• La-Z-Boy Reports Record Full Year Operating Income and EPS

    Source: Nasdaq GlobeNewswire / 20 Jun 2023 15:15:50   America/Chicago

    MONROE, Mich., June 20, 2023 (GLOBE NEWSWIRE) -- La-Z-Boy Incorporated (NYSE: LZB), a global leader in residential furniture, today reported solid fourth quarter and full year results for the period ending April 29, 2023.

    Fourth Quarter 2023 Financial Highlights:

    • Consolidated sales of $561 million
      • -12% adjusting for the 53rd week in the fourth quarter of fiscal 2022, versus last year, which benefited from a strong backlog
    • Retail segment sales increased 4% to $243 million
      • +12% adjusting for the 53rd week in the fourth quarter of fiscal 2022
      • Written same-store sales were essentially flat
    • GAAP operating income decreased by 31%
      • Non-GAAP operating income decreased by 15%
      • GAAP operating margin decreased 190 basis points to 9.6%
      • Non-GAAP operating margin increased 40 basis points to 9.8%
    • GAAP diluted EPS of $0.79, with Non-GAAP diluted EPS of $0.99, a 7% decrease
    • Cash generated from operating activities was $78 million

    Fiscal 2023 Financial Highlights:

    • Consolidated sales of $2.3 billion
      • +2% adjusting for the 53rd week in fiscal 2022
    • Retail segment sales increased 22% to $982 million
      • Record sales, operating profit, and operating margin
    • GAAP operating income increased by 2%
      • Non-GAAP operating income increased by 17%
      • GAAP operating margin increased 20 basis points to 9.0%
      • Non-GAAP operating margin increased 140 basis points to 9.5%
    • Record diluted EPS
      • GAAP diluted EPS increased by 3% to $3.48
      • Non-GAAP diluted EPS increased by 24% to $3.86
    • Cash generated from operating activities more than doubled to $205 million

    Melinda D. Whittington, President and Chief Executive Officer of La-Z-Boy Incorporated, said, "I would like to congratulate and thank our entire organization for delivering another strong year, with record Retail segment sales and operating profit, and record consolidated diluted EPS. We achieved these results through disciplined supply chain investments and solid execution in our company owned retail stores, reflecting the strength of our vertically integrated Retail and Wholesale model. We are pleased with our strong finish in the fourth quarter, where we were able to maintain roughly flat written same-store sales despite the declining macro environment."

    Whittington added, "Our results were enabled by our strong portfolio of iconic brands, collaboration and leadership of our talented employees, and execution of our value proposition - comfortable custom furniture with quick delivery - as our backlog has returned to more normalized historical levels. Our playbook is working, with our Retail penetration increasing through new store growth and independent Furniture Galleries® store acquisitions. We are confident in our ability to advance our business in an uncertain macro environment with our strong debt free balance sheet allowing us to invest in our Century Vision strategy to drive future growth. The foundation is set through Century Vision to expand brand reach and we continue to target sales growth exceeding the industry growth rate and double-digit operating margins over the long term. We look forward to executing this business strategy to create long-term shareholder value."

    Key Results:

    (Unaudited, amounts in thousands, except per share data)

    		 Quarter Ended     Year Ended  
     4/29/2023 4/30/2022  Change  4/29/2023 4/30/2022 Change
    Sales $561,287  $684,566   (18)% $2,349,433  $2,356,811   (0.3)%
                   
    GAAP operating income  54,073   78,785   (31)%  211,439   206,756   2%
    Non-GAAP operating income  55,056   64,602   (15)%  223,203   190,573   17%
                   
    GAAP operating margin  9.6%  11.5%  -190 bps  9.0%  8.8% 20 bps
    Non-GAAP operating margin  9.8%  9.4%  40 bps  9.5%  8.1% 140 bps
                   
    GAAP net income attributable to La-Z-Boy Incorporated  34,373   57,468   (40)%  150,664   150,017   0.4%
    Non-GAAP net income attributable to La-Z-Boy Incorporated  43,091   47,209   (9)%  167,080   138,600   21%
                   
