by Company reports 13% decline in consolidated revenues during the quarter ended Jan. 27
MONROE, Mich. — La-Z-Boy reported consolidated sales of just over $500 million for its third quarter ended Jan. 27, a 13% decrease compared to the same period in 2023.
The company said that this compares to last year’s third quarter, which benefited from the delivery of pandemic-related backlogs. Officials also noted that the latest third-quarter results were negatively impacted by harsh winter weather in January that caused temporary shutdowns of its U.S. manufacturing facilities, along with delivery delays and reduced store traffic through much of the central U.S.
Meanwhile, the company said, written same-store sales for its La-Z-Boy Furniture Galleries network decreased 6% compared to the same period last year. Company-owned store sales were down 8%, during what the company described as a “challenged consumer environment.” The numbers also were impacted by winter weather events that negatively impacted store traffic in January despite positive same-store sales across the entire network in November and December. The company said the overall decrease was also “partially offset by strong execution that drove higher ticket and conversion rates.”
Overall sales for the quarter totaled $500.4 million, compared to $572.7 million the same period in 2023. GAAP net income totaled $28.6 million, or 66 cents per share, down 10% compared to $31.7 million, or 74 cents per share, last year.
Consolidated GAAP operating income totaled $32.6 million, compared to $42.8 million the same period last year. Operating margins were 6.5% during the quarter on a GAAP basis compared to 7.5% last year.
Delivered sales on the retail side of the business declined 18% to $205 million compared to last year’s sales of $251.2 million, but rose 22% compared to the most recent pre-pandemic third quarter of fiscal year 2020. Again, the company noted, sales were impacted by January winter weather events that caused delivery delays and reduced store traffic throughout the central U.S.
GAAP operating margin and operating income on the retail side of the business was 10.9% and $22 million, versus 17.6% and $44 million respectively.
On the wholesale side of the business, sales totaled $356 million, down 13% from $407.6 million last year. This was due to a decline in delivered volume compared to a year ago, which the company said benefited from pandemic-related backlog and production and deliveries. The company added that volume also was negatively impacted by winter weather in January.
GAAP operating margins in the wholesale segment rose to 6.4% versus 4.2% the same period last year, and operating income rose to $22.7 million, compared to $16.9 million the same period last year.
Other highlights of the report were as follows:
+ Written sales for the Joybird segment decreased 14%, which the company said reflected challenging e-commerce trends across the industry. Meanwhile delivered sales rose 18% to $34 million, “reflecting improvement from a challenged base period. Joybird made meaningful progress on improving profitability in the quarter with improved product mix and return on advertising spending.”
+ The company ended the quarter with $333 million in cash and no external debt and generated $48 million from operating activities.
+ Cash flow from operations year to date was $105 million, down 17% from last year, which the company said benefited from pandemic backlog.
+ The company also invested $12 million in capital expenditures which was largely related to La-Z-Boy Furniture Galleries, including new stores and remodels along with projects at its manufacturing and distribution facilities.
+ The company said it returned $29 million to shareholders, including $20 million in share repurchases and $9 million in dividends.
Melinda D. Whittington, president and chief executive officer, said that the company remains optimistic about “the mid-to-long-term growth potential for our industry, given structural housing shortages and the expectation of improvements in interest rates and housing affordability, and our ability to disproportionately grow with the consumer. In the near term, despite the furniture and home furnishings industry being in a sustained slowdown, our La-Z-Boy Furniture Galleries network is executing well.”
She noted that following weather-related disruptions in January, production and deliveries are now back to normal “as we focus on servicing our customers and consumers with the high-quality, comfortable products they expect from us.”
She said that La-Z-Boy also continues to make progress on its Century Vision strategy, as it completed the acquisition of a six-store network in the Midwest, which brings its company-owned store network to 184, out of a total of 353. In addition, the company also recently signed an agreement to acquire an additional two stores from an independent La-Z-Boy Furniture Galleries dealer in the South.
“Our company-owned store base now represents 52% of our total network, compared to 32% a decade ago,” she said. “While the market remains challenging and volatile, we are confident in our ability to leverage our strong financial position to outperform the market over the longer term. This includes expanding our La-Z-Boy brand reach with data-based consumer insights driving our marketing and product design, investing in our growing company-owned retail store base, and increasing the agility of our supply chain. With our customized product primarily manufactured in the U.S., our vertically integrated model serves as a key differentiator in the industry.”
