La-Z-Boy Reports Record Fiscal 2023 Second-Quarter Results; Increases Dividend By 10%


MONROE, Mich., Nov. 30, 2022 (GLOBE NEWSWIRE) -- La-Z-Boy Incorporated LZB, a global leader in residential furniture, today reported record-setting second-quarter results for the period ending October 29, 2022.

Fiscal 2023 second-quarter highlights versus prior year:

  • Consolidated sales increased 6% to $611 million, a second-quarter record

  • GAAP operating profit increased by 14%
    - Non-GAAP operating profit increased by 19%
    - GAAP operating margin increased 70 basis points to 10.1%
    - Non-GAAP operating margin increased 100 basis points to 10.0%
  • GAAP EPS increased by 20%
    - Non-GAAP EPS increased by 24%
  • Retail segment sales increased 31% to $252 million, an all-time quarterly record
    - Operating profit also all-time quarterly record

Melinda D. Whittington, President and Chief Executive Officer of La-Z-Boy Incorporated, said, "We delivered record second-quarter sales and operating performance in a challenging environment led by our company-owned Retail business. Strong supply chain execution in the period allowed us to reduce our backlog and improve service to customers and consumers as we continue to shorten lead times and move closer to delivering on our brand promise — quality custom furniture with speed to market. On the strength of that value proposition, our business remains larger than pre-pandemic levels as consumers continue to place a value on the comfort of their homes and entrust La-Z-Boy to deliver it."

Whittington added, "As we face near-term macroeconomic and geopolitical headwinds that have slowed the pace of written sales, we are operating from a position of brand and financial strength. We remain focused on the long term, controlling what we can, and positioning the company to move through this period with ongoing operational excellence. We are pivoting quickly to respond to market dynamics, including proactively aligning our cost structure with demand, and making prudent investments to drive long-term profitable growth through Century Vision. As we tackle what lies ahead, we are confident we will navigate the environment well, build for the future, and emerge stronger while increasing market share throughout these challenging times."

Key Results:

  Quarter Ended  
(Unaudited, amounts in thousands, except per share data) 10/29/2022 10/23/2021  Change
Sales $611,332 $575,889 6%
GAAP operating income  61,883  54,113 14%
Non-GAAP operating income  61,146  51,595 19%
GAAP operating margin  10.1%  9.4% 70 bps
Non-GAAP operating margin  10.0%  9.0% 100 bps
GAAP net income attributable to La-Z-Boy Incorporated  46,077  39,516 17%
Non-GAAP net income attributable to La-Z-Boy Incorporated  45,357  37,896 20%
Diluted weighted average common shares  43,182  44,423  
GAAP diluted earnings per share $1.07 $0.89 20%
Non-GAAP diluted earnings per share $1.05 $0.85 24%

Liquidity Measures:

  Six Months Ended   Six Months Ended
(Unaudited, amounts in thousands) 10/29/2022 10/23/2021 (Unaudited, amounts in thousands) 10/29/2022 10/23/2021
Free Cash Flow     Cash Returns to Shareholders    
Operating cash flow $30,954  $15,434  Share repurchases $5,004 $50,640
Capital expenditures  (40,442)  (33,314) Dividends  14,161  13,398
Free cash flow $(9,488) $(17,880) Cash returns to shareholders $19,165 $64,038

(Unaudited, amounts in thousands) 10/29/2022 10/23/2021
Cash and cash equivalents $204,626 $293,341
Restricted cash  3,268  3,266
Total cash, cash equivalents and restricted cash $207,894 $296,607

FY23 Q2 Results vs. FY22 Q2:

Consolidated Results:

  • Consolidated sales in the second quarter of fiscal 2023 increased 6% to $611 million, with the realization of pricing and surcharge actions and the positive effects of a favorable product and channel mix offsetting lower delivered unit volume
  • Consolidated GAAP operating margin was 10.1% versus 9.4%
  • Consolidated non-GAAP(1) operating margin was 10.0% versus 9.0%
     - Improved operating margin was driven primarily by a focus on manufacturing and delivering our consumer sold backlog for our company-owned Retail stores and the benefit of pricing and surcharge actions, partially offset by higher input costs and marketing investments
  • GAAP diluted EPS increased 20% to $1.07 from $0.89; non-GAAP(1) diluted EPS increased 24% to $1.05 from $0.85

