On June 17, 2024, La-Z-Boy Inc (LZB, Financial) released its 8-K filing for the fourth quarter and full year results, showcasing a robust performance despite industry challenges. La-Z-Boy Inc is a U.S.-based company that manufactures, distributes, and retails upholstery furniture products, including the iconic reclining chairs. The company operates primarily in the United States, with secondary operations in Canada and other countries, and its reportable segments include Wholesale and Retail.
Performance Overview
La-Z-Boy Inc reported consolidated sales of $554 million for the fourth quarter, a slight decrease of 1% compared to the previous year but a significant 22% increase from the pre-pandemic fourth quarter of Fiscal 2019. The company's GAAP diluted earnings per share (EPS) stood at $0.91, surpassing the analyst estimate of $0.70. Non-GAAP diluted EPS was reported at $0.95.
For the full fiscal year, La-Z-Boy Inc achieved consolidated sales of $2.05 billion, with a GAAP diluted EPS of $2.83 and a Non-GAAP diluted EPS of $2.98, exceeding the annual analyst estimate of $2.62. The company generated $158 million in operating cash flow for the year and maintained a strong balance sheet with $341 million in cash and no external debt.
Key Financial Achievements
La-Z-Boy Inc's financial achievements are noteworthy in the furnishings, fixtures, and appliances industry, where maintaining profitability and cash flow is crucial. The company reported a gross margin expansion on both GAAP and Non-GAAP bases across all segments. Additionally, La-Z-Boy Inc returned $85 million to shareholders through share repurchases and dividends, including a 10% increase in the quarterly dividend to $0.20 in the third quarter.
Segment Performance
The Retail segment, which includes company-owned La-Z-Boy Furniture Galleries® stores, saw written sales increase by 1%, driven by growth from acquired and new stores. However, written same-store sales decreased by 5% due to lower traffic and a challenging economic environment. The Wholesale segment experienced a 1% decrease in sales, remaining relatively flat compared to the previous year.
Income Statement Highlights
| Metric | Q4 2024 | Q4 2023 | Change |
|---|---|---|---|
| Sales | $553.5 million | $561.3 million | (1)% |
| GAAP Operating Income | $50.1 million | $54.1 million | (7)% |
| Non-GAAP Operating Income | $52.1 million | $55.1 million | (5)% |
| GAAP Net Income | $39.3 million | $34.4 million | 14% |
| Non-GAAP Net Income | $40.8 million | $43.1 million | (5)% |
| GAAP Diluted EPS | $0.91 | $0.79 | 15% |
| Non-GAAP Diluted EPS | $0.95 | $0.99 | (4)% |
Balance Sheet and Cash Flow
La-Z-Boy Inc ended the fiscal year with $341 million in cash and no external debt. The company generated $158 million in cash from operating activities, including $53 million in the fourth quarter. Capital expenditures amounted to $54 million, primarily for new stores and remodels, as well as projects at manufacturing and distribution facilities.
Commentary and Outlook
"We are pleased with our strong finish to the fiscal year as fourth quarter results exceeded expectations. Wholesale unit volumes improved in the quarter and recovery from weather and related disruptions in January also provided a tailwind," said Melinda D. Whittington, President and Chief Executive Officer of La-Z-Boy Incorporated.
"Looking forward, in Fiscal 2025, we expect the industry to continue to be challenged, down by as much as 5%, with any improved industry trends occurring late in our fiscal year, towards calendar 2025, when expected interest rate cuts filter through the economy and begin to positively impact housing activity," added Bob Lucian, Chief Financial Officer of La-Z-Boy Incorporated.
La-Z-Boy Inc's performance in the fourth quarter and full fiscal year demonstrates its resilience and strategic execution in a challenging market environment. The company's strong financial position and continued focus on growth and profitability position it well for future success.
Explore the complete 8-K earnings release (here) from La-Z-Boy Inc for further details.
