La-Z-Boy Reports Record Sales for the Fiscal 2022 Second Quarter and Sequential Operating Margin Improvement

Rhea-AI Summary

La-Z-Boy reported strong operating results for the second quarter of fiscal 2022, ending October 23, 2021. Sales surged 25% to $576 million compared to the prior year, driven by increased capacity and pricing actions. GAAP EPS rose to $0.89 from $0.75, while non-GAAP EPS increased to $0.85 from $0.82. However, operating margins decreased due to rising commodity costs. The company announced a 10% increase in its quarterly dividend to $0.165 per share, payable on December 15, 2021. CEO Melinda Whittington expressed confidence in sustainable sales momentum amid ongoing supply chain challenges.

Positive

• Sales increased 25% to $576 million, reflecting strong order trends.
• GAAP EPS increased to $0.89, up from $0.75 in the prior year.
• Quarterly dividend raised by 10% to $0.165 per share.
• Robust demand with a significant backlog.

Negative

• GAAP operating margin declined to 9.4% from 10.4% year-over-year.
• Increased costs due to supply chain disruptions impacted margins.

Increases Quarterly Dividend

MONROE, Mich., Nov. 16, 2021 (GLOBE NEWSWIRE) -- La-Z-Boy Incorporated (NYSE: LZB), a global leader in residential furniture, today reported operating results for the fiscal 2022 second quarter ended October 23, 2021.

Fiscal 2022 second quarter versus Fiscal 2021 second quarter:

• Consolidated sales increased 25% to $576 million
• Strong written order trends versus pre-pandemic FY20 Q2
• Consolidated operating margin:
  • GAAP: 9.4% versus 10.4%
  • Non-GAAP⁽¹⁾: 9.0% versus 11.1%
    • Improved sequentially versus 6.6% in the fiscal 2022 first quarter
• Net income attributable to La-Z-Boy Incorporated per diluted share (“EPS”):
  • GAAP: $0.89 versus $0.75
  • Non-GAAP⁽¹⁾: $0.85 versus $0.82
• $22 million returned to shareholders through share repurchases and dividends in FY22 Q2

Melinda D. Whittington, President and Chief Executive Officer of La-Z-Boy, said, "La-Z-Boy Incorporated again delivered all-time, record-high sales for the quarter as we continued to increase capacity to service ongoing demand and our significant backlog, and realized pricing and surcharge actions to help offset rising raw material costs. Even while navigating a challenging operating environment with significant widespread supply chain disruption, we delivered strong results, including improved margins versus last quarter. Our business is much larger today than it was pre-pandemic, and demand remains robust across the entire enterprise. With strong brands and vast distribution through multiple channels, we believe our sales momentum is sustainable. As we execute Century Vision, our winning strategy for growth to our Centennial year in 2027, we are making strategic investments across our business to drive market share gains, profitable growth and excellent returns for all stakeholders."

Consolidated sales in the second quarter of fiscal 2022 increased 25% to $576 million versus the fiscal 2021 second quarter, reflecting ongoing capacity increases and pricing and surcharge actions. Consolidated sales for the fiscal 2022 second quarter were 29% higher than the pre-pandemic fiscal 2020 second quarter, for a compounded annual growth rate of 14% over the last two years.

Consolidated GAAP operating margin was 9.4% versus 10.4% in the prior-year second quarter. Consolidated non-GAAP⁽¹⁾ operating margin was 9.0% versus 11.1% in the prior-year second quarter and improved sequentially from 6.6% in the fiscal 2022 first quarter. Operating margin for the period was primarily impacted by significant increases in commodity and freight costs, start-up costs associated with the expansion of manufacturing capacity and labor challenges in the company's Wholesale business, partially offset by pricing and surcharge actions and fixed-cost leverage on higher volume.

GAAP diluted EPS increased to $0.89 for the fiscal 2022 second quarter versus $0.75 in the prior-year quarter. Non-GAAP⁽¹⁾ diluted EPS increased to $0.85 versus $0.82 in the prior-year second quarter.