    Diluted weighted average common shares  43,427   43,256       43,240   44,294   
                   
    GAAP diluted earnings per share $0.79  $1.33   (41)% $3.48  $3.39   3%
    Non-GAAP diluted earnings per share $0.99  $1.07   (7)% $3.86  $3.11   24%

    Liquidity Measures:

      Year Ended   Year Ended
    (Unaudited, amounts in thousands) 4/29/2023 4/30/2022 (Unaudited, amounts in thousands) 4/29/2023 4/30/2022
    Free Cash Flow     Cash Returns to Shareholders    
    Operating cash flow $205,167  $79,004  Share repurchases $5,004 $90,645
    Capital expenditures  (68,812)  (76,580) Dividends  29,869  27,717
    Free cash flow $136,355  $2,424  Cash returns to shareholders $34,873 $118,362


    (Unaudited, amounts in thousands) 4/29/2023 4/30/2022
    Cash and cash equivalents $343,374  $245,589 
    Restricted cash  3,304   3,267 
    Total cash, cash equivalents and restricted cash $346,678  $248,856 
     

    FY23 Q4 Results vs. FY22 Q4:

    Consolidated Results:

    • Consolidated sales in the fourth quarter of fiscal 2023 decreased 18% (-12% adjusting for the 53rd week in fiscal 2022) to $561 million, with the realization of pricing and surcharge actions and the positive effects of a favorable product and channel mix more than offset by lower delivered unit volume versus last year's backlog driven sales
    • Consolidated GAAP operating margin was 9.6% versus 11.5%
    • Consolidated non-GAAP(1) operating margin was 9.8% versus 9.4%
      • Improved operating margin was driven primarily by strong Retail performance
    • GAAP diluted EPS decreased 41% to $0.79 from $1.33; non-GAAP(1) diluted EPS decreased 7% to $0.99 from $1.07

    Retail Segment:

    • Sales:
      • Delivered sales increased 4% (+12% adjusted for the 53rd week in fiscal 2022) to $243 million; delivered same-store sales were relatively flat
      • Total written sales for the Retail segment (company owned La-Z-Boy Furniture Galleries® stores) increased 4%
    • Written same-store sales for the Retail segment were essentially flat as strong store execution mitigated lower consumer traffic
    • Operating Performance:
      • Non-GAAP(1) operating margin and operating income was 15.5% and $38 million, respectively, up 250 basis points and 24%, respectively, primarily driven by higher delivered sales relative to selling expenses and fixed costs

    Wholesale Segment:

    • Sales:
      • Decreased 23% (-17% adjusted for the 53rd week in fiscal 2022) to $395 million driven primarily by a decline in delivered volume as the backlog returned to pre-pandemic levels, partially offset by pricing and favorable channel and product mix
    • Operating Margin:
      • Non-GAAP(1) operating margin decreased to 8.7%, down 10 basis points; pricing and surcharge actions along with declining raw material and freight costs were essentially offset by fixed cost deleveraging on lower unit volume

    Corporate & Other:

    • Joybird delivered sales decreased 31% (-25% adjusted for the 53rd week in fiscal 2022) to $37 million, and written sales declined 24%, reflecting slowing e-commerce trends and industry demand challenges

    Balance Sheet and Cash Flow, Fiscal 2023 Full Year

    • Ended the fiscal year with $347 million in cash(2) and no external debt
    • Generated $205 million in cash from operating activities, including $78 million in the fourth quarter, versus $79 million in full fiscal year 2022 and $34 million in last year's fourth quarter
    • Invested $69 million in capital expenditures, primarily related to La-Z-Boy Furniture Galleries® (new stores and remodels), Joybird store projects, and upgrades at our manufacturing and distribution facilities
    • Returned $35 million to shareholders, including $30 million in dividends and $5 million in share repurchases

    Outlook

    Bob Lucian, Chief Financial Officer of La-Z-Boy Incorporated, said, "Excluding the impact of delivering backlog sales (approximately $300 million), normalized La-Z-Boy consumer demand in fiscal 2023 was 17% higher that it was in pre-pandemic fiscal 2019. In fiscal 2024, we expect to grow ahead of the industry from this normalized base, with the back half of our fiscal year stronger than the front half, in line with pre-pandemic seasonality trends. For our first quarter of fiscal 2024, which is generally the lowest sales quarter in the fiscal year, we expect sales to be in the range of $470 to $490 million and operating margin to be in the range of 6.5% to 7.5%."

