La-Z-Boy (NYSE: LZB) swings to Q1 loss as retail grows, wholesale weakens
Rhea-AI Filing Summary
La-Z-Boy Inc. (LZB) reported a weak first quarter of fiscal 2027, with sales of $475.7 million, down 3.4% from $492.2 million, and a swing to an operating loss of $2.1 million versus $22.0 million of operating income a year earlier. Net income attributable to La-Z-Boy shifted from $18.2 million profit to a $2.3 million loss, or from $0.44 EPS to $(0.06), driven largely by supply chain optimization charges and a retirement-plan settlement.
Retail segment performance was a relative bright spot: Retail sales rose 10.3% to $228.6 million and operating income increased 11.3% to $14.6 million, maintaining a 6.4% margin. Wholesale sales fell 8.5% and operating margin dropped from 7.1% to 2.1%, pressured by lower volume, targeted promotions, divestiture-related items, and Mexico plant closure costs. Joybird revenue declined and remained loss-making. Despite earnings pressure, La-Z-Boy ended the quarter with $267.3 million in cash, minimal investments-related debt, a $200 million undrawn credit facility, and continued capital deployment via $25.1 million of share repurchases and $9.7 million in dividends.
Positive
- Retail segment growth and profitability: Retail sales increased 10.3% to $228.6 million and operating income rose 11.3% to $14.6 million, with operating margin improving to 6.4%, supported by acquisitions, new stores, and better product mix.
- Solid liquidity and unused credit capacity: Cash and equivalents totaled $267.3 million with $5.4 million in return-enhancing investments and no borrowings under a $200 million revolving credit facility, providing ample financial flexibility.
- Improved gross margin despite lower sales: Consolidated gross margin increased 140 basis points year over year, helped by a higher Retail mix and favorable tariff impacts, partially offset by supply chain optimization charges.
Negative
- Shift to quarterly net loss: Net income attributable to La-Z-Boy declined from $18.2 million to a $2.3 million loss, with EPS falling from $0.44 to $(0.06), reflecting restructuring and non-operating charges.
- Wholesale segment contraction: Wholesale total sales decreased 8.5% to $322.9 million and operating income dropped 73.3% to $6.7 million, with operating margin compressing from 7.1% to 2.1% amid volume declines and optimization costs.
- Joybird weakness and higher Corporate losses: Corporate and Other operating loss widened 43.6% to $23.4 million, driven by $5.0 million of Tijuana supply chain charges and Joybird’s lower volume and unfavorable gross margins.
- Non-operating retirement-plan hit: Other income (expense), net worsened to a $4.3 million expense from $0.6 million, mainly from a $4.1 million loss tied to terminating a non-qualified legacy retirement plan.
Filing Explained
La-Z-Boy completed a $17.2 million retail acquisition, while Joybird’s Mexico manufacturing transfer remains planned through fiscal 2027.
Form 10-Q is an unaudited quarterly report; this filing covers the first quarter of fiscal 2027 ended
The SLRC closure generated
On
The current stock-repurchase program authorizes up to
Key Figures
Consolidated Sales: $475,689,000
Net Income (Loss) Attributable to La-Z-Boy: $(2,292,000)
Retail Segment Sales: $228,555,000
+5 more
8 metrics
Consolidated Sales
$475,689,000
Quarter ended July 25, 2026; down 3.4% from $492,229,000 a year earlier
Net Income (Loss) Attributable to La-Z-Boy
$(2,292,000)
Quarter ended July 25, 2026; versus $18,204,000 profit in prior-year quarter
Retail Segment Sales
$228,555,000
Quarter ended July 25, 2026; up 10.3% from $207,150,000
Wholesale Operating Margin
2.1%
Quarter ended July 25, 2026; down from 7.1% in prior-year quarter
Cash and Equivalents
$267,254,000
Balance sheet as of July 25, 2026
Share Repurchases Q1 FY27
$25,144,000
Cash used to repurchase approximately 0.7 million shares in the quarter
Capital Expenditures
$23,284,000
Quarter ended July 25, 2026; versus $18,461,000 in prior-year quarter
Contract Liabilities
$135,340,000
Customer deposits and deferred revenue as of July 25, 2026
Key Terms
Supply Chain Optimization, indefinite-lived intangible assets, contract liabilities, operating margin, +2 more
6 terms
Supply Chain Optimization financial
"During the first quarter of fiscal 2027, we announced the planned closure of our leased upholstery assembly plant"
Supply chain optimization is the process of improving how goods and materials move from suppliers through production to customers by reducing delays, cutting unnecessary costs, and increasing reliability and flexibility. Like tuning an engine to get more miles per gallon, optimization can raise profit margins, lower inventory and delivery risks, and make a company more competitive and resilient—factors that directly influence revenue, cash flow, and valuation for investors.
