Fiscal 2027 First Quarter
Filed Aug 18, 2026La-Z-Boy Incorporated Reports First Quarter Results; Retail Momentum With Positive Written Same-Store Sales
Retail delivered sales, written sales, and operating margins improved, but consolidated sales declined, Wholesale and Joybird volume weakened, adjusted operating income and adjusted EPS declined, and GAAP results were a loss after plant-exit, divestiture, pension, and transformation charges.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Consolidated salesGAAP | $475,689 (amounts in thousands) | – | (3)% |
| Consolidated sales excluding wholesale casegoods divestitureother | $476 million | – | down 1% |
| Cost of salesGAAP | $267,025 (amounts in thousands) | – | – |
| Gross profitGAAP | $208,664 (amounts in thousands) | – | – |
| Adjusted gross profitnon-GAAP | $217,319 (amounts in thousands) | – | – |
| Selling, general and administrative expenseGAAP | $210,768 (amounts in thousands) | – | – |
| Adjusted selling, general and administrative expensenon-GAAP | $198,619 (amounts in thousands) | – | – |
| Operating income (loss)GAAP | $(2,104) (amounts in thousands) | – | (110)% |
| Adjusted operating incomenon-GAAP | $18,700 (amounts in thousands) | – | (20)% |
| Operating marginGAAP | (0.4)% | – | (490) bps |
| Adjusted operating marginnon-GAAP | 3.9% | – | (90) bps |
| Income (loss) before income taxesGAAP | $(3,661) (amounts in thousands) | – | – |
| Income tax expense (benefit)GAAP | $(1,677) (amounts in thousands) | – | – |
| Net income (loss)GAAP | $(1,984) (amounts in thousands) | – | – |
| Net income (loss) attributable to La-Z-Boy IncorporatedGAAP | $(2,292) (amounts in thousands) | – | (113)% |
| Adjusted net income attributable to La-Z-Boy Incorporatednon-GAAP | $17,360 (amounts in thousands) | – | (10)% |
| Basic weighted average common sharesGAAP | 39,995 (amounts in thousands) | – | – |
| Diluted weighted average common sharesGAAP | 39,995 (amounts in thousands) | – | – |
| Basic net income (loss) attributable to La-Z-Boy Incorporated per shareGAAP | $(0.06) | – | – |
| Diluted earnings per shareGAAP | $(0.06) | – | (114)% |
| Adjusted diluted earnings per sharenon-GAAP | $0.43 | – | (9)% |
| Operating cash flowGAAP | $15,648 (amounts in thousands) | – | – |
| Capital expendituresGAAP | $(23,284) (amounts in thousands) | – | – |
| Free cash flowother | $(7,636) (amounts in thousands) | – | – |
| Cash and cash equivalentsGAAP | $267,254 (amounts in thousands) | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| RetailDelivered sales increased primarily due to growth from acquired and new stores. Total written sales increased 16%, while written same-store sales grew 3%, driven by increased design sales, conversion rates, and average ticket. | $228,555 (amounts in thousands) | – | 10% |
| WholesaleSales were impacted by flow through of uneven order patterns throughout the quarter. Sales were down 5% adjusting for the May divestiture of the casegoods businesses, while order backlog was solid entering the second quarter. | $322,946 (amounts in thousands) | – | (9)% |
| Corporate and OtherJoybird written sales decreased 17% and delivered sales decreased 4% to $27 million on lower delivered volume as this consumer segment continued to be particularly volatile against the current macroeconomic backdrop. | $30,025 (amounts in thousands) | – | – |
Fiscal 2027 Second Quarter outlook
- Revenue$500-$520 million
- NoteEnterprise sales growth of -1% to positive 2%, excluding the impact of wholesale casegoods divestiture.
- NoteAdjusted operating margin in the range of 4.0-5.5%.
Capital returns
- $25,144 (amounts in thousands) in share repurchases, compared with $12,505 (amounts in thousands) in the prior-year quarter.
- $9,672 (amounts in thousands) in dividends, compared with $9,012 (amounts in thousands) in the prior-year quarter.