    Conference Call

    La-Z-Boy will hold a conference call with the investment community on Wednesday, June 21, 2023, at 8:30 a.m. ET. The toll-free dial-in number is (888) 506-0062; international callers may use (973) 528-0011. Enter Participant Access Code 392627.

    The call will be webcast live, with corresponding slides, and archived on the Internet. It will be available at https://lazboy.gcs-web.com/. A telephone replay will be available for a week following the call. This replay will be accessible to callers from the U.S. and Canada at (877) 481-4010 and to international callers at (919) 882-2331. Enter Replay Passcode: 48491. The webcast replay will be available for one year.

    Investor Relations Contact

    Mark Becks, CFA, (734) 457-9538
    mbecks@la-z-boy.com

    About La-Z-Boy

    La-Z-Boy Incorporated is one of the world’s leading residential furniture producers, marketing furniture for every room of the home. The Wholesale segment includes La-Z-Boy, England, American Drew®, Hammary®, Kincaid® and the company's international wholesale and manufacturing businesses. The company-owned Retail segment includes 171 of the 349 La-Z-Boy Furniture Galleries® stores. Joybird is an e-commerce retailer and manufacturer of upholstered furniture.

    The corporation’s branded distribution network is dedicated to selling La-Z-Boy Incorporated products and brands, and includes 349 stand-alone La-Z-Boy Furniture Galleries® stores and 522 independent Comfort Studio® locations, in addition to in-store gallery programs for the company’s Kincaid and England operating units. Additional information is available at https://www.la-z-boy.com/.

    Notes
    (1)Non-GAAP amounts for the fourth quarter of fiscal 2023 exclude:

    • a $0.7 million pre-tax, or $0.01 per diluted share charge related to the closure of the Torreón, MX facility, primarily reflecting asset relocation costs
    • purchase accounting charges related to acquisitions completed in prior periods totaling $0.3 million pre-tax, or $0.01 per diluted share, with $0.3 million included in operating income and a de minimis amount included in interest expense
    • a pre-tax charge of $10.6 million, or $0.18 per diluted share related to an impairment of one investment

    Non-GAAP amounts for the fourth quarter of fiscal 2022 exclude:

    • a purchase accounting net benefit related to acquisitions completed in prior periods totaling $3.4 million pre-tax, or $0.08 per diluted share, with $3.5 million included in operating income and $0.1 million included in interest expense
    • a benefit of $10.7 million pre-tax, or $0.18 per diluted share, related to sale-leaseback transactions of three retail locations

    Non-GAAP amounts for the full fiscal 2023 year exclude:

    • a $10.8 million pre-tax, or $0.19 per diluted share charge related to the closure of the Torreón, MX facility, primarily reflecting the impairment of various assets
    • purchase accounting charges related to acquisitions completed in prior periods totaling $0.6 million pre-tax, or less than $0.01 per diluted share, with $0.3 million included in operating income and $0.3 million included in interest expense
    • a pre-tax charge of $10.6 million, or $0.18 per diluted share related to an impairment of one investment
    • a $0.6 million pre-tax, or $0.01 per diluted share, charge related to the company's business realignment, announced in June 2020

    Non-GAAP amounts for the full fiscal 2022 year exclude:

    • a purchase accounting net benefit related to acquisitions completed in prior periods totaling $1.7 million pre-tax, or $0.04 per diluted share, with $2.3 million included in operating income and $0.5 million included in interest expense
    • a $3.3 million pre-tax, or $0.06 per diluted share, gain on the sale of the Newton, Mississippi facility related to the company's business realignment, announced in June 2020. The company continues to operate a portion of this facility
    • a benefit of $10.7 million pre-tax, or $0.18 per diluted share, related to sale-leaseback transactions of three retail locations

    Please refer to the accompanying “Reconciliation of GAAP to Non-GAAP Financial Measures” for detailed information on calculating the Non-GAAP financial measures used in this press release and a reconciliation to the most directly comparable GAAP measure.