indefinite-lived intangible assets financial
"we recorded an indefinite-lived intangible asset of $4.8 million related to the reacquired rights"
Indefinite-lived intangible assets are non-physical items such as brand names, trademarks, or perpetual rights that a company expects to keep indefinitely and therefore does not amortize over time. They matter to investors because their value stays on the balance sheet until shown to be impaired, so sudden write-downs can sharply reduce reported earnings and book value; think of them like a family recipe that retains value until someone proves it no longer sells.
contract liabilities financial
"customer deposits and deferred revenue (collectively, the "contract liabilities") are reported in accrued expenses"
Contract liabilities are amounts a company has been paid in advance for goods or services it still owes to customers — think of them like gift cards or prepaid subscriptions the company must fulfill later. For investors, they show promised future work or deliveries that will turn into revenue over time, reveal cash already collected, and help assess whether a firm has a backlog of obligations that could affect future earnings and cash flow.
operating margin financial
"Operating margin, which is calculated as operating income as a percentage of sales, decreased 490 basis points"
Operating margin shows how much profit a company makes from its core business activities after paying for costs like wages and materials. It’s useful because it tells you how efficiently a company is running—higher margins mean it keeps more money from each dollar of sales, which can indicate better management or stronger products.
held-to-maturity investments financial
"Held-to-maturity investments | 5,391 | 5,510 Total short-term investments"
Level 2 financial
"Level 2 — Financial assets and liabilities, the values of which are based on quoted prices"
Level 2 is a real-time view of a stock’s trading interest that shows individual buy and sell orders, including the prices and sizes offered by market makers and trading venues. For investors it reveals market depth and liquidity—like seeing the full line at a ticket window rather than just the last sale—helping assess how easily a position can be bought or sold and how near-term prices might move.
Earnings Snapshot
Sales: $475,689,000
Quarter ended July 25, 2026
Sales
$475,689,000
-3.4% year over year
Operating Income (Loss)
$(2,104,000)
down from $21,987,000 profit
Net Income (Loss) Attributable to La-Z-Boy
$(2,292,000)
down from $18,204,000 profit
Retail Segment Sales
$228,555,000
+10.3% year over year
FAQ
How did La-Z-Boy (LZB) perform financially in Q1 fiscal 2027 versus last year?
La-Z-Boy reported Q1 FY27 sales of $475.7 million, down 3.4% from $492.2 million, and swung to an operating loss of $2.1 million from $22.0 million of operating income. Net income attributable to La-Z-Boy moved from $18.2 million profit to a $2.3 million loss.
What drove the decline in profitability for La-Z-Boy (LZB) in Q1 fiscal 2027?
Profitability declined mainly due to supply chain optimization charges tied to Mexico plant closures and a $4.1 million loss from terminating a legacy retirement plan. These factors offset higher gross margin and led to a $(0.06) EPS loss versus $0.44 a year ago.
How did La-Z-Boy’s Retail segment perform in Q1 fiscal 2027?
The Retail segment delivered sales of $228.6 million, up 10.3%, and operating income of $14.6 million, up 11.3%, for a 6.4% operating margin. Growth came from recent acquisitions, new stores, and improved mix, while written same-store sales increased 3%.
