by Despite ongoing challenges in the housing market, the company remains profitable and maintains an operating cash flow of $158 million
MONROE, Mich. — Citing a slow housing market that continues to be hampered by high interest rates, La-Z-Boy reported a 1% drop in sales for its fiscal fourth quarter and a 13% decline for the full fiscal year ended April 27.
Total sales for the quarter were $553.5 million, down 1% from the $561.3 million reported the same period last year. For the full year, sales totaled $2.05 billion, down 13% from $2.3 billion reported last year.
Still, the company remains profitable, with an increase in earnings for the quarter. Net income totaled $40.3 million, or 91 cents per share, up 16.4% from $34.6 million, or 79 cents per share, the same period last year.
For the full year, net income totaled $124.6 million, or $2.83 per share, down 17.9% from the $151.9 million, or $3.48 per share, the same period last year.
Fourth-quarter sales in the wholesale segment totaled $392.5 million, compared to $394.6 million for the same period last year, and operating income totaled $31.7 million, compared to $33.7 million the same period last year.
For the full year, the wholesale segment generated $1.44 billion in sales, compared to $1.7 billion the year prior. Operating income totaled $99.4 million during the fourth quarter, compared to $115.2 million last year.
For the quarter, the retail segment had $227.9 million in sales compared to $242.7 million the same period last year. Operating income totaled $32.2 million, compared to $37.7 million the same period last year.
For the full year, the retail segment reported $855.1 million in sales compared to $982 million the same period last year. Operating income totaled $111.7 million, compared with $161.6 million the year prior.
Consolidated operating income totaled $50.1 million for the quarter compared to $54.1 million the same period last year. For the full fiscal year, consolidated operating income totaled $150.8 million, compared with $211.4 million last year.
Nonetheless, the company said that written sales again outperformed the industry, with total Q4 written sales for company-owned La-Z-Boy Furniture Galleries up 1% compared to last year and written same-store sales down just 5% from last year. The company said that written same-store sales for the entire La-Z-Boy Furniture Galleries network were down 3% from the same period last year.
“Trends were strongest in the first half of the quarter around key holiday events and recovery from January weather events,” the company said. “Written sales results continue to outperform the broader industry, which was down 8% for the quarter, as furniture and home furnishings spending remains depressed with overall traffic trends challenged and housing activity down due to continued higher interest rates.”
Company President and CEO Melinda Whittington said that the company had a strong finish to the fiscal year as Q4 results exceeded expectations.
“Wholesale unit volumes improved in the quarter, and recovery from weather and related disruptions in January also provided a tailwind,” she said, adding, “The industry continues to grapple with higher for longer interest rates and housing turnover near 30-year lows negatively impacting store traffic. However, our execution is the strongest it has ever been, including conversion rates at all-time highs and average ticket and design sales trending up for the year. We expect industry fundamentals to remain volatile for the near term, but remain confident in our ability to outperform the market and gain share longer term. Our first quarter is off to a good start, and we are encouraged by our solid Memorial Day results as we believe our assortment and best-in-class motion offerings are resonating with consumers in the marketplace.”
She also noted that during the quarter, the company expanded its total La-Z-Boy Furniture Galleries store network and the number of company-owned stores, with the opening of six new company-owned stores and the acquisition of 11 independent Furniture Galleries. Company-owned retail stores now represent more than half of the total La-Z-Boy Furniture Galleries network for the first time in company history, the report noted.
“We also invested in both our stores and manufacturing operations through remodels and improving the agility of our supply chain,” Whittington said. “As a market leader in comfortable custom furniture with quick delivery, we are positioned to continue to outperform the industry and grow share. Our focus remains on executing our proven playbook of expanding our Retail segment through new and acquired stores, delivering sales growth double the industry, and driving margin expansion. I want to thank all of our dedicated employees for their strong contributions throughout the year. The momentum in our business is palpable, particularly with our strong merchandising offerings and new “Long Live the Lazy” brand campaign building awareness, consideration and purchase intent. We are excited to build further on this foundation in fiscal 2025.”
Other highlights of its recently completed fourth quarter and full fiscal year are as follows:
+ For Q4, the company reported consolidated delivered sales of $554 million, up 22% compared to its most recent fiscal 2019 pre-pandemic fourth quarter.
+ It also said it generated $53 million in operating cash flow for the quarter.
+ During the quarter, it grew its company-owned La-Z-Boy Furniture Galleries network by three stores including two stores it acquired.
+ It also reported generating $158 million in operating cash flow for the year.
+ Its balance sheet includes $341 million in cash and no external debt.
+ The company said it also returned $85 million to shareholders through share repurchases and dividends.
