lzb-20240727

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 27, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

COMMISSION FILE NUMBER 1-9656

LA-Z-BOY INCORPORATED

(Exact name of registrant as specified in its charter)


Michigan						38-0751137
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

One La-Z-Boy Drive,

Monroe,

Michigan

48162-5138

(Address of principal executive offices)

(Zip Code)

Registrant's telephone number, including area code (734) 242-1444

None

(Former name, former address and former fiscal year, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $1.00 Par Value

LZB

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:


Class						Outstanding at August 13, 2024
Common Stock, $1.00 Par Value						41,827,242

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LA-Z-BOY INCORPORATED

FORM 10-Q FIRST QUARTER OF FISCAL 2025

TABLE OF CONTENTS


		Page Number
PART I Financial Information (Unaudited)		3
Item 1.	Financial Statements	3
	Consolidated Statement of Income	3
	Consolidated Statement of Comprehensive Income	4
	Consolidated Balance Sheet	5
	Consolidated Statement of Cash Flows	6
	Consolidated Statement of Changes in Equity	7
	Notes to Consolidated Financial Statements	8
	Note 1. Basis of Presentation	8
	Note 2. Acquisitions	8
	Note 3. Cash and Restricted Cash	9
	Note 4. Inventories	9
	Note 5. Goodwill and Other Intangible Assets	10
	Note 6. Investments	10
	Note 7. Product Warranties	11
	Note 8. Stock-Based Compensation	12
	Note 9. Accumulated Other Comprehensive Loss	13
	Note 10. Revenue Recognition	14
	Note 11. Segment Information	15
	Note 12. Income Taxes	16
	Note 13. Earnings per Share	17
	Note 14. Fair Value Measurements	17

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
	Cautionary Note Regarding Forward-Looking Statements	19
	Introduction	19
	Results of Operations	22
	Liquidity and Capital Resources	24
	Critical Accounting Policies	26
	Recent Accounting Pronouncements	26

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	27

PART II Other Information		28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 5.	Other Information	28
Item 6.	Exhibits	29

Signature Page		30

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PART I - FINANCIAL INFORMATION (UNAUDITED)

ITEM 1. FINANCIAL STATEMENTS

LA-Z-BOY INCORPORATED

CONSOLIDATED STATEMENT OF INCOME


	Quarter Ended
(Unaudited, amounts in thousands, except per share data)	7/27/2024		7/29/2023
Sales	$	495,532	$	481,651
Cost of sales	282,189		275,923
Gross profit	213,343		205,728
Selling, general and administrative expense	180,973		171,202
Operating income	32,370		34,526
Interest expense	(210)		(122)
Interest income	4,424		3,056


Other income (expense), net	(618)		556
Income before income taxes	35,966		38,016
Income tax expense	9,162		10,090
Net income	26,804		27,926
Net (income) attributable to noncontrolling interests	(645)		(447)
Net income attributable to La-Z-Boy Incorporated	$	26,159	$	27,479

Basic weighted average common shares	42,052		43,239
Basic net income attributable to La-Z-Boy Incorporated per share	$	0.62	$	0.64

Diluted weighted average common shares	42,564		43,333
Diluted net income attributable to La-Z-Boy Incorporated per share	$	0.61	$	0.63

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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LA-Z-BOY INCORPORATED

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME


	Quarter Ended
(Unaudited, amounts in thousands)	7/27/2024		7/29/2023
Net income	$	26,804	$	27,926
Other comprehensive income
Currency translation adjustment	1,533		1,047

Net unrealized gain on marketable securities, net of tax	113		220
Net pension amortization, net of tax	15		23
Total other comprehensive income	1,661		1,290
Total comprehensive income before noncontrolling interests	28,465		29,216
Comprehensive (income) attributable to noncontrolling interests	(971)		(407)
Comprehensive income attributable to La-Z-Boy Incorporated	$	27,494	$	28,809

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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LA-Z-BOY INCORPORATED

CONSOLIDATED BALANCE SHEET


(Unaudited, amounts in thousands, except par value)	7/27/2024		4/27/2024
Current assets
Cash and equivalents	$	342,270	$	341,098

Receivables, net of allowance of $5,181 at 7/27/2024 and $5,076 at 4/27/2024	121,047		139,213
Inventories, net	271,790		263,237
Other current assets	99,268		93,260
Total current assets	834,375		836,808
Property, plant and equipment, net	298,781		298,224
Goodwill	220,109		214,453
Other intangible assets, net	48,684		47,251
Deferred income taxes – long-term	8,969		10,283
Right of use lease assets	448,834		446,466
Other long-term assets, net	57,863		59,957
Total assets	$	1,917,615	$	1,913,442

Current liabilities
Accounts payable	$	94,165	$	96,486


Lease liabilities, short-term	77,247		77,027
Accrued expenses and other current liabilities	268,530		263,768
Total current liabilities	439,942		437,281

Lease liabilities, long-term	407,009		404,724
Other long-term liabilities	60,188		58,077
Shareholders' equity
Preferred shares – 5,000 authorized; none issued	—		—
Common shares, $1.00 par value – 150,000 authorized; 42,015 outstanding at 7/27/2024 and 42,440 outstanding at 4/27/2024	42,015		42,440
Capital in excess of par value	371,421		368,485
Retained earnings	590,308		598,009
Accumulated other comprehensive loss	(4,535)		(5,870)
Total La-Z-Boy Incorporated shareholders' equity	999,209		1,003,064
Noncontrolling interests	11,267		10,296
Total equity	1,010,476		1,013,360
Total liabilities and equity	$	1,917,615	$	1,913,442