What is the financial condition and liquidity position of La-Z-Boy (LZB)?
La-Z-Boy held $267.3 million in cash and equivalents and $5.4 million in return-enhancing investments at quarter-end, with no borrowings under a $200 million unsecured revolving credit facility. Management expects these resources to cover operational and growth needs over the next 12 months.
What restructuring or optimization actions did La-Z-Boy undertake in Q1 fiscal 2027?
La-Z-Boy initiated supply chain optimization, closing its SLRC upholstery assembly plant and planning to close the Joybird Tijuana plant. These actions generated $9.3 million SG&A and $3.0 million cost-of-sales charges for SLRC and $5.0 million in Corporate cost-of-sales charges.
How did Joybird perform within La-Z-Boy’s Corporate and Other segment?
Corporate and Other sales declined to $30.0 million, with Joybird sales at $26.5 million on lower delivered volume and weaker margins. Written Joybird sales fell 17% year over year, contributing to a larger $23.4 million operating loss for the segment.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
For the quarterly period ended July 25, 2026
or
For the transition period from ______ to ______
COMMISSION FILE NUMBER 1-9656
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||||||||
Registrant's telephone number, including area code (734 ) 242-1444
None
(Former name, former address and former fiscal year, if changed since last report.)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | |||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
| Class | Outstanding at August 11, 2026 | |||||||
| Common Stock, $1.00 Par Value | ||||||||
Table of Contents
LA-Z-BOY INCORPORATED
FORM 10-Q FIRST QUARTER OF FISCAL 2027
TABLE OF CONTENTS
| Page Number | ||||||||
PART I Financial Information (Unaudited) | 3 | |||||||
Item 1. | Financial Statements | 3 | ||||||
Consolidated Statement of Income | 3 | |||||||
Consolidated Statement of Comprehensive Income | 4 | |||||||
Consolidated Balance Sheet | 5 | |||||||
Consolidated Statement of Cash Flows | 6 | |||||||
Consolidated Statement of Changes in Equity | 7 | |||||||
Notes to Consolidated Financial Statements | 8 | |||||||
Note 1. Basis of Presentation | 8 | |||||||
Note 2. Acquisitions | 8 | |||||||
Note 3. Inventories | 9 | |||||||
Note 4. Assets Held for Sale | 9 | |||||||
Note 5. Goodwill and Other Intangible Assets | 10 | |||||||
Note 6. Investments | 11 | |||||||
Note 7. Product Warranties | 11 | |||||||
Note 8. Stock-Based Compensation | 12 | |||||||
Note 9. Accumulated Other Comprehensive Loss | 13 | |||||||
Note 10. Revenue Recognition | 14 | |||||||
Note 11. Segment Information | 15 | |||||||
Note 12. Income Taxes | 17 | |||||||
Note 13. Earnings per Share | 18 | |||||||
Note 14. Fair Value Measurements | 18 | |||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 20 | ||||||
Cautionary Note Regarding Forward-Looking Statements | 20 | |||||||
Introduction | 20 | |||||||
Results of Operations | 23 | |||||||
Liquidity and Capital Resources | 26 | |||||||
Critical Accounting Policies | 28 | |||||||
Recent Accounting Pronouncements | 28 | |||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 29 | ||||||
Item 4. | Controls and Procedures | 29 | ||||||
PART II Other Information | 30 | |||||||
Item 1A. | Risk Factors | 30 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 30 | ||||||
Item 5. | Other Information | 30 | ||||||
Item 6. | Exhibits | 31 | ||||||
Signature Page | 32 | |||||||
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PART I - FINANCIAL INFORMATION (UNAUDITED)
ITEM 1. FINANCIAL STATEMENTS
LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF INCOME
| Quarter Ended | ||||||||||||||
| (Unaudited, amounts in thousands, except per share data) | 7/25/2026 | 7/26/2025 | ||||||||||||
| Sales | $ | $ | ||||||||||||
| Cost of sales | ||||||||||||||
| Gross profit | ||||||||||||||
| Selling, general and administrative expense | ||||||||||||||
| Operating income (loss) | ( | |||||||||||||
| Interest expense | ( | ( | ||||||||||||
| Interest income | ||||||||||||||
| Other income (expense), net | ( | ( | ||||||||||||
| Income (loss) before income taxes | ( | |||||||||||||