- Cash returns to shareholders were $34,816 (amounts in thousands), compared with $21,517 (amounts in thousands), a 62% increase versus the prior year.
- The Board declared a quarterly cash dividend of $0.242 per share on August 18, 2026, payable on September 15, 2026, to shareholders of record on September 3, 2026.
What drove it
- Retail delivered sales increased 10% to $229 million, and total Retail written sales increased 16%.
- Retail written same-store sales grew 3% year over year and represented a 500 bps sequential improvement versus the fourth quarter.
- Retail margin expansion reflected the positive impact of acquisitions.
- Wholesale adjusted operating margin reflected fixed-cost deleverage on lower delivered sales volume, partially offset by favorable tariff impact, including IEEPA refunds and pricing actions net of tariff costs.
- The company completed the divestiture of its wholesale casegoods businesses in May.
- The company added four company-owned stores, comprising one new store and three acquired stores, and signed an agreement to acquire two additional independent La-Z-Boy Stores.
- The company concluded production at one of two planned plant closures and continued its distribution and home delivery transformation.
Concerns
- Consolidated sales declined 3%, or 1% excluding the impact of the wholesale casegoods divestiture, as Retail growth was offset by lower delivered volume in Wholesale and Joybird.
- Consolidated GAAP operating margin fell to (0.4)% from 4.5%, while adjusted operating margin declined to 3.9% from 4.8%.
- Wholesale sales decreased 9% on a reported basis and Wholesale adjusted operating margin declined to 6.8% from 7.5%.
- Joybird written sales decreased 17% and delivered sales decreased 4%.
- GAAP results included $17.6 million pre-tax of charges related to the exit of two manufacturing facilities, $4.1 million pre-tax of pension termination charges, and $2.6 million pre-tax of charges related to the casegoods divestiture.
- Second-quarter adjusted operating-margin guidance incorporates near-term investments and friction costs related to new stores, advertising, strategic pricing, digital transformation, plant-footprint optimization, and distribution and home delivery transformation.
What to watch
- Whether solid Wholesale backlog entering the second quarter converts into delivered sales after uneven order patterns in the first quarter.
- Sustainability of Retail written same-store sales growth, conversion rates, design sales, and average ticket.
- Progress on company-owned store expansion, acquisitions of independent dealers, and the agreement to acquire two additional independent La-Z-Boy Stores.
- Margin effects from fixed-cost deleverage, tariff developments and IEEPA refunds, strategic pricing, and transformation investments.
- Execution and charges associated with the remaining planned plant closure, distribution and home delivery transformation, and wholesale casegoods divestiture.
Balance sheet and cash flow
- Ended the quarter with $267 million in cash and no external debt.
- Cash and cash equivalents were $267,254 (amounts in thousands) at July 25, 2026, versus $303,213 (amounts in thousands) at April 25, 2026.
- Operating cash flow was $15,648 (amounts in thousands), versus $36,292 (amounts in thousands) in the prior-year quarter.
- Operating cash flow was $27 million excluding an $11 million payment to terminate a legacy retirement plan, offset in investing activities with proceeds from sale of investments, netting to zero cash impact to the company.
- Capital expenditures were $23,284 (amounts in thousands), primarily related to distribution and home delivery transformation, manufacturing-related investments, and La-Z-Boy stores including new stores and remodels.
- Acquisitions were $15,650 (amounts in thousands).
- Free cash flow was $(7,636) (amounts in thousands), versus $17,831 (amounts in thousands) in the prior-year quarter.
- Net cash used for investing activities was $(12,986) (amounts in thousands); net cash used for financing activities was $(38,110) (amounts in thousands).
Analysis
La-Z-Boy reported a mixed fiscal 2027 first quarter. Consolidated sales were $475,689 (amounts in thousands), down 3%, and were down 1% excluding the May wholesale casegoods divestiture. The underlying performance was divided sharply between Retail and the other businesses. Retail delivered sales increased 10% to $229 million, total written sales increased 16%, and written same-store sales grew 3%, supported by design sales, conversion rates, and average ticket. Wholesale delivered sales declined amid uneven order patterns, while Joybird delivered and written sales also declined.