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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LA-Z-BOY INCORPORATED

CONSOLIDATED STATEMENT OF CASH FLOWS


	Quarter Ended
(Unaudited, amounts in thousands)	7/27/2024		7/29/2023
Cash flows from operating activities
Net income	$	26,804	$	27,926
Adjustments to reconcile net income to cash provided by operating activities
(Gain)/loss on disposal and impairment of assets	(117)		113

(Gain)/loss on sale of investments	(80)		307
Provision for doubtful accounts	91		(405)
Depreciation and amortization	12,147		10,211
Amortization of right-of-use lease assets	22,722		17,265
Lease impairment/(settlement)	—		(1,175)
Equity-based compensation expense	3,175		2,526
Change in deferred taxes	1,999		602



Change in receivables	17,783		14,769
Change in inventories	(6,912)		9,271
Change in other assets	(6,668)		(2,820)
Change in payables	952		(8,565)
Change in lease liabilities	(23,306)		(17,882)
Change in other liabilities	3,728		(26,230)
Net cash provided by operating activities	52,318		25,913

Cash flows from investing activities
Proceeds from disposals of assets	158		4,031

Capital expenditures	(15,620)		(13,457)
Purchases of investments	(2,813)		(11,407)
Proceeds from sales of investments	7,879		12,404
Acquisitions	(6,797)		(4,250)
Net cash used for investing activities	(17,193)		(12,679)

Cash flows from financing activities

Payments on finance lease liabilities	(145)		(67)


Stock issued for stock and employee benefit plans, net of shares withheld for taxes	7,874		(1,978)
Repurchases of common stock	(33,673)		(10,007)
Dividends paid to shareholders	(8,371)		(7,852)

Net cash used for financing activities	(34,315)		(19,904)

Effect of exchange rate changes on cash and equivalents	362		242
Change in cash, cash equivalents and restricted cash	1,172		(6,428)
Cash, cash equivalents and restricted cash at beginning of period	341,098		346,678
Cash, cash equivalents and restricted cash at end of period	$	342,270	$	340,250

Supplemental disclosure of non-cash investing activities
Capital expenditures included in payables	$	2,583	$	7,188

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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LA-Z-BOY INCORPORATED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY


(Unaudited, amounts in thousands, except per share data)	Common Shares		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Non-Controlling Interests		Total
At April 27, 2024	$	42,440	$	368,485	$	598,009	$	(5,870)	$	10,296	$	1,013,360
Net income	—		—		26,159		—		645		26,804
Other comprehensive income	—		—		—		1,335		326		1,661
Stock issued for stock and employee benefit plans, net of cancellations and withholding tax	508		10,086		(2,720)		—		—		7,874
Repurchases of 933 shares of common stock	(933)		(10,325)		(22,658)		—		—		(33,916)
Stock option and restricted stock expense	—		3,175		—		—		—		3,175
Dividends declared and paid ($0.20/share)	—		—		(8,371)		—		—		(8,371)
Dividends declared not paid ($0.20/share)	—		—		(111)		—		—		(111)
At July 27, 2024	$	42,015	$	371,421	$	590,308	$	(4,535)	$	11,267	$	1,010,476


(Unaudited, amounts in thousands, except per share data)	Common Shares		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss		Non-Controlling Interests		Total
At April 29, 2023	$	43,318	$	358,891	$	545,155	$	(5,528)	$	10,261	$	952,097
Net income	—		—		27,479		—		447		27,926
Other comprehensive income (loss)	—		—		—		1,330		(40)		1,290
Stock issued for stock and employee benefit plans, net of cancellations and withholding tax	149		(221)		(1,906)		—		—		(1,978)
Repurchases of 357 shares of common stock	(357)		(4,512)		(5,138)		—		—		(10,007)
Stock option and restricted stock expense	—		2,526		—		—		—		2,526
Dividends declared and paid ($0.1815/share)	—		—		(7,852)		—		—		(7,852)
Dividends declared not paid ($0.1815/share)	—		—		(72)		—		—		(72)
At July 29, 2023	$	43,110	$	356,684	$	557,666	$	(4,198)	$	10,668	$	963,930

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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LA-Z-BOY INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1: Basis of Presentation

The accompanying consolidated financial statements include the consolidated accounts of La-Z-Boy Incorporated and our majority-owned subsidiaries (collectively, the "Company"). We derived the April 27, 2024 balance sheet from our audited financial statements. We prepared the interim financial information in conformity with generally accepted accounting principles ("US GAAP"), which we applied on a basis consistent with those reflected in our fiscal 2024 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”), but the information does not include all of the disclosures required by US GAAP. In management’s opinion, the interim financial information includes all adjustments and accruals, consisting only of normal recurring adjustments (except as otherwise disclosed), that are necessary for a fair statement of results for the respective interim periods. The interim results reflected in the accompanying financial statements are not necessarily indicative of the results of operations that will occur for the full fiscal year ending April 26, 2025.

Accounting Pronouncements Adopted in Fiscal 2025

The following table summarizes Accounting Standards Updates ("ASUs"), which were adopted in fiscal 2025, but did not have a material impact on our accounting policies or our consolidated financial statements and related disclosures.

SEC Form 10-Q filed by La-Z-Boy Incorporated