Retail Segment:

  • Sales:
     - Delivered sales increased 31% to an all-time quarterly record of $252 million; delivered same-store sales increased 25%, as we improved service to consumers and moved closer to pre-pandemic lead times in the period
     - Total written sales for the company-owned La-Z-Boy Furniture Galleries® stores (the company's Retail segment) decreased 5%, reflecting softer demand across the industry driven by economic uncertainty and weaker consumer sentiment
    • Written same-store sales for the company-owned La-Z-Boy Furniture Galleries® stores decreased 10%
    • Written same-store sales were 12% higher than pre-pandemic levels (FY20 Q2)
  • Operating Performance:
     - Non-GAAP(1) operating margin and operating profit increased to all-time records of 16.5%, and $42 million, respectively, versus 12.5%, and $24 million in last year's second quarter, primarily driven by fixed-cost leverage on higher delivered sales volume

Wholesale Segment:

  • Sales:
     - Increased 2% to a second-quarter record of $446 million driven by the realization of pricing and surcharge actions coupled with favorable channel and product mix; these factors were partially offset by lower volume, primarily the result of some dealers delaying receipt of finished goods due to warehouse constraints
  • Operating Margin:
     - Non-GAAP(1) operating margin was 8.6%, 50 basis points below prior year; pricing and surcharge actions were more than offset by increased raw material costs, plant inefficiencies due to lower volume, and increased marketing spend to pre-pandemic levels

Corporate & Other:

  • Joybird delivered sales decreased 5% to $38 million, and written sales declined 27% versus the year-ago second quarter, reflecting both slowing e-commerce trends and the effects of changes in campaign execution with a key marketing partner which have since been reversed
  • Joybird posted a loss for the period, primarily reflecting lower volume, an unfavorable shift in product mix, and a lower return on advertising spend

Balance Sheet and Cash Flow as of FY23 Q2

  • Ended the quarter with $208 million in cash(2) and $19 million in short-term investments to enhance returns on cash, and no external debt
  • Year to date, generated $31 million in cash from operating activities versus $15 million in the prior-year six-month period
  • Year to date, spent $40 million on capital expenditures, primarily related to La-Z-Boy Furniture Galleries® store projects, new stores, and upgrades at our manufacturing and distribution facilities
  • Year to date, returned $19 million to shareholders, including $14 million in dividends and $5 million in share repurchases; the company has approximately 7.3 million shares available for repurchase under its authorized share repurchase program


On November 30, 2022, the Board of Directors declared a quarterly cash dividend of $0.1815 per share on the common stock of the company, an increase of 10% over the prior quarter. The dividend will be paid on December 20, 2022, to shareholders of record on December 12, 2022.


Bob Lucian, Chief Financial Officer of La-Z-Boy Incorporated, said, "As we successfully reduce our backlog to enable pre-pandemic consumer lead times, we expect the second half of our fiscal year to be impacted by continued external headwinds on consumer demand. As a result, we estimate delivered sales for the fiscal 2023 third quarter to be in a range of about $525 million to $535 million, and consolidated non-GAAP operating margin to be in a range of about 7.0% to 7.5%."

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

  • a purchase accounting benefit related to acquisitions completed in prior periods totaling $0.4 million pre-tax, or $0.01 per diluted share, primarily due to the write-off of the Joybird contingent consideration liability based on forecasted future performance, with $0.4 million included in operating income and less than $0.1 million included in interest expense.
  • a benefit of $0.3 million pre-tax, or $0.01 per diluted share, related to our business realignment plan, including costs associated with the closure of our Newton, Mississippi manufacturing facility.

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

  • purchase accounting charges related to acquisitions completed in prior periods totaling $0.9 million pre-tax, or $0.02 per diluted share, with $0.8 million included in operating income and $0.1 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.

