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LZB
Earnings call · Jul 2026 (Q1 FY27)

LA-Z-BOY Q1 FY27 earnings call LZB

Aug 19, 2026 Source

Executive summary

La-Z-Boy Q1 FY27 — Retail Momentum Drives Growth Amidst Wholesale Headwinds

La-Z-Boy demonstrated strong retail segment performance in Q1 FY27, driven by strategic expansion and positive same-store sales, even as the broader furniture market faces challenges. The company is actively investing in digital transformation and supply chain optimization, positioning itself for long-term growth. However, these investments, coupled with uneven demand in the wholesale segment and ongoing volatility in the Joybird business, led to mixed consolidated results and margin pressure for the quarter.

Highlights

5

  • Retail segment written sales increased 16%, with written same-store sales growing 3%.

  • Retail segment delivered sales increased 10%, led by acquisitions and new stores.

  • Added 4 company-owned stores (1 new, 3 acquired), bringing total to 234.

  • Returned $35 million to shareholders through share repurchase and dividends, a 62% increase versus prior year.

  • Ended the quarter with $267 million in cash and no external debt.

Concerns

5

  • Total delivered sales for the enterprise were down 1% versus prior year (excluding Casegoods divestitures).

  • Lower wholesale delivered sales due to choppier-than-expected order patterns.

  • Joybird written sales decreased 17% and continues to be a drag on enterprise results.

  • Consolidated GAAP operating income was a loss of $2 million.

  • Adjusted operating margin decreased to 3.9% from 4.8% last year, primarily due to expense deleverage on lower wholesale and Joybird sales.

Guidance & targets

CategoryTargetConfidence
Q2 FY27 Sales
$500M-$520M
high materiality
Medium
Q2 FY27 Adjusted Operating Margin
4%-5.5%
high materiality
Medium
Full-year FY27 Effective Income Tax Rate
26%-27%
medium materiality
High
Full-year FY27 Capital Expenditures
$90M-$110M
high materiality
High
Annual New Store Openings
approximately 10 new stores annually
medium materiality
High
Joybird Manufacturing Integration
complete by end of fiscal year
medium materiality
High
Distribution Hub Completion
remaining 2 of 3 centralized hubs completed and opened by fiscal year-end
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Consolidated
Sales were down 1% when adjusting for the wholesale Casegoods divestiture. Adjusted operating margin decline primarily driven by expense deleverage on lower wholesale and Joybird delivered sales. Q1 is generally the lowest sales and operating margin quarter due to seasonally lower industry sales and annual plant shutdown.
Adjusted Operating Income: $19MGAAP Operating Margin: -0.4%Adjusted Operating Margin: 3.9% (vs 4.8% last year)GAAP Diluted EPS: -$0.06Adjusted Diluted EPS: $0.43
—-3% (reported)—-$2M (GAAP Operating Income)
Retail Segment
Growth primarily due to acquisitions and new stores. Adjusted operating margin increased from 6.3% last year, driven by the positive impact of acquisitions. Performance driven by execution across marketing, product innovation, and in-store experience.
Delivered same-store sales: down slightlyWritten sales: 16% increaseWritten same-store sales: 3% growthCompany-owned stores added: 4 (1 new, 3 acquired)Total company-owned stores: 234 (62% of total network)Total La-Z-Boy store network: ~380 stores across North America
$229M10%—6.5% (Adjusted Operating Margin)
Wholesale Segment
Sales impacted by flow-through of uneven order patterns. Adjusted operating margin decreased from 7.5% last year, driven by fixed cost deleverage on lower delivered volume and friction costs related to strategic investments, partially offset by favorable tariff impact.
Delivered sales (adjusted for Casegoods divestiture): down 5%Adjusted Operating Margin (vs last year): 7.5%Favorable tariff impact: 240 basis pointsLa-Z-Boy Comfort Studio and branded space locations: >1,400
$323M-9% (reported)—6.8% (Adjusted Operating Margin)
Joybird (Corporate and Other)
Lower delivered sales volume due to consumer segment volatility against the current macroeconomic backdrop. Operating loss increased primarily due to expense deleverage. In process of integrating manufacturing into existing U.S. plant network to improve cost structure.
Written sales: 17% decrease
$27M-4%—increased operating loss