    (2)Cash includes cash, cash equivalents and restricted cash.

    (3)This reference to Non-GAAP operating margin for a future period is a Non-GAAP financial measure. We have not provided a reconciliation of Non-GAAP operating margin for future periods in this press release because such reconciliation cannot be provided without unreasonable efforts.

    Cautionary Note Regarding Forward-Looking Statements

    This news release contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. Generally, forward-looking statements include information concerning expectations, projections or trends relating to our results of operations, financial results, financial condition, strategic initiatives and plans, expenses, dividends, share repurchases, liquidity, use of cash and cash requirements, borrowing capacity, investments, future economic performance, and our business and industry.

    The forward-looking statements in this press release are based on certain assumptions and currently available information and are subject to various risks and uncertainties, many of which are unforeseeable and beyond our control. Additional risks and uncertainties that we do not presently know about or that we currently consider to be immaterial may also affect our business operations and financial results. Our actual future results and trends may differ materially depending on a variety of factors, including, but not limited to, the risks and uncertainties discussed in our fiscal 2023 Annual Report on Form 10-K and other factors identified in our reports filed with the Securities and Exchange Commission (the "SEC"), available on the SEC's website at www.sec.gov. Given these risks and uncertainties, you should not rely on forward-looking statements as a prediction of actual results. We are including this cautionary note to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or for any other reason.

    Additional Information

    This news release is just one part of La-Z-Boy’s financial disclosures and should be read in conjunction with other information filed with the SEC, which is available at: https://lazboy.gcs-web.com/financial-information/sec-filings. Investors and others wishing to be notified of future La-Z-Boy news releases, SEC filings and quarterly investor conference calls may sign up at: https://lazboy.gcs-web.com/.

    Non-GAAP Financial Measures

    In addition to the financial measures prepared in accordance with accounting principles generally accepted in the United States ("GAAP"), this press release also includes Non-GAAP financial measures. Management uses these Non-GAAP financial measures when assessing our ongoing performance. This press release contains references to Non-GAAP operating income, Non-GAAP operating margin, and Non-GAAP net income attributable to La-Z-Boy Incorporated per diluted share (and components thereof, including Non-GAAP income before income taxes and Non-GAAP net income attributable to La-Z-Boy Incorporated), which may exclude, as applicable, business realignment charges, Mexico optimization charges, investment impairment charges, purchase accounting charges and sale-leaseback gains. The business realignment charges include severance costs, asset impairment costs, and costs to relocate equipment and inventory related to organizational changes we undertook as a result of our response to COVID, including a reduction in the company's work force, temporary closure of certain manufacturing facilities and subsequent gains resulting from the sale of related assets. The Mexico optimization charges include asset impairment costs, severance costs, and employee relocation costs resulting from the closure of our Torreón manufacturing facility. The purchase accounting charges may include the amortization of intangible assets, incremental expense upon the sale of inventory acquired at fair value, amortization of employee retention agreements, fair value adjustments of future cash payments recorded as interest expense, and adjustments to the fair value of contingent consideration. Sale-leaseback gains are the result of the sale of the buildings and related fixed assets of three Retail stores. These Non-GAAP financial measures are not meant to be considered superior to or a substitute for La-Z-Boy Incorporated’s results of operations prepared in accordance with GAAP and may not be comparable to similarly titled measures reported by other companies. Reconciliations of such Non-GAAP financial measures to the most directly comparable GAAP financial measures are set forth in the accompanying tables.