Please refer to the accompanying "Reconciliation of GAAP to Non-GAAP Financial Measures" for detailed information on calculating the Non-GAAP 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

Conference Call

La-Z-Boy will hold a conference call with the investment community on Thursday, December 1, 2022, at 8:30 a.m. Eastern time. The toll-free dial-in number is 888.506.0062; international callers may use 973.528.0011. Enter Participant Access Code 642911.

The call will be webcast live, with corresponding slides, and archived on the Internet. It will be available at 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: 46910. The webcast replay will be available for one year.

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, business and industry and the effect of the coronavirus ("COVID") pandemic on our business operations and financial results.

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 2022 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 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: 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:

Background Information

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 England, La-Z-Boy, American Drew®, Hammary®, Kincaid® and the company's international wholesale and manufacturing businesses. The company-owned Retail segment includes 169 of the 351 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 351 stand-alone La-Z-Boy Furniture Galleries® stores and 526 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

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, Non-GAAP net income attributable to La-Z-Boy Incorporated), which may exclude, as applicable, business realignment charges and purchase accounting charges. 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 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. 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.

In addition, this press release references the Non-GAAP financial measure of "Non-GAAP operating margin" for a future period. Non-GAAP operating margin may exclude items such as pre-tax purchase accounting charges and pre-tax business realignment charges. These and other not presently determinable items could have a material impact on the determination of operating margin on a GAAP basis and due to the probable variability and limited visibility of excluded items, therefore, we have not provided a reconciliation of Non-GAAP operating margin for future periods in this press release.

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 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 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.

Contact: Kathy Liebmann(734)



  Quarter Ended Six Months Ended
(Unaudited, amounts in thousands, except per share data) 10/29/2022 10/23/2021 10/29/2022 10/23/2021
Sales $611,332  $575,889  $1,215,423  $1,100,672 
Cost of sales  350,596   352,594   713,227   675,295 
Gross profit  260,736   223,295   502,196   425,377 
Selling, general and administrative expense  198,853   169,182   387,670   336,893 
Operating income   61,883   54,113   114,526   88,484 
Interest expense  (119)  (242)  (278)  (553)
Interest income  1,138   106   1,612   223 
Other income (expense), net  183   1,031   228   938 
Income before income taxes  63,085   55,008   116,088   89,092 
Income tax expense  16,306   14,650   30,369   23,468 
Net income  46,779   40,358   85,719   65,624 
Net income attributable to noncontrolling interests  (702)  (842)  (1,154)  (1,542)
Net income attributable to La-Z-Boy Incorporated $46,077  $39,516  $84,565  $64,082 
Basic weighted average common shares  43,104   44,251   43,098   44,662 
Basic net income attributable to La-Z-Boy Incorporated per share $1.07  $0.89  $1.96  $1.43 
Diluted weighted average common shares  43,182   44,423   43,174   44,915 
Diluted net income attributable to La-Z-Boy Incorporated per share $1.07  $0.89  $1.96  $1.43 


(Unaudited, amounts in thousands, except par value) 10/29/2022 4/30/2022
Current assets    
Cash and equivalents $204,626  $245,589 
Restricted cash  3,268   3,267 
Receivables, net of allowance of $3,946 at 10/29/2022 and $3,406 at 4/30/2022  160,035   183,747 
Inventories, net  342,728   303,191 
Other current assets  146,656   215,982 
Total current assets  857,313   951,776 
Property, plant and equipment, net  269,240   253,144 
Goodwill  203,459   194,604 
Other intangible assets, net  38,640   33,971 
Deferred income taxes – long-term  10,633   10,632 
Right of use lease assets  404,495   405,755 
Other long-term assets, net  73,760   82,207 
Total assets $1,857,540  $1,932,089 
Current liabilities    
Accounts payable $106,614  $104,025 
Lease liabilities, short-term  77,100   75,271 
Accrued expenses and other current liabilities  367,008   496,393 
Total current liabilities  550,722   675,689 
Lease liabilities, long-term  353,444   354,843 
Other long-term liabilities  69,588   81,935 
Shareholders' equity    
Preferred shares – 5,000 authorized; none issued      
Common shares, $1.00 par value – 150,000 authorized; 43,136 outstanding at 10/29/22 and 43,089 outstanding at 4/30/22  43,136   43,089 
Capital in excess of par value  347,036   342,252 
Retained earnings  495,003   431,181 
Accumulated other comprehensive loss  (10,517)  (5,797)
Total La-Z-Boy Incorporated shareholders' equity  874,658   810,725 
Noncontrolling interests  9,128   8,897 
Total equity  883,786   819,622 
Total liabilities and equity $1,857,540  $1,932,089 


