La-Z-Boy (LZB) Q4 2024 earnings summary

Executive summary

• Q4 sales reached $554M, up 22% from pre-pandemic Q4 but down 1% year-over-year due to prior backlog deliveries; full-year sales were just over $2B, flat year-over-year when adjusting for pandemic backlog, or $2.05B, down 13% year-over-year.

• Q4 non-GAAP operating margin was 9.4% and EPS $0.95; GAAP EPS was $0.91, up 15% year-over-year.

• Operating cash flow was $158M for the year and $53M in Q4; ended year with $341M in cash and no external debt.

• $85M returned to shareholders via dividends and buybacks; dividend increased 10% for third consecutive year.

• Expanded company-owned store network, now over half of total locations, and continued execution of strategic initiatives including acquisitions and new store openings.

Financial highlights

• Q4 consolidated sales down 1% year-over-year, but up 22% from pre-pandemic levels; Q4 GAAP operating margin 9.1%, non-GAAP 9.4%.

• Q4 GAAP net income $39.3M (up 14% YoY); non-GAAP net income $40.8M (down 5% YoY).

• Full-year non-GAAP operating income $159M, down 29% year-over-year; non-GAAP EPS $2.98 vs. $3.86.

• Q4 GAAP EPS $0.91 vs. $0.79 prior year; non-GAAP EPS $0.95 vs. $0.99.

• Non-GAAP gross margin up 210 bps year-over-year; SG&A dollars down 2%.

Outlook and guidance

• Fiscal 2025 industry expected to decline up to 5%, with improvement likely late in the year as interest rates ease.

• Modest sales growth expected for fiscal 2025; Q1 sales guidance $475M–$495M, operating margin 6%–7%.

• 12–15 new store openings planned, mainly in the second half of the year.

• Capex expected at $70M–$80M; continued share repurchases at pre-COVID levels.