| Income tax expense (benefit) | ( | |||||||||||||
| Net income (loss) | ( | |||||||||||||
| Net income attributable to noncontrolling interests | ( | ( | ||||||||||||
| Net income (loss) attributable to La-Z-Boy Incorporated | $ | ( | $ | |||||||||||
| Basic weighted average common shares | ||||||||||||||
| Basic net income (loss) attributable to La-Z-Boy Incorporated per share | $ | ( | $ | |||||||||||
| Diluted weighted average common shares | ||||||||||||||
| Diluted net income (loss) attributable to La-Z-Boy Incorporated per share | $ | ( | $ | |||||||||||
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| Quarter Ended | ||||||||||||||
| (Unaudited, amounts in thousands) | 7/25/2026 | 7/26/2025 | ||||||||||||
| Net income (loss) | $ | ( | $ | |||||||||||
| Other comprehensive income | ||||||||||||||
| Currency translation adjustment | ( | |||||||||||||
| Net unrealized gain (loss) on marketable securities, net of tax | ( | |||||||||||||
| Net pension amortization and actuarial gain, net of tax | ||||||||||||||
| Total other comprehensive income | ||||||||||||||
| Total comprehensive income before noncontrolling interests | ( | |||||||||||||
| Comprehensive (income) attributable to noncontrolling interests | ( | |||||||||||||
| Comprehensive income attributable to La-Z-Boy Incorporated | $ | ( | $ | |||||||||||
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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LA-Z-BOY INCORPORATED
CONSOLIDATED BALANCE SHEET
| (Unaudited, amounts in thousands, except par value) | 7/25/2026 | 4/25/2026 | ||||||||||||
| Current assets | ||||||||||||||
| Cash and equivalents | $ | $ | ||||||||||||
Receivables, net of allowance of $ | ||||||||||||||
| Inventories, net | ||||||||||||||
| Assets held for sale | ||||||||||||||
| Other current assets | ||||||||||||||
| Total current assets | ||||||||||||||
| Property, plant and equipment, net | ||||||||||||||
| Goodwill | ||||||||||||||
| Other intangible assets, net | ||||||||||||||
| Right of use lease assets | ||||||||||||||
| Other long-term assets, net | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| Current liabilities | ||||||||||||||
| Accounts payable | $ | $ | ||||||||||||
| Lease liabilities, short-term | ||||||||||||||
| Accrued expenses and other current liabilities | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Lease liabilities, long-term | ||||||||||||||
| Other long-term liabilities | ||||||||||||||
| Shareholders' equity | ||||||||||||||
Preferred shares – | ||||||||||||||
Common shares, $ | ||||||||||||||
| Capital in excess of par value | ||||||||||||||
| Retained earnings | ||||||||||||||
| Accumulated other comprehensive loss | ( | ( | ||||||||||||
| Total La-Z-Boy Incorporated shareholders' equity | ||||||||||||||
| Noncontrolling interests | ||||||||||||||
| Total equity | ||||||||||||||
| Total liabilities and equity | $ | $ | ||||||||||||
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF CASH FLOWS
| Quarter Ended | ||||||||||||||
| (Unaudited, amounts in thousands) | 7/25/2026 | 7/26/2025 | ||||||||||||
| Cash flows from operating activities | ||||||||||||||
| Net income (loss) | $ | ( | $ | |||||||||||
| Adjustments to reconcile net income to cash provided by operating activities | ||||||||||||||
| (Gain) loss on disposal and impairment of assets | ( | |||||||||||||
| (Gain) loss on sale of investments | ( | ( | ||||||||||||
| Provision for doubtful accounts | ||||||||||||||
| Depreciation and amortization | ||||||||||||||
| Amortization of right-of-use lease assets | ||||||||||||||
| Lease impairment | ||||||||||||||
| Equity-based compensation expense | ||||||||||||||
| Change in deferred taxes | ||||||||||||||
| Change in receivables | ||||||||||||||
| Change in inventories | ( | |||||||||||||
| Change in other assets | ( | ( | ||||||||||||
| Change in payables | ||||||||||||||
| Change in lease liabilities | ( | ( | ||||||||||||
| Change in other liabilities | ( | ( | ||||||||||||
| Net cash provided by operating activities | ||||||||||||||
| Cash flows from investing activities | ||||||||||||||
| Proceeds from disposals of assets | ||||||||||||||
| Capital expenditures | ( | ( | ||||||||||||