  Six Months Ended
(Unaudited, amounts in thousands) 10/29/2022 10/23/2021
Cash flows from operating activities    
Net income $85,719  $65,624 
Adjustments to reconcile net income to cash provided by operating activities    
(Gain)/loss on disposal of assets  1   (3,151)
(Gain)/loss on sale of investments  77   (218)
Provision for doubtful accounts  694   (944)
Depreciation and amortization  19,258   17,785 
Amortization of right-of-use lease assets  38,580   34,368 
Equity-based compensation expense  5,079   6,354 
Change in deferred taxes  27   170 
Change in receivables  19,550   (33,937)
Change in inventories  (36,771)  (59,336)
Change in other assets  4,890   (20,666)
Change in payables  8,027   22,683 
Change in lease liabilities  (39,380)  (34,598)
Change in other liabilities  (74,797)  21,300 
Net cash provided by operating activities  30,954   15,434 
Cash flows from investing activities    
Proceeds from disposals of assets  63   3,998 
Capital expenditures  (40,442)  (33,314)
Purchases of investments  (4,714)  (21,426)
Proceeds from sales of investments  12,660   22,666 
Acquisitions  (11,705)  (4,396)
Net cash used for investing activities  (44,138)  (32,472)
Cash flows from financing activities    
Payments on debt and finance lease liabilities  (61)  (60)
Holdback payments for acquisition purchases  (5,000)  (13,500)
Stock issued for stock and employee benefit plans, net of shares withheld for taxes  (1,711)  (1,870)
Repurchases of common stock  (5,004)  (50,640)
Dividends paid to shareholders  (14,161)  (13,398)
Dividends paid to minority interest joint venture partners (1)     (1,260)
Net cash used for financing activities  (25,937)  (80,728)
Effect of exchange rate changes on cash and equivalents  (1,841)  (330)
Change in cash, cash equivalents and restricted cash  (40,962)  (98,096)
Cash, cash equivalents and restricted cash at beginning of period  248,856   394,703 
Cash, cash equivalents and restricted cash at end of period $207,894  $296,607 
Supplemental disclosure of non-cash investing activities    
Capital expenditures included in payables $4,251  $7,900 

(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.


  Quarter Ended Six Months Ended
(Unaudited, amounts in thousands) 10/29/2022 10/23/2021 10/29/2022 10/23/2021
Wholesale segment:        
Sales to external customers $319,613  $341,823  $643,341  $645,440 
Intersegment sales  126,618   97,269   244,708   187,151 
Wholesale segment sales  446,231   439,092   888,049   832,591 
Retail segment sales  252,152   192,420   488,173   374,267 
Corporate and Other:        
Sales to external customers  39,567   41,646   83,909   80,965 
Intersegment sales  4,070   3,367   8,458   7,682 
Corporate and Other sales  43,637   45,013   92,367   88,647 
Eliminations  (130,688)  (100,636)  (253,166)  (194,833)
Consolidated sales $611,332  $575,889  $1,215,423  $1,100,672 
Operating Income (Loss)        
Wholesale segment $38,476  $43,128  $64,618  $61,459 
Retail segment  41,500   23,962   79,652   44,400 
Corporate and Other  (18,093)  (12,977)  (29,744)  (17,375)
Consolidated operating income $61,883  $54,113  $114,526  $88,484 