Wholesale Segment:

• Sales:
  • Increased 28% to $439 million in the fiscal 2022 second quarter compared with the fiscal 2021 second quarter, and increased 12% sequentially from the fiscal 2022 first quarter as the company increased capacity and realized pricing and surcharge actions
  • Compared with the pre-pandemic fiscal 2020 second quarter, sales increased 25% in the fiscal 2022 second quarter, for a compounded annual growth rate of 12% over the two years
• Operating Margin:
  • Non-GAAP⁽¹⁾ operating margin in the fiscal 2022 second quarter was 9.1% versus 12.2% for the prior-year period, primarily reflecting higher raw material and freight costs, start-up costs for new facilities, and labor challenges, partially offset by pricing and surcharge actions and fixed-cost leverage on higher volume
  • Non-GAAP⁽¹⁾ operating margin improved 440 basis points sequentially from the fiscal 2022 first quarter operating margin of 4.7%

Written same-store sales for the entire La-Z-Boy Furniture Galleries^® network:

• Decreased 6.0% for the fiscal 2022 second quarter compared with the unusually strong fiscal 2021 second quarter (+34% versus the fiscal 2020 second quarter) following COVID-related store closures
• Compared with the pre-pandemic fiscal 2020 second quarter, written same-store sales increased 26% for the fiscal 2022 second quarter, for a compounded annual growth rate of 12% over the two years, reflecting continued significant growth in the business

Retail segment:

• Delivered sales:
  • Increased 19% to $192 million in the second quarter of fiscal 2022 compared with the prior-year second quarter
  • Compared with the pre-pandemic fiscal 2020 second quarter, delivered sales increased 30%, for a compounded annual growth rate of 14% over the two years
  • Delivered same-store sales increased 17% in the fiscal 2022 second quarter versus the year-ago period
• Written same-store sales for the company-owned La-Z-Boy Furniture Galleries^® stores:
  • Decreased 7.2% in the fiscal 2022 second quarter compared with the unusually strong fiscal 2021 second quarter (+36% versus the fiscal 2020 second quarter) following COVID-related store closures
  • Compared with the pre-pandemic fiscal 2020 second quarter, written same-store sales increased 26% in the fiscal 2022 second quarter, for a compounded annual growth rate of 12% over the two years, reflecting positive trends across all sales metrics, including traffic, conversion, average ticket and Design sales
• Operating Margin:
  • Non-GAAP⁽¹⁾ operating margin increased to a second-quarter record of 12.5% in the fiscal 2022 second quarter versus 9.4% in the fiscal 2021 second quarter, primarily driven by fixed-cost leverage on higher delivered sales volume
    

Corporate & Other:

• Joybird delivered sales:
  • Increased 37% to a record $40 million in the fiscal 2022 second quarter compared with the same quarter last year which posted a 42% sales increase versus the prior-year period
  • Compared with the pre-pandemic fiscal 2020 second quarter, delivered sales increased an impressive 93%, representing a compounded annual growth rate of 39%
• Joybird written sales:
  • Increased 56% in the fiscal 2022 second quarter compared with the prior-year quarter
  • Compared with the pre-pandemic fiscal 2020 second quarter, written sales increased an inspiring 95%, representing a compounded annual growth rate of 40%, reflecting continued robust order trends and the strength of the brand in the online marketplace
• Joybird again turned in a profitable quarter. With investment in increased marketing to drive awareness and customer acquisition, Joybird continues to drive higher web and brick and mortar store traffic, translating to improved written sales, conversion and average ticket
  

Balance Sheet and Cash Flow

Fiscal 2022 year to date, the company generated $15 million in cash from operating activities, after investing $59 million in higher inventory levels to protect against supply chain disruptions and to support increased production and delivered sales.