    Management believes that presenting certain Non-GAAP financial measures will help investors understand the long-term profitability trends of our business and compare our profitability to prior and future periods and to our peers. Management excludes purchase accounting charges because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions consummated and the success with which we operate the businesses acquired. While the company has a history of acquisition activity, it does not acquire businesses on a predictable cycle, and the impact of purchase accounting charges is unique to each acquisition and can vary significantly from acquisition to acquisition. Similarly, business realignment charges and Mexico optimization charges are dependent on the timing, size, number and nature of the operations being moved or closed, and the charges may not be incurred on a predictable cycle. Management also excludes the impacts from the impairment charge for one investment and sale-leasebacks when assessing the company’s operating and financial performance due to the one-time or infrequent nature of these transactions. Management believes that exclusion of these items facilitates more consistent comparisons of the company’s operating results over time. Where applicable, the accompanying “Reconciliation of GAAP to Non-GAAP Financial Measures” tables present the excluded items net of tax calculated using the effective tax rate from operations for the period in which the adjustment is presented, except for the non-tax deductible goodwill impairment charge and the adjustment to the fair value of contingent consideration which reflects the associated GAAP tax impact in the period presented.

     

    LA-Z-BOY INCORPORATED
    CONSOLIDATED STATEMENT OF INCOME

      Quarter Ended Year Ended
    (Unaudited, amounts in thousands, except per share data) 4/29/2023 4/30/2022 4/29/2023 4/30/2022
    Sales $561,287  $684,566  $2,349,433  $2,356,811 
    Cost of sales  301,211   413,339   1,340,734   1,440,842 
    Gross profit  260,076   271,227   1,008,699   915,969 
    Selling, general and administrative expense  206,003   192,442   797,260   709,213 
    Operating income   54,073   78,785   211,439   206,756 
    Interest expense  (122)  (182)  (536)  (895)
    Interest income  3,046   309   6,670   1,338 
    Other income (expense), net  (10,950)  (1,186)  (11,784)  (1,708)
    Income before income taxes  46,047   77,726   205,789   205,491 
    Income tax expense  11,402   20,104   53,848   53,163 
    Net income  34,645   57,622   151,941   152,328 
    Net (income) loss attributable to noncontrolling interests  (272)  (154)  (1,277)  (2,311)
    Net income attributable to La-Z-Boy Incorporated $34,373  $57,468  $150,664  $150,017 
             
    Basic weighted average common shares  43,261   43,137   43,148   44,023 
    Basic net income attributable to La-Z-Boy Incorporated per share $0.79  $1.33  $3.49  $3.41 
             
    Diluted weighted average common shares  43,427   43,256   43,240   44,294 
    Diluted net income attributable to La-Z-Boy Incorporated per share $0.79  $1.33  $3.48  $3.39 


    LA-Z-BOY INCORPORATED
    CONSOLIDATED BALANCE SHEET

    (Unaudited, amounts in thousands, except par value) 4/29/2023 4/30/2022
    Current assets    
    Cash and equivalents $343,374  $245,589 
    Restricted cash  3,304   3,267 
    Receivables, net of allowance of $4,776 at 4/29/2023 and $3,406 at 4/30/2022  125,536   183,747 
    Inventories, net  276,257   303,191 
    Other current assets  106,129   215,982 
    Total current assets  854,600   951,776 
    Property, plant and equipment, net  278,578   253,144 
    Goodwill  205,008   194,604 
    Other intangible assets, net  39,375   33,971 
    Deferred income taxes – long-term  8,918   10,632 
    Right of use lease assets  416,269   405,755 
    Other long-term assets, net  63,515   82,207 
    Total assets $1,866,263  $1,932,089 
         
    Current liabilities    
    Accounts payable $107,460  $104,025 
    Lease liabilities, short-term  77,751   75,271 
    Accrued expenses and other current liabilities  290,650   496,393 
    Total current liabilities  475,861   675,689 
    Lease liabilities, long-term  368,163   354,843 
    Other long-term liabilities  70,142   81,935 
    Shareholders' equity    
    Preferred shares – 5,000 authorized; none issued  —   — 
    Common shares, $1 par value – 150,000 authorized; 43,318 outstanding at 4/29/2023 and 43,089 outstanding at 4/30/2022  43,318   43,089 
    Capital in excess of par value  358,891   342,252 
    Retained earnings  545,155   431,181 
    Accumulated other comprehensive loss  (5,528)  (5,797)
    Total La-Z-Boy Incorporated shareholders' equity  941,836   810,725 
    Noncontrolling interests  10,261   8,897 
    Total equity  952,097   819,622 
    Total liabilities and equity $1,866,263  $1,932,089 
             