  Quarter Ended Six Months Ended
(Amounts in thousands, except per share data) 10/29/2022 10/23/2021 10/29/2022 10/23/2021
GAAP gross profit $260,736  $223,295  $502,196  $425,377 
Purchase accounting charges - incremental expense upon the sale of inventory acquired at fair value  132      132    
Business realignment (gain)/charges  (319)     609    
Non-GAAP gross profit $260,549  $223,295  $502,937  $425,377 
GAAP SG&A $198,853  $169,182  $387,670  $336,893 
Purchase accounting gain/(charges) - adjustment to the fair value of contingent consideration, amortization of intangible assets and retention agreements  550   (759)  298   (1,019)
Business realignment gain     3,277      3,277 
Non-GAAP SG&A $199,403  $171,700  $387,968  $339,151 
GAAP operating income $61,883  $54,113  $114,526  $88,484 
Purchase accounting (gain)/charges  (418)  759   (166)  1,019 
Business realignment (gain)/charges  (319)  (3,277)  609   (3,277)
Non-GAAP operating income $61,146  $51,595  $114,969  $86,226 
GAAP income before income taxes $63,085  $55,008  $116,088  $89,092 
Purchase accounting (gain)/charges recorded as part of gross profit, SG&A, and interest expense  (372)  896   (27)  1,336 
Business realignment (gain)/charges  (319)  (3,277)  609   (3,277)
Non-GAAP income before income taxes $62,394  $52,627  $116,670  $87,151 
GAAP net income attributable to La-Z-Boy Incorporated $46,077  $39,516  $84,565  $64,082 
Purchase accounting (gain)/charges recorded as part of gross profit, SG&A and interest expense  (372)  896   (27)  1,336 
Tax effect of purchase accounting  (112)  (105)  (203)  (219)
Business realignment (gain)/charges  (319)  (3,277)  609   (3,277)
Tax effect of business realignment  84   865   (160)  859 
Non-GAAP net income attributable to La-Z-Boy Incorporated $45,357  $37,896  $84,784  $62,781 
GAAP net income attributable to La-Z-Boy Incorporated per diluted share $1.07  $0.89  $1.96  $1.43 
Purchase accounting (gain)/charges, net of tax, per share  (0.01)  0.02   (0.01)  0.03 
Business realignment (gain)/charges, net of tax, per share  (0.01)  (0.06)  0.01   (0.06)
Non-GAAP net income attributable to La-Z-Boy Incorporated per diluted share $1.05  $0.85  $1.96  $1.40 


  Quarter Ended Six Months Ended
(Amounts in thousands) 10/29/2022 % of sales 10/23/2021 % of sales 10/29/2022 % of sales 10/23/2021 % of sales
GAAP operating income (loss)                
Wholesale segment $38,476  8.6% $43,128  9.8% $64,618  7.3% $61,459  7.4%
Retail segment  41,500  16.5%  23,962  12.5%  79,652  16.3%  44,400  11.9%
Corporate and Other  (18,093) N/M   (12,977) N/M   (29,744) N/M   (17,375) N/M 
Consolidated GAAP operating income $61,883  10.1% $54,113  9.4% $114,526  9.4% $88,484  8.0%
Non-GAAP items affecting operating income                
Wholesale segment $(269)   $(3,217)   $712    $(3,157)  
Retail segment  132          132        
Corporate and Other  (600)    699     (401)    899   
Consolidated Non-GAAP items affecting operating income $(737)   $(2,518)   $443    $(2,258)  
Non-GAAP operating income (loss)                
Wholesale segment $38,207  8.6% $39,911  9.1% $65,330  7.4% $58,302  7.0%
Retail segment  41,632  16.5%  23,962  12.5%  79,784  16.3%  44,400  11.9%
Corporate and Other  (18,693) N/M   (12,278) N/M   (30,145) N/M   (16,476) N/M 
Consolidated Non-GAAP operating income $61,146  10.0% $51,595  9.0% $114,969  9.5% $86,226  7.8%
N/M - Not Meaningful                

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