Over the first half of fiscal 2022, the company continued to make disciplined investments in the business, including $33 million in capital expenditures to increase capacity, remodel stores, open new stores, and upgrade infrastructure. In addition, the company has continued to return capital to shareholders, including $13 million in dividends, with $6.6 million paid in the second quarter, as well as $51 million in share repurchases, or approximately 1.4 million shares of stock, leaving approximately 8.6 million shares available for repurchase under its authorized share repurchase program as of October 23, 2021.

La-Z-Boy ended the period with $297 million in cash⁽²⁾ compared with $353 million in cash⁽²⁾ at the end of the fiscal 2021 second quarter. The company holds $31 million in investments to enhance returns on cash versus $27 million at the end of the fiscal 2021 second quarter.

Dividend

On November 16, 2021, the Board of Directors declared a quarterly cash dividend of $0.165 per share on the common stock of the company, an increase of 10% over the prior quarter. The dividend will be paid on December 15, 2021, to shareholders of record on December 2, 2021.

Outlook

Bob Lucian, Chief Financial Officer of La-Z-Boy Incorporated, said, "Demand trends remain strong, our backlog is high and we expect delivered sales to continue to strengthen, particularly in the fourth quarter as new production cells come online. At the same time, we expect continued supply chain disruptions, including a temporary, but significant, slowdown in our casegoods business due to COVID-related shutdowns in Vietnam. Quarterly trends will also be impacted by our third and fourth quarters containing 12 and 14 production weeks, respectively, compared to 13 production weeks in our second quarter. Taking all of these factors into consideration, we continue to expect sales and margin momentum to accelerate, particularly in the fourth quarter, and we continue to expect to deliver full-year consolidated operating margin at or near double digits."

^_____
(1)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. The company continues to operate a portion of this facility

Non-GAAP amounts for the second quarter of fiscal 2021 exclude:

• purchase accounting charges related to acquisitions completed in prior periods totaling $3.0 million pre-tax, or $0.06 per diluted share, primarily due to a write-up of the Joybird contingent consideration liability based on forecasted future performance, with $2.9 million included in operating income and $0.1 million included in interest expense
• a charge of $0.3 million pre-tax, or $0.01 per diluted share, 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 Wednesday, November 17, 2021, 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 206517.

The call will be webcast live, with corresponding slides, and archived on the Internet. It will be available at https://lazboy.gcs-web.com/. 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: 43533. 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 novel coronavirus (“COVID-19”) 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, such as the continuing and developing impact of, and uncertainty caused by, the COVID-19 pandemic. 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 2021 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 www.sec.gov. 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: https://lazboy.gcs-web.com/financial-information/sec-filings. 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: https://lazboy.gcs-web.com/.

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^®, and Kincaid^®. The company-owned Retail segment includes 159 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 560 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 http://www.la-z-boy.com/.

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, Non-GAAP income before income taxes, Non-GAAP net income attributable to La-Z-Boy Incorporated and Non-GAAP net income attributable to La-Z-Boy Incorporated per diluted share, which may exclude, as applicable, business realignment charges, purchase accounting charges, and charges for our supply chain optimization initiative. 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. The charges for our supply chain optimization initiative may include severance costs, accelerated depreciation expense, costs to relocate equipment and inventory, as well as other costs related to the closure, relocation and sale of certain manufacturing operations. 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, we have not provided a reference to future period GAAP operating margin or a reconciliation of non-GAAP operating margin for future periods in this press release. 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.

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 and the charges related to the company's supply chain optimization initiative 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) 241-2438
kathy.liebmann@la-z-boy.com

 

LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF INCOME

		Quarter Ended								Six Months Ended
(Unaudited, amounts in thousands, except per share data)		10/23/2021				10/24/2020				10/23/2021				10/24/2020
Sales		$	575,889			$	459,120			$	1,100,672			$	744,578
Cost of sales		352,594				258,565				675,295				427,660
Gross profit		223,295				200,555				425,377				316,918
Selling, general and administrative expense		169,182				152,616				336,893				264,654
Operating income		54,113				47,939				88,484				52,264
Interest expense		(242		)		(346		)		(553		)		(805		)
Interest income		106				123				223				617
Other income (expense), net		1,031				(11		)		938				1,463
Income before income taxes		55,008				47,705				89,092				53,539
Income tax expense		14,650				12,401				23,468				13,556
Net income		40,358				35,304				65,624				39,983
Net (income) loss attributable to noncontrolling interests		(842		)		(369		)		(1,542		)		(250		)
Net income attributable to La-Z-Boy Incorporated		$	39,516			$	34,935			$	64,082			$	39,733
Basic weighted average common shares		44,251				46,023				44,662				45,966
Basic net income attributable to La-Z-Boy Incorporated per share		$	0.89			$	0.76			$	1.43			$	0.86
Diluted weighted average common shares		44,423				46,323				44,915				46,167
Diluted net income attributable to La-Z-Boy Incorporated per share		$	0.89			$	0.75			$	1.43			$	0.86

LA-Z-BOY INCORPORATED
CONSOLIDATED BALANCE SHEET

(Unaudited, amounts in thousands, except par value)		10/23/2021				4/24/2021
Current assets
Cash and equivalents		$	293,341			$	391,213
Restricted cash		3,266				3,490
Receivables, net of allowance of $3,016 at 10/23/2021 and $4,011 at 4/24/2021		173,998				139,341
Inventories, net		285,770				226,137
Other current assets		208,793				165,979
Total current assets		965,168				926,160
Property, plant and equipment, net		237,518				219,194
Goodwill		180,108				175,814
Other intangible assets, net		30,738				30,431
Deferred income taxes – long-term		11,727				11,915
Right of use lease assets		341,363				343,800
Other long-term assets, net		85,472				79,008
Total assets		$	1,852,094			$	1,786,322
Current liabilities
Accounts payable		$	119,971			$	94,152
Lease liabilities, current		67,859				67,614
Accrued expenses and other current liabilities		492,710				449,904
Total current liabilities		680,540				611,670
Lease liabilities, long-term		294,252				295,023
Other long-term liabilities		91,620				97,483
Shareholders' equity
Preferred shares – 5,000 authorized; none issued		—				—
Common shares, $1.00 par value – 150,000 authorized; 44,200 outstanding at 10/23/21 and 45,361 outstanding at 4/24/21		44,200				45,361
Capital in excess of par value		336,920				330,648
Retained earnings		398,335				399,010
Accumulated other comprehensive loss		(2,153		)		(1,521		)
Total La-Z-Boy Incorporated shareholders' equity		777,302				773,498
Noncontrolling interests		8,380				8,648
Total equity		785,682				782,146
Total liabilities and equity		$	1,852,094			$	1,786,322

LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF CASH FLOWS

		Six Months Ended
(Unaudited, amounts in thousands)		10/23/2021				10/24/2020
Cash flows from operating activities
Net income		$	65,624			$	39,983
Adjustments to reconcile net income to cash provided by operating activities
(Gain)/loss on disposal of assets		(3,151		)		140
Gain on sale of investments		(218		)		(284		)
Provision for doubtful accounts		(944		)		(1,568		)
Depreciation and amortization		17,785				16,351
Amortization of right-of-use lease assets		34,368				35,137
Equity-based compensation expense		6,354				6,167
Change in deferred taxes		170				1,849
Change in receivables		(33,937		)		(28,949		)
Change in inventories		(59,336		)		(3,511		)
Change in other assets		(20,666		)		(1,926		)
Change in payables		22,683				33,236
Change in lease liabilities		(34,598		)		(32,422		)
Change in other liabilities		21,300				131,507
Net cash provided by operating activities		15,434				195,710
Cash flows from investing activities
Proceeds from disposals of assets		3,998				21
Capital expenditures		(33,314		)		(15,442		)
Purchases of investments		(21,426		)		(17,649		)
Proceeds from sales of investments		22,666				19,470
Acquisitions		(4,396		)		(2,000		)
Net cash used for investing activities		(32,472		)		(15,600		)
Cash flows from financing activities
Payments on debt and finance lease liabilities		(60		)		(75,013		)
Holdback payments for acquisition purchases		(13,500		)		(5,783		)
Stock issued for stock and employee benefit plans, net of shares withheld for taxes		(1,870		)		364
Repurchases of common stock		(50,640		)		—
Dividends paid to shareholders		(13,398		)		(3,216		)
Dividends paid to minority interest joint venture partners (1)		(1,260		)		(8,507		)
Net cash used for financing activities		(80,728		)		(92,155		)
Effect of exchange rate changes on cash and equivalents		(330		)		1,944
Change in cash, cash equivalents and restricted cash		(98,096		)		89,899
Cash, cash equivalents and restricted cash at beginning of period		394,703				263,528
Cash, cash equivalents and restricted cash at end of period		$	296,607			$	353,427
Supplemental disclosure of non-cash investing activities
Capital expenditures included in payables		$	7,900			$	3,769