    LA-Z-BOY INCORPORATED
    CONSOLIDATED STATEMENT OF CASH FLOWS

      Year Ended
    (Unaudited, amounts in thousands) 4/29/2023 4/30/2022
    Cash flows from operating activities    
    Net income $151,941  $152,328 
    Adjustments to reconcile net income to cash provided by operating activities    
    (Gain)/loss on disposal and impairment of assets  6,365   (13,657)
    (Gain)/loss on sale of investments  148   (478)
    Provision for doubtful accounts  1,546   (617)
    Depreciation and amortization  40,193   39,771 
    Amortization of right-of-use lease assets  76,511   72,942 
    Lease impairment  1,347   — 
    Equity-based compensation expense  12,458   11,858 
    Change in deferred taxes  3,895   1,022 
    Change in receivables  53,675   (41,829)
    Change in inventories  32,311   (72,022)
    Change in other assets  24,377   (16,232)
    Change in payables  4,586   6,326 
    Change in lease liabilities  (77,811)  (73,805)
    Change in other liabilities  (126,375)  13,397 
    Net cash provided by operating activities  205,167   79,004 
         
    Cash flows from investing activities    
    Proceeds from disposals of assets  136   22,588 
    Capital expenditures  (68,812)  (76,580)
    Purchases of investments  (9,092)  (34,152)
    Proceeds from sales of investments  24,483   36,096 
    Acquisitions  (16,835)  (26,323)
    Net cash used for investing activities  (70,120)  (78,371)
         
    Cash flows from financing activities    
    Payments on debt and finance lease liabilities  (123)  (121)
    Holdback payments for acquisitions  (5,000)  (23,000)
    Stock issued for stock and employee benefit plans, net of shares withheld for taxes  2,857   (1,818)
    Repurchases of common stock  (5,004)  (90,645)
    Dividends paid to shareholders  (29,869)  (27,717)
    Dividends paid to minority interest joint venture partners (1)  —   (1,260)
    Net cash used for financing activities  (37,139)  (144,561)
         
    Effect of exchange rate changes on cash and equivalents  (86)  (1,919)
    Change in cash, cash equivalents and restricted cash  97,822   (145,847)
    Cash, cash equivalents and restricted cash at beginning of period  248,856   394,703 
    Cash, cash equivalents and restricted cash at end of period $346,678  $248,856 
         
    Supplemental disclosure of non-cash investing activities    
    Capital expenditures included in payables $8,208  $9,234 

    (1)   Includes dividends paid to joint venture minority partners resulting from the repatriation of dividends from our foreign earnings that we no longer consider permanently reinvested.


    LA-Z-BOY INCORPORATED
    SEGMENT INFORMATION

      Quarter Ended Year Ended
    (Unaudited, amounts in thousands) 4/29/2023 4/30/2022 4/29/2023 4/30/2022
    Sales        
    Wholesale segment:        
    Sales to external customers $280,918  $397,629  $1,215,429  $1,371,602 
    Intersegment sales  113,678   115,337   474,819   397,236 
    Wholesale segment sales  394,596   512,966   1,690,248   1,768,838 
             
    Retail segment sales  242,713   233,075   982,043   804,394 
             
    Corporate and Other:        
    Sales to external customers  37,656   53,862   151,961   180,815 
    Intersegment sales  2,657   3,471   14,229   15,144 
    Corporate and Other sales  40,313   57,333   166,190   195,959 
             
    Eliminations  (116,335)  (118,808)  (489,048)  (412,380)
    Consolidated sales $561,287  $684,566  $2,349,433  $2,356,811 
             
    Operating Income (Loss)        
    Wholesale segment $33,657  $44,915  $115,215  $134,013 
    Retail segment  37,716   41,044   161,571   109,546 
    Corporate and Other  (17,300)  (7,174)  (65,347)  (36,803)
    Consolidated operating income $54,073  $78,785  $211,439  $206,756 
                     