| Purchases of investments | ( | ( | ||||||||||||
| Proceeds from sales of investments | ||||||||||||||
| Acquisitions | ( | ( | ||||||||||||
| Net cash used for investing activities | ( | ( | ||||||||||||
| Cash flows from financing activities | ||||||||||||||
| Payments on finance lease liabilities | ( | ( | ||||||||||||
| Payments for debt issuance costs | ( | |||||||||||||
| Stock issued for stock and employee benefit plans, net of shares withheld for taxes | ( | ( | ||||||||||||
| Repurchases of common stock | ( | ( | ||||||||||||
| Dividends paid to shareholders | ( | ( | ||||||||||||
| Net cash used for financing activities | ( | ( | ||||||||||||
| Effect of exchange rate changes on cash and equivalents | ( | |||||||||||||
| Change in cash and cash equivalents | ( | ( | ||||||||||||
| Cash and cash equivalents at beginning of period | ||||||||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||||||||
| Supplemental disclosure of non-cash investing activities | ||||||||||||||
| Capital expenditures included in payables | $ | $ | ||||||||||||
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| (Unaudited, amounts in thousands, except per share data) | Common Shares | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non-Controlling Interests | Total | ||||||||||||||||||||||||||||||||
| At April 25, 2026 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||
| Net income (loss) | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Stock issued for stock and employee benefit plans, net of cancellations and withholding tax | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Repurchases of | ( | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||||
| Stock option and restricted stock expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
Dividends declared and paid ($ | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
Dividends declared not paid ($ | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
| At July 25, 2026 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||
| (Unaudited, amounts in thousands, except per share data) | Common Shares | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non-Controlling Interests | Total | ||||||||||||||||||||||||||||||||
| At April 26, 2025 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||
| Net income | — | — | — | |||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | |||||||||||||||||||||||||||||||||||
| Stock issued for stock and employee benefit plans, net of cancellations and withholding tax | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Repurchases of | ( | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||||
| Stock option and restricted stock expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
Dividends declared and paid ($ | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
Dividends declared not paid ($ | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
| At July 26, 2025 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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LA-Z-BOY INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 1: Basis of Presentation
The accompanying consolidated financial statements include the consolidated accounts of La-Z-Boy Incorporated and our majority-owned subsidiaries (collectively, the "Company"). We derived the April 25, 2026 balance sheet from our audited financial statements. We prepared the interim financial information in conformity with generally accepted accounting principles ("US GAAP"), which we applied on a basis consistent with those reflected in our fiscal 2026 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”), but the information does not include all of the disclosures required by US GAAP. In management’s opinion, the interim financial information includes all adjustments and accruals, consisting only of normal recurring adjustments (except as otherwise disclosed), that are necessary for a fair statement of results for the respective interim periods. The interim results reflected in the accompanying financial statements are not necessarily indicative of the results of operations that will occur for the full fiscal year ending April 24, 2027.