(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.

LA-Z-BOY INCORPORATED
SEGMENT INFORMATION

		Quarter Ended								Six Months Ended
(Unaudited, amounts in thousands)		10/23/2021				10/24/2020				10/23/2021				10/24/2020
Sales
Wholesale segment:
Sales to external customers		$	341,823			$	266,189			$	645,440			$	445,944
Intersegment sales		97,269				76,827				187,151				120,645
Wholesale segment sales		439,092				343,016				832,591				566,589
Retail segment sales		192,420				162,275				374,267				253,412
Corporate and Other:
Sales to external customers		41,646				30,656				80,965				45,222
Intersegment sales		3,367				3,061				7,682				5,236
Corporate and Other sales		45,013				33,717				88,647				50,458
Eliminations		(100,636		)		(79,888		)		(194,833		)		(125,881		)
Consolidated sales		$	575,889			$	459,120			$	1,100,672			$	744,578
Operating Income (Loss)
Wholesale segment		$	43,128			$	41,683			$	61,459			$	59,623
Retail segment		23,962				15,093				44,400				8,466
Corporate and Other		(12,977		)		(8,837		)		(17,375		)		(15,825		)
Consolidated operating income		$	54,113			$	47,939			$	88,484			$	52,264

LA-Z-BOY INCORPORATED
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

		Quarter Ended								Six Months Ended
(Amounts in thousands, except per share data)		10/23/2021				10/24/2020				10/23/2021				10/24/2020
GAAP gross profit		$	223,295			$	200,555			$	425,377			$	316,918
Add back: Purchase accounting charges - incremental expense upon the sale of inventory acquired at fair value		—				133				—				430
Add back: Business realignment charges		—				235				—				1,305
Add back: Supply chain optimization initiative charges/(gain)		—				—				—				(50		)
Non-GAAP gross profit		$	223,295			$	200,923			$	425,377			$	318,603
GAAP SG&A		$	169,182			$	152,616			$	336,893			$	264,654
Less: Purchase accounting charges - adjustment to fair value of contingent consideration and amortization of intangible assets and retention agreements		(759		)		(2,756		)		(1,019		)		(3,478		)
Less: Business realignment gain/(charges)		3,277				(108		)		3,277				(2,580		)
Non-GAAP SG&A		$	171,700			$	149,752			$	339,151			$	258,596
GAAP operating income		$	54,113			$	47,939			$	88,484			$	52,264
Add back: Purchase accounting charges		759				2,889				1,019				3,908
Add back: Business realignment charges/(gain)		(3,277		)		343				(3,277		)		3,885
Add back: Supply chain optimization initiative charges/(gain)		—				—				—				(50		)
Non-GAAP operating income		$	51,595			$	51,171			$	86,226			$	60,007
GAAP income before income taxes		$	55,008			$	47,705			$	89,092			$	53,539
Add back: Purchase accounting charges recorded as part of gross profit, SG&A, and interest expense		896				3,018				1,336				4,207
Add back: Business realignment charges/(gain)		(3,277		)		343				(3,277		)		3,885
Add back: Supply chain optimization initiative charges/(gain)		—				—				—				(50		)
Non-GAAP income before income taxes		$	52,627			$	51,066			$	87,151			$	61,581
GAAP net income attributable to La-Z-Boy Incorporated		$	39,516			$	34,935			$	64,082			$	39,733
Add back: Purchase accounting charges recorded as part of gross profit, SG&A, and interest expense		896				3,018				1,336				4,207
Less: Tax effect of purchase accounting		(105		)		(128		)		(219		)		(413		)
Add back: Business realignment charges/(gain)		(3,277		)		343				(3,277		)		3,885
Less: Tax effect of business realignment charges		865				(85		)		859				(940		)
Add back: Supply chain optimization initiative charges/(gain)		—				—				—				(50		)
Less: Tax effect of supply chain optimization initiative		—				—				—				12
Non-GAAP net income attributable to La-Z-Boy Incorporated		$	37,896			$	38,083			$	62,781			$	46,434
GAAP net income attributable to La-Z-Boy Incorporated per diluted share		$	0.89			$	0.75			$	1.43			$	0.86
Add back: Purchase accounting charges, net of tax, per share		0.02				0.06				0.03				0.08
Add back: Business realignment charges (gain), net of tax, per share		(0.06		)		0.01				(0.06		)		0.07
Non-GAAP net income attributable to La-Z-Boy Incorporated per diluted share		$	0.85			$	0.82			$	1.40			$	1.01