    LA-Z-BOY INCORPORATED
    UNAUDITED QUARTERLY FINANCIAL DATA

    Fiscal 2023

    Fiscal Quarter Ended (13 weeks) (13 weeks) (13 weeks) (13 weeks)
    (Amounts in thousands, except per share data) 7/30/2022 10/29/2022 1/28/2023 4/29/2023
    Sales $604,091  $611,332  $572,723  $561,287 
    Cost of sales  362,631   350,596   326,296   301,211 
    Gross profit  241,460   260,736   246,427   260,076 
    Selling, general and administrative expense  188,817   198,853   203,587   206,003 
    Operating income  52,643   61,883   42,840   54,073 
    Interest expense  (159)  (119)  (136)  (122)
    Interest income  474   1,138   2,012   3,046 
    Other income (expense), net  45   183   (1,062)  (10,950)
    Income before income taxes  53,003   63,085   43,654   46,047 
    Income tax expense  14,063   16,306   12,077   11,402 
    Net income  38,940   46,779   31,577   34,645 
    Net (income) loss attributable to noncontrolling interests  (452)  (702)  149   (272)
    Net income attributable to La-Z-Boy Incorporated $38,488  $46,077  $31,726  $34,373 
    Diluted weighted average common shares  43,142   43,182   43,137   43,427 
    Diluted net income attributable to La-Z-Boy Incorporated per share $0.89  $1.07  $0.74  $0.79 


    Fiscal     2022

    Fiscal Quarter Ended (13 weeks) (13 weeks) (13 weeks) (14 weeks)
    (Amounts in thousands, except per share data) 7/24/2021 10/23/2021 1/22/2022 4/30/2022
    Sales $524,783  $575,889  $571,573  $684,566 
    Cost of sales  322,701   352,594   352,208   413,339 
    Gross profit  202,082   223,295   219,365   271,227 
    Selling, general and administrative expense  167,711   169,182   179,878   192,442 
    Operating income  34,371   54,113   39,487   78,785 
    Interest expense  (311)  (242)  (160)  (182)
    Interest income  117   106   806   309 
    Other income (expense), net  (93)  1,031   (1,460)  (1,186)
    Income before income taxes  34,084   55,008   38,673   77,726 
    Income tax expense  8,818   14,650   9,591   20,104 
    Net income  25,266   40,358   29,082   57,622 
    Net income attributable to noncontrolling interests  (700)  (842)  (615)  (154)
    Net income attributable to La-Z-Boy Incorporated $24,566  $39,516  $28,467  $57,468 
    Diluted weighted average common shares  45,404   44,423   43,968   43,256 
    Diluted net income attributable to La-Z-Boy Incorporated per share $0.54  $0.89  $0.65  $1.33 


    LA-Z-BOY INCORPORATED
    RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

      Quarter Ended Year Ended
    (Amounts in thousands, except per share data) 4/29/2023 4/30/2022 4/29/2023 4/30/2022
    GAAP gross profit $260,076  $271,227  $1,008,699  $915,969 
    Purchase accounting charges - incremental expense upon the sale of inventory acquired at fair value  —   —   132   — 
    Business realignment charges  —   —   609   — 
    Mexico optimization charges  741   —   1,621   — 
    Non-GAAP gross profit $260,817  $271,227  $1,011,061  $915,969 
             
    GAAP SG&A $206,003  $192,442  $797,260  $709,213 
    Purchase accounting gain/(charges) - adjustment to the fair value of contingent consideration, amortization of intangible assets and retention agreements  (252)  3,528   (206)  2,251 
    Business realignment gain  —   —   —   3,277 
    Mexico optimization gain/(charges)  10   —   (9,196)  — 
    Sale leaseback gain  —   10,655   —   10,655 
    Non-GAAP SG&A $205,761  $206,625  $787,858  $725,396 
             
    GAAP operating income $54,073  $78,785  $211,439  $206,756 
    Purchase accounting (gain)/charges  252   (3,528)  338   (2,251)
    Business realignment (gain)/charges  —   —   609   (3,277)
    Mexico optimization charges  731   —   10,817   — 
    Sale leaseback gain  —   (10,655)  —   (10,655)
    Non-GAAP operating income $55,056  $64,602  $223,203  $190,573 
             