Accounting Pronouncements Adopted in Fiscal 2027
The following table summarizes Accounting Standards Updates ("ASUs"), which were adopted in fiscal 2027, but did not have a material impact on our accounting policies or our consolidated financial statements and related disclosures.
| ASU | Description | Adoption Date | ||||||||||||
| ASU 2025-05 | Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets | Fiscal 2027 | ||||||||||||
| ASU 2024-04 | Debt - Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments | Fiscal 2027 | ||||||||||||
Accounting Pronouncements not yet Adopted
The following table summarizes additional accounting pronouncements which we have not yet adopted, but we believe will not have a material impact on our accounting policies or our consolidated financial statements and related disclosures.
| ASU | Description | Adoption Date | ||||||||||||
| ASU 2026-02 | Environmental Credits and Environmental Credit Obligations (Topic 818) | Fiscal 2029 | ||||||||||||
| ASU 2025-06 | Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software | Fiscal 2029 | ||||||||||||
| ASU 2025-03 | Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity | Fiscal 2028 | ||||||||||||
| ASU 2024-03 | Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses | Fiscal 2028 | ||||||||||||
Supply Chain Optimization
During the first quarter of fiscal 2027, we announced the planned closure of our leased upholstery assembly plant in San Luis Rio Colorado ("SLRC"), Mexico with operations ceased at the end of the first quarter of fiscal 2027. As a result of this action, during the first quarter of fiscal 2027, we recorded charges within the Wholesale segment of $9.3 million in SG&A expense for the impairment of various long-lived assets and $3.0 million in cost of sales primarily related to severance expense.
Additionally, during the first quarter of fiscal 2027, we announced the planned closure of our leased Joybird manufacturing plant in Tijuana, Mexico, with all manufacturing operations expected to transfer to our U.S. plants by the end of fiscal 2027. As a result of this action, we recorded charges of $5.0 million in cost of sales within Corporate and Other for severance expense, accelerated depreciation, and accelerated lease expense.
Note 2: Acquisitions
The below acquisition was not significant to our consolidated financial statements, and therefore, pro-forma financial information is not presented. All of our provisional purchase accounting estimates for the acquisition completed in fiscal 2027 are based on the information and data available to us as of the time of the issuance of these financial statements, and in
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accordance with Accounting Standard Codification Topic 805-10-25-15, are subject to change within the first 12 months following the acquisition as we gain additional data.
The following Retail acquisition reflects a core component of our strategic priorities, which is to grow our company-owned retail business and leverage our integrated retail model (where we earn a combined profit on both the wholesale and retail sales) in suitable geographic markets, alongside the existing La-Z-Boy Store network.
Prior to the Retail acquisition described below, we licensed to the counterparty the exclusive right to own and operate La-Z-Boy Stores (and to use the associated trademarks and trade name) in their respective markets, and we reacquired these rights when we consummated the transaction. These reacquired rights are indefinite-lived because our retailer agreements are perpetual agreements that have no specific expiration date and no renewal options. The effective settlement date of these arrangements resulted in no settlement gain or loss as the contractual terms were at market. For federal income tax purposes, we amortize and deduct these indefinite-lived intangible assets and goodwill, if any, over 15 years.
Gulf Coast Region Acquisition
On June 22, 2026, we completed our acquisition of the Pensacola, Florida and Mobile and Spanish Fort, Alabama businesses that operated three independently owned La-Z-Boy Stores for $17.2 million, inclusive of and subject to further customary adjustments. We paid total cash of $15.7 million during the first quarter of fiscal 2027 and the remaining consideration included forgiveness of accounts receivable and payments based on working capital adjustments. As part of the acquisition, we recorded an indefinite-lived intangible asset of $4.8 million related to the reacquired rights described above.
Prior Year Acquisitions
We did not complete any acquisitions during the first quarter of fiscal 2026.
Note 3: Inventories
A summary of inventories is as follows:
| (Unaudited, amounts in thousands) | 7/25/2026 | 4/25/2026 | ||||||||||||
| Raw materials | $ | $ | ||||||||||||
| Work in process | ||||||||||||||
| Finished goods | ||||||||||||||
| FIFO inventories | ||||||||||||||
| Excess of FIFO over LIFO | ( | ( | ||||||||||||
| Total inventories | $ | $ | ||||||||||||
Note 4: Assets Held for Sale
Assets and liabilities are classified as held for sale when management commits to a plan to sell a disposal group and concludes that it meets all other relevant criteria in accordance with U.S. GAAP. Assets held for sale are measured at the lower of their carrying value or fair value less costs to sell and are no longer depreciated or amortized. Any loss resulting from the measurement is recognized in the period the held for sale criteria are met while gains are not recognized until the date of sale.
