La-Z-Boy (LZB) investor relations material

Executive summary

• Consolidated sales for the quarter were $476 million, down 3% year-over-year, or down 1% excluding the divestiture of the wholesale casegoods business, primarily due to lower wholesale volume and divestitures, partially offset by retail acquisitions and new store openings.

• Retail segment written sales rose 16% year-over-year, with delivered sales up 10% and same-store sales up 3%, driven by strong in-store execution and digital enhancements.

• GAAP operating loss was $2 million due to one-time plant exit charges and supply chain optimization; adjusted operating income was $19 million.

• Net loss attributable to shareholders was $2.3 million, or $(0.06) per diluted share, while adjusted diluted EPS was $0.43, reflecting one-time charges related to plant closures and divestitures.

• $35 million was returned to shareholders via share repurchases and dividends, a 62% increase year-over-year.

Financial highlights

• Consolidated sales decreased 3% year-over-year to $476 million; excluding casegoods divestiture, sales fell 1%.

• GAAP operating margin was (0.4)% versus 4.5% last year; adjusted operating margin was 3.9% versus 4.8%.

• Adjusted gross margin increased 290 basis points year-over-year, driven by retail mix and favorable tariff impacts; GAAP gross margin was 43.9%.

• Adjusted diluted EPS was $0.43, down from $0.47 last year; GAAP diluted EPS was $(0.06).

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

Outlook and guidance

• Second quarter sales expected between $500–$520 million, representing -1% to +2% growth excluding casegoods divestiture.

• Adjusted operating margin forecasted at 4.0–5.5%, reflecting ongoing investments and transformation costs.

• Capital expenditures for the year projected at $90–$110 million, focused on distribution, manufacturing, and retail expansion.

• Management expects a normalized effective tax rate for the full year, following one-time impacts in the quarter.

• Focus remains on expanding retail, digital transformation, and supply chain optimization.