Key Takeaways
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- La-Z-Boy’s fiscal Q1 profit dropped to $18.2 million (44 cents/share) from $26.2 million (61 cents/share) a year earlier.
- Same-store sales in retail fell 4%, driven by lower foot traffic and weaker consumer demand, partially offset by higher average ticket and design sales.
- Joybird brand sales declined 14%, with in-store sales outperforming online.
- International wholesale business also weighed on sales due to a “significant customer transition.”
- Revenue fell 1% to $492.2 million, slightly above analyst expectations.
- CEO Melinda Whittington cited soft demand across the industry and said the company is exploring options to address financial pressures from noncore business segments.
- La-Z-Boy projects Q2 sales between $510 million and $530 million, below analyst estimates of $532.2 million, reflecting ongoing macroeconomic challenges.
- The company is expanding in the Southeast with a 15-store acquisition expected to close in late October.
- Shares dropped 18% in after-hours trading, with the stock down 10% year-to-date.
- Industry peers like Wayfair report signs of stabilization after years of decline, highlighting mixed signals in the furniture sector.
What’s Happening?
La-Z-Boy is facing headwinds from reduced consumer foot traffic and weaker sales in its Joybird brand, contributing to a decline in profit and sales. The company is navigating a challenging retail environment and adjusting its strategy, including store acquisitions, to offset pressures.
Why Does It Matter?
The results reflect broader softness in the furniture industry amid changing consumer behavior and economic uncertainty. La-Z-Boy’s performance and strategic moves will be closely watched as indicators of the sector’s health and recovery prospects.
What’s Next?
La-Z-Boy’s upcoming quarters will reveal whether the company can stabilize sales and profitability amid ongoing macroeconomic challenges. The success of its expansion and efforts to manage noncore business pressures will be key to its turnaround.
