. CFO Bob Lucian provided a cautious outlook for the third quarter, expecting sales and Non-GAAP operating margin to be consistent with the first half of the fiscal year.
Future Outlook
While La-Z-Boy Inc (LZB, Financial) anticipates continued challenges in consumer trends, the company is positioned to maintain its industry outperformance. With a strong balance sheet and strategic investments in its business, La-Z-Boy Inc (LZB) aims to achieve long-term growth and double-digit operating margins.
Investors and stakeholders are encouraged to review the full 8-K filing for a more detailed understanding of La-Z-Boy Inc (LZB, Financial)'s financial performance and strategic direction.
Explore the complete 8-K earnings release (here) from La-Z-Boy Inc for further details.