LZB operating KPIs by quarter

LZB operating KPIs stated on its earnings calls, by fiscal quarter
KPI Apr 2026 Q4 FY26This call Jul 2026 Q1 FY27Change vs prior quarter
New stores opened Retail
4 Highlights for our fourth quarter included our Retail segment delivered sales increasing 9% by acquisitions and new stores and we opened 4 new stores during the quarter, bringing the total to 230 company-owned. Source transcript
1 We added 4 company-owned stores during the quarter, including 1 new and 3 acquired, bringing our total to 234 company-owned stores or 62% of the total network. Source transcript
-75%
Stores Company-owned
230 Highlights for our fourth quarter included our Retail segment delivered sales increasing 9% by acquisitions and new stores and we opened 4 new stores during the quarter, bringing the total to 230 company-owned. Source transcript
234 We added 4 company-owned stores during the quarter, including 1 new and 3 acquired, bringing our total to 234 company-owned stores or 62% of the total network. Source transcript
+1.7%
Stores
<380 Our total La-Z-Boy store network, including company-owned and independently owned stores, now stands at nearly 380 stores across North America. Source transcript
~380 Our total La-Z-Boy store network, including company-owned stores and independently owned stores, now stands at approximately 380 stores across North America and progress continues. Source transcript
—
Stores Comfort Studio and branded spaces
<1,400 We ended the fiscal year with nearly 1,400 La-Z-Boy Comfort Studio and branded space locations, each fully dedicated to our La-Z-Boy branded products. Source transcript
1,400+ We ended the quarter with over 1,400 La-Z-Boy Comfort Studio and branded space locations, each with dedicated space for La-Z-Boy branded products. Source transcript
—

Operating figures the company states on every call, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

ProductTypeDetails
Digital Transformation Featuresupdate

Deals & partnerships

Independent La-Z-Boy dealers Acquisition of two independent La-Z-Boy stores in Louisiana.

The company signed an agreement to acquire two independent La-Z-Boy stores, continuing its strategy of expanding company-owned retail footprint. This follows the acquisition of three stores during Q1.

Risks & headwinds

Broader furniture market challenges Near-term

Total delivered sales for the enterprise were down 1% versus prior year (excluding Casegoods divestitures).

Mitigation:Driving own retail momentum, progressing strategic initiatives, investing in business, capturing market share through brand strength, agile U.S.-centered supply chain, consumer-led insights, and excellent retail execution.

Choppy and uneven demand patterns in Wholesale Q1 FY27, expected to continue into Q2 FY27

Wholesale delivered sales decreased 9% (reported) and 5% (adjusted for divestiture).

Mitigation:Focusing on strategic partners, maintaining solid order backlog, expanding brand reach through multi-branded retailers, and optimizing assets in-store.

Joybird business volatility and drag on enterprise results Q1 FY27, expected to continue into Q2 FY27

Joybird written sales decreased 17%; adjusted operating loss increased.

Mitigation:Transitioning manufacturing into established U.S. plant network by fiscal year-end to improve cost structure and resiliency.

Friction costs from strategic investments Q1 FY27, Q2 FY27, and balance of FY27

Negatively impacted margins for the quarter; Q2 adjusted operating margin guidance of 4%-5.5% reflects these costs.

Mitigation:Commitment to important initiatives like distribution and home delivery transformation, manufacturing plant consolidations, and Joybird integration, which are expected to optimize the company for future growth.

Non-repeat of prior year's one-time warranty benefit Q2 FY27

110 basis point favorable benefit in Q2 FY26 will not repeat in Q2 FY27.

Mitigation:Acknowledged in Q2 margin guidance; offset by incremental investments in advertising, digital transformation, and strategic pricing.

Evolving tariff and trade policy environment Ongoing

Recently issued Section 301 and 338 tariffs adding incremental but manageable impacts.

Mitigation:Over 90% U.S. upholstery production provides a competitive advantage to mitigate trade volatility; continues to monitor and adjust accordingly.