The sales mix favored the company-owned Retail operation, where GAAP operating margin improved to 6.4% from 6.3% and adjusted operating margin improved to 6.5% from 6.3%. Wholesale GAAP operating margin fell to 2.1% from 7.1%, and adjusted operating margin fell to 6.8% from 7.5%, with fixed-cost deleverage on reduced delivered volume only partly offset by tariff-related benefits and pricing actions. Corporate & Other adjusted operating loss also increased, primarily because of lower Joybird delivered sales. These pressures reduced consolidated adjusted operating income to $18,700 (amounts in thousands) from $23,495 (amounts in thousands) and adjusted operating margin to 3.9% from 4.8%.
GAAP profitability was materially affected by restructuring and other one-time items. The company reported a GAAP operating loss of $(2,104) (amounts in thousands) and GAAP diluted EPS of $(0.06), compared with GAAP operating income of $21,987 (amounts in thousands) and EPS of $0.44 in the prior-year quarter. Adjusted diluted EPS was $0.43, down from $0.47. Fiscal 2027 first-quarter adjustments included $17.6 million pre-tax of plant-exit charges, $4.1 million pre-tax of pension termination charges, $2.6 million pre-tax of casegoods-divestiture charges, and smaller purchase-accounting and distribution-transformation charges.
Cash generation was lower year over year, with operating cash flow of $15,648 (amounts in thousands) and free cash flow of $(7,636) (amounts in thousands), after $23,284 (amounts in thousands) of capital expenditures and $15,650 (amounts in thousands) of acquisitions. The company ended the quarter with $267 million in cash and no external debt, while returning approximately $35 million to shareholders through $25 million of repurchases and $10 million of dividends. It also added four company-owned stores and signed an agreement for two further independent-store acquisitions.
For the fiscal second quarter, management guided sales to $500-$520 million, representing enterprise sales growth of -1% to positive 2% excluding the wholesale casegoods divestiture, and adjusted operating margin to 4.0-5.5%. The outlook is supported by strong written Retail sales and a solid Wholesale backlog, but explicitly reflects a cautious macro view and continued spending and friction costs from store growth, advertising, strategic pricing, digital work, plant optimization, and distribution and home delivery transformation. The central operating question is whether Wholesale backlog and Retail demand can support sales and margin improvement while those investments and transformations continue.
Management, verbatim
During our first quarter, we continued to gain share and drive momentum in our Retail segment, where we control the full end-to-end consumer experience. We delivered strong sales growth across both delivered and written sales, and I'm particularly pleased to highlight growth across all three strategic pillars of same-store sales, new store expansion, and acquisitions of independent dealers, all while expanding operating margin.
Melinda D. Whittington, Board Chair, President and Chief Executive Officer of La-Z-Boy Incorporated
In our 100 th year, we continue to focus on driving our core vertically integrated North American upholstery business, through day-to-day operational excellence and broader enterprise transformations. We completed the divestiture of our wholesale casegoods businesses in May, continue to progress our multi-year distribution and home delivery transformation, and have concluded production at one of the two planned plant closures.
Melinda D. Whittington, Board Chair, President and Chief Executive Officer of La-Z-Boy Incorporated
We enter our second quarter with strong written Retail sales and a solid backlog in Wholesale, balanced by a cautious view of the macro backdrop.
Taylor Luebke, SVP and Chief Financial Officer of La-Z-Boy Incorporated
Not in the filing
stated, not guessed- Previous-quarter outlook was not provided, so no comparison of actual results with prior guidance is available.
- GAAP gross margin was not reported.
- Adjusted gross margin was not reported.
- Forward guidance for gross margin, operating expenses, tax rate, EPS, operating cash flow, free cash flow, capital expenditures, share repurchases, dividends, cash, and debt was not provided.
- External debt balance was not quantified; the company stated that it had no external debt.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.