LA-Z-BOY INCORPORATED
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
SEGMENT INFORMATION

		Quarter Ended														Six Months Ended
(Amounts in thousands)		10/23/2021				% of sales			10/24/2020				% of sales			10/23/2021				% of sales			10/24/2020				% of sales
GAAP operating income (loss)
Wholesale segment		$	43,128			9.8	%		$	41,683			12.2	%		$	61,459			7.4	%		$	59,623			10.5	%
Retail segment		23,962				12.5	%		15,093				9.3	%		44,400				11.9	%		8,466				3.3	%
Corporate and Other		(12,977		)		N/M			(8,837		)		N/M			(17,375		)		N/M			(15,825		)		N/M
Consolidated GAAP operating income		$	54,113			9.4	%		$	47,939			10.4	%		$	88,484			8.0	%		$	52,264			7.0	%
Non-GAAP items affecting operating income
Wholesale segment		$	(3,217	)					$	226						$	(3,157	)					$	3,230
Retail segment		—							148							—							613
Corporate and Other		699							2,858							899							3,900
Consolidated Non-GAAP items affecting operating income		$	(2,518	)					$	3,232						$	(2,258	)					$	7,743
Non-GAAP operating income (loss)
Wholesale segment		$	39,911			9.1	%		$	41,909			12.2	%		$	58,302			7	%		$	62,853			11.1	%
Retail segment		23,962				12.5	%		15,241				9.4	%		44,400				11.9	%		9,079				3.6	%
Corporate and Other		(12,278		)		N/M			(5,979		)		N/M			(16,476		)		N/M			(11,925		)		N/M
Consolidated Non-GAAP operating income		$	51,595			9.0	%		$	51,171			11.1	%		$	86,226			7.8	%		$	60,007			8.1	%
N/M - Not Meaningful

 

FAQ

What were La-Z-Boy's earnings results for Q2 FY2022?

La-Z-Boy reported a GAAP EPS of $0.89 and non-GAAP EPS of $0.85 for Q2 FY2022.

How did La-Z-Boy's sales perform in the latest quarter?

Sales increased by 25% to $576 million in Q2 FY2022 compared to the same quarter last year.

What is the new dividend announced by La-Z-Boy?

La-Z-Boy announced a quarterly dividend of $0.165 per share, a 10% increase over the prior quarter.

What challenges did La-Z-Boy face in Q2 FY2022?

La-Z-Boy faced supply chain disruptions and increased raw material costs affecting its operating margin.

What is La-Z-Boy's outlook for the future?

La-Z-Boy expects sales and margin momentum to accelerate, particularly in the fourth quarter.