    GAAP income before income taxes $46,047  $77,726  $205,789  $205,491 
    Purchase accounting (gain)/charges recorded as gross profit, SG&A, and interest expense  300   (3,437)  571   (1,737)
    Business realignment (gain)/charges  —   —   609   (3,277)
    Mexico optimization charges  731   —   10,817   — 
    Sale leaseback gain  —   (10,655)  —   (10,655)
    Investment impairment  10,562   —   10,562   — 
    Non-GAAP income before income taxes $57,640  $63,634  $228,348  $189,822 
             
    GAAP net income attributable to La-Z-Boy Incorporated $34,373  $57,468  $150,664  $150,017 
    Purchase accounting (gain)/charges recorded as gross profit, SG&A and interest expense  300   (3,437)  571   (1,737)
    Tax effect of purchase accounting  (74)  935   (361)  588 
    Business realignment (gain)/charges  —   —   609   (3,277)
    Tax effect of business realignment  —   —   (160)  862 
    Mexico optimization charges  731   —   10,817   — 
    Tax effect of Mexico optimization charges  (181)  —   (2,845)  — 
    Sale leaseback gain  —   (10,655)  —   (10,655)
    Tax effect of sale leaseback gain  —   2,898   —   2,802 
    Investment impairment  10,562   —   10,562   — 
    Tax effect of investment impairment  (2,619)  —   (2,778)  — 
    Non-GAAP net income attributable to La-Z-Boy Incorporated $43,091  $47,209  $167,080  $138,600 
             
    GAAP net income attributable to La-Z-Boy Incorporated per diluted share $0.79  $1.33  $3.48  $3.39 
    Purchase accounting (gain)/charges, net of tax, per share  0.01   (0.08)  —   (0.04)
    Business realignment (gain)/charges, net of tax, per share  —   —   0.01   (0.06)
    Mexico optimization charges, net of tax, per share  0.01   —   0.19   — 
    Sale leaseback gain, net of tax, per share  —   (0.18)  —   (0.18)
    Investment impairment, net of tax, per share  0.18   —   0.18   — 
    Non-GAAP net income attributable to La-Z-Boy Incorporated per diluted share $0.99  $1.07  $3.86  $3.11 
                     

    LA-Z-BOY INCORPORATED
    RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
    SEGMENT INFORMATION

      Quarter Ended Year Ended
    (Amounts in thousands) 4/29/2023 % of sales 4/30/2022 % of sales 4/29/2023 % of sales 4/30/2022 % of sales
    GAAP operating income (loss)                
    Wholesale segment $33,657  8.5% $44,915  8.8% $115,215  6.8% $134,013  7.6%
    Retail segment  37,716  15.5%  41,044  17.6%  161,571  16.5%  109,546  13.6%
    Corporate and Other  (17,300) N/M   (7,174) N/M   (65,347) N/M   (36,803) N/M 
    Consolidated GAAP operating income $54,073  9.6% $78,785  11.5% $211,439  9.0% $206,756  8.8%
                     
    Non-GAAP items affecting operating income                
    Wholesale segment $784    $57    $11,634    $(3,041)  
    Retail segment  —     (10,655)    132     (10,655)  
    Corporate and Other  199     (3,585)    (2)    (2,487)  
    Consolidated Non-GAAP items affecting operating income $983    $(14,183)   $11,764    $(16,183)  
                     
    Non-GAAP operating income (loss)                
    Wholesale segment $34,441  8.7% $44,972  8.8% $126,849  7.5% $130,972  7.4%
    Retail segment  37,716  15.5%  30,389  13.0%  161,703  16.5%  98,891  12.3%
    Corporate and Other  (17,101) N/M   (10,759) N/M   (65,349) N/M   (39,290) N/M 
    Consolidated Non-GAAP operating income $55,056  9.8% $64,602  9.4% $223,203  9.5% $190,573  8.1%
                     
    N/M - Not Meaningful                

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