Bifurcated consumer demand Ongoing

Not explicitly quantified, but noted as impacting pricing strategy.

Mitigation:Sharpening opening price points while continuing to serve strong design sales and large tickets for consumers willing to invest in whole room solutions.

What to watch in Q2 FY27

Retail written same-store sales growth

next quarter
Current 3%
Target Continued positive growth

Why it matters

Sustained positive SSSG is critical for the retail expansion strategy and overall company momentum in a challenging market.

Written same-store sales, which exclude the benefit of new and acquired stores, grew 3% for the quarter, which is also a significant sequential improvement versus fourth quarter.

Q&A highlights

What factors contributed most to the positive written comp in retail, and how should we think about these factors and August trends for Q2?

Melinda stated that no single factor stood out, but rather incremental improvements across all retail KPIs, reflecting sound execution. The focus is on driving positive same-store sales through marketing, product innovation, in-store experience, and strengthening digital transformation. Tentpole events like Memorial Day and 4th of July were key drivers in Q1, but it's too early to comment on Labor Day for Q2.

“I would say no individual factor stands out, but really, as I called out, really across sort of all of our KPIs in retail, each one was incrementally better, right? And so that's a good thing, right, in that it speaks to just really sound execution across the board.”

asked by Taylor Zick · answered by Melinda Whittington

2 min read 5 chapters

Detailed narrative

Retail Momentum and Expansion Strategy

La-Z-Boy's retail segment demonstrated significant momentum, with written sales increasing 16% and written same-store sales growing 3% in Q1 FY27. This performance was attributed to strong execution in marketing, product innovation, and in-store experience, leading to increases in design sales, conversion rates, and average ticket. The company added 4 company-owned stores, bringing its total to 234, and aims to expand its total La-Z-Boy store network to 450 locations, with approximately 10 new company-owned stores annually. Independent dealer acquisitions also remain a key growth opportunity, with an agreement to acquire two more stores expected to close in October.

Digital Transformation and Omnichannel Experience

The company is advancing its digital transformation to enhance its direct-to-consumer growth strategy and omnichannel experience. Recent enhancements to its e-commerce platform include a new content management system with enhanced visuals and 3D illustrations, AI-enriched product descriptions, shared cart functionality, and AI-powered search capabilities. These initiatives aim to support the vision of a unified omnichannel experience, catering to nearly 50 million annual website visitors who begin their shopping journey online before often completing purchases in-store.

Wholesale Segment Performance and Strategy

The wholesale segment experienced choppier-than-expected order patterns, leading to a 9% decrease in reported delivered sales (5% excluding Casegoods divestiture). Despite this, the company maintains a solid backlog entering Q2 and continues to focus on growing its business with compatible strategic partners. La-Z-Boy ended the quarter with over 1,400 Comfort Studio and branded space locations, emphasizing organic expansion with existing partners and evaluating new distribution opportunities to reach consumers not served by its retail stores.

Supply Chain Optimization and Efficiency

La-Z-Boy is optimizing its vertically integrated manufacturing footprint, with over 90% of upholstered furniture produced domestically, providing a competitive advantage in managing tariffs and offering customized products with 4-6 week delivery times. The company concluded production at one of two planned upholstery plant consolidations in Q1, with the second expected by fiscal year-end. Fiscal '27 is also a foundational year for its distribution and home delivery transformation project, with the remaining two of three centralized hubs set to be completed by year-end, aiming for 20% less mileage, 30% less square footage, and doubled delivery radius.

Joybird Business Restructuring

The Joybird business continues to face significant consumer volatility, with written sales decreasing 17% and contributing to an increased adjusted operating loss for the Corporate and Other segment. To improve resiliency and cost structure, La-Z-Boy is transitioning Joybird's manufacturing into its established U.S. plant network, with completion expected by the end of the fiscal year. This integration is incurring near-term friction costs but is anticipated to make the business more resilient and profitable by leveraging the existing plant network's ability to manage throughput volatility more effectively.

AI-generated summary of the company's earnings call. Not investment advice.