Quarterly revenues are driven by strong performance in the retail side of the business
MONROE, Mich. — La-Z-Boy reported an increase in sales and net income for its third fiscal quarter ended Jan. 28.
The company reported $572.7 million in sales, up .2% from $571.6 million reported the same period of 2022. Net income was $31.7 million, or 74 cents per share, compared to $28.5 million, or 65 cents per share during the same period in 2022, a 22% increase.
Sales in the retail segment rose 27% during the quarter, to $251 million, from $197 million the same period in 2022. The company attributed this to improved service to consumers and closer to pre-pandemic lead times.
Retail segment GAAP and non-GAAP operating income rose 83% to a record $44 million. Operating income in the retail segment was $24.1 million the same period last year.
Total written same-store sales for the company-owned La-Z-Boy stores rose 8% and overall written same-store sales for the entire retail segment rose 3% and were 12% higher than pre-pandemic levels, the company said.
Sales in the wholesale segment fell 4% to $407.6 million, from $423.3 million last year. This was primarily due to a decline in delivered volume and partially offset by pricing and favorable channel and product mix.
The company said that non-GAAP operating margin in the wholesale segment improved to 6.6% as pricing and surcharges along with lower freight costs were mostly offset by an increase in marketing spend to pre-pandemic levels.
Overall operating income in the wholesale segment during the third quarter was $16.9 million, compared to $27.6 million the same period last year.
Other highlights of the report are as follows:
+ E-commerce division Joybird reported a 35% decrease in delivered sales to $29 million. The company also noted that written sales decreased 21%, “reflecting both slowing e-commerce trends and a reduction in marketing spend to align with consumer behavior and focus on efficient return on advertising spending.”
The division also posted a loss for the quarter, which the company said reflected lower delivered volume due to the written sales decline in FY Q2.
+ La-Z-Boy overall ended the quarter with $284 million in cash and no external debt.
+ Year to date, the company generated $127 million in cash from operating activities, including $96 million in the third quarter, versus $45 million in the prior-year nine-month period and $30 million in last year’s third quarter.
+ Year to date, the company also spent $57 million on capital expenditures which largely was related to La-Z-Boy Furniture Galleries, including new stores and remodels as well as Joybird store projects. It also made some upgrades to its manufacturing and distribution facilities.
Of the results, company President and CEO Melinda D. Whittington said, “We again delivered excellent results driven by productivity gains throughout our supply chain and superb performance in our company-owned Retail segment. During the quarter, we worked down the majority of our excess backlog, getting close to normal lead times, and continued to invest in marketing to increase awareness and consideration of the La-Z-Boy brand. I am particularly pleased with our positive written sales trends in our Retail stores, driven by strong execution of our value proposition — comfortable custom furniture with quick delivery.
“Across La-Z-Boy, we are capitalizing on and investing in our brand heritage of comfort,” she added. “We’re honing our messaging, investing in targeted marketing, sharpening price points and ensuring strong execution. As we move through this uncertain economic environment, we will continue to employ agility, a consumer-first focus and our strong financial position to make smart investments to drive capability and brand reach. I am confident we will emerge stronger and capture increased market share.”