La-Z-Boy’s first quarter delivered sales growth amid a challenging consumer environment, with management highlighting the benefits of new store openings and acquisitions, particularly in the Retail segment. CEO Melinda Whittington credited the company’s “vertically integrated model and agile supply chain” for enabling continued growth despite persistent economic and industry volatility. Management noted that while company-owned store sales rose, same-store sales declined, reflecting broader consumer caution. The quarter’s performance was further shaped by targeted pricing actions and swift operational responses to supply chain disruptions, including storm-related factory damage. CFO Taylor Luebke emphasized that improved sourcing and lower input costs helped offset tariff impacts and cost pressures.
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La-Z-Boy (LZB) Q1 CY2025 Highlights:
- Revenue: $570.9 million vs analyst estimates of $558.6 million (3.1% year-on-year growth, 2.2% beat)
- Adjusted EPS: $0.92 vs analyst expectations of $0.93 (1.1% miss)
- Adjusted EBITDA: $65.26 million vs analyst estimates of $63.5 million (11.4% margin, 2.8% beat)
- Revenue Guidance for Q2 CY2025 is $500 million at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: 5.2%, down from 9.1% in the same quarter last year
- Locations: 903 at quarter end, up from 882 in the same quarter last year
- Market Capitalization: $1.56 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions La-Z-Boy’s Q1 Earnings Call
- Robert Kenneth Griffin (Raymond James) asked about drivers for wholesale margin expansion and the impact of the distribution redesign project. CFO Taylor Luebke explained that approximately half of the planned margin improvement is within the company’s control, with distribution redesign playing a major role, while the balance relies on a stronger industry backdrop.
- Griffin further inquired about the timing and rationale for launching the distribution network overhaul. CEO Melinda Whittington stated that recent acquisitions and scale make it timely, with expected benefits including lower overhead, optimized routes, and improved delivery experience.
- Griffin also requested updates on current written order trends, especially post-President’s Day. Whittington noted that Memorial Day performance was solid and reiterated the need to keep consumers engaged amid ongoing caution.
- Anthony Chester Lebiedzinski (Sidoti & Company) questioned the impact of tariffs and the company’s pricing response. Luebke detailed that nominal pricing adjustments and agile supply chain moves have been used to mitigate impacts, while Whittington emphasized ongoing monitoring of trade policies.
- Bradley Bingham Thomas (KeyBanc Capital Markets) asked about pricing strategy and competitive positioning amid input cost inflation. Whittington highlighted La-Z-Boy’s domestic manufacturing advantage and stated that only modest price increases have been needed so far, with no significant pricing moves planned unless conditions change.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) the pace and effectiveness of La-Z-Boy’s distribution network redesign, (2) ongoing performance of new and acquired company-owned stores, and (3) the impact of the brand refresh on customer engagement and sales trends. Additionally, developments in tariff policy and the trajectory of consumer demand will be pivotal in assessing the company’s execution against its Century Vision strategy.
La-Z-Boy currently trades at $39.41, up from $38.79 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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