As of July 25, 2026, we had no assets that met the criteria to be classified as held for sale. As of April 25, 2026, the following assets and liabilities met the criteria to be classified as held for sale in connection with our plan to divest a portion of our Casegoods wholesale business:
| (Amounts in thousands) | 4/25/2026 | |||||||
| Accounts receivable, net | $ | |||||||
| Inventory | ||||||||
| Intangible asset | ||||||||
| Total assets held for sale | $ | |||||||
Other liabilities (1) | $ | |||||||
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Note 5: Goodwill and Other Intangible Assets
We have goodwill on our consolidated balance sheet as follows:
| Reportable Segment/Unit | Reporting Unit | Related Acquisition | ||||||||||||
| Retail Segment | Retail | Independent La-Z-Boy Stores | ||||||||||||
| Corporate and Other | Joybird | Joybird | ||||||||||||
The following table summarizes changes in the carrying amount of our goodwill by reportable segment:
| (Unaudited, amounts in thousands) | Wholesale Segment | Retail Segment | Corporate and Other | Total Goodwill | ||||||||||||||||||||||
Balance at April 25, 2026 (1) | $ | $ | $ | $ | ||||||||||||||||||||||
| Translation adjustment | ( | ( | ||||||||||||||||||||||||
Balance at July 25, 2026 (1) | $ | $ | $ | $ | ||||||||||||||||||||||
We have intangible assets on our consolidated balance sheet as follows:
| Reportable Segment | Intangible Asset | Useful Life | ||||||||||||
| Retail Segment | Reacquired rights to own and operate La-Z-Boy Stores | Indefinite-lived | ||||||||||||
| Corporate and Other | Joybird® trade name (1) | Amortizable over -year useful life | ||||||||||||
(1)Fully amortized as of July 25, 2026.
The following summarizes changes in our intangible assets:
| (Unaudited, amounts in thousands) | Finite-Lived Trade Name | Indefinite- Lived Reacquired Rights | Total Intangible Assets | |||||||||||||||||
| Balance at April 25, 2026 | $ | $ | $ | |||||||||||||||||
| Acquisitions | ||||||||||||||||||||
| Amortization | ( | ( | ||||||||||||||||||
| Translation adjustment | ( | ( | ||||||||||||||||||
| Balance at July 25, 2026 | $ | $ | $ | |||||||||||||||||
We test indefinite-lived intangibles and goodwill for impairment on an annual basis in the fourth quarter of each fiscal year, and more frequently if events or changes in circumstances indicate that an asset might be impaired. When we perform the quantitative test for goodwill, we establish the fair value for the reporting unit based on the income approach, in which we utilize a discounted cash flow model, the market approach, in which we utilize market multiples of comparable companies, or a combination of both approaches. The income approach requires the use of significant estimates and assumptions including forecasted sales growth, operating income projections, and discount rates and changes in these assumptions may materially impact our fair value assessment.
We test amortizable intangible assets for impairment if events or changes in circumstances indicate that the assets might be impaired.
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Note 6: Investments
We have current and long-term investments primarily intended to enhance returns on our cash. Our short-term investments are included in other current assets and our long-term investments are included in other long-term assets on our consolidated balance sheet.
The following summarizes our investments:
| (Unaudited, amounts in thousands) | 7/25/2026 | 4/25/2026 | ||||||||||||
| Short-term investments: | ||||||||||||||
| Marketable securities | $ | $ | ||||||||||||
| Held-to-maturity investments | ||||||||||||||
| Total short-term investments | ||||||||||||||
| Long-term investments: | ||||||||||||||
Marketable securities (1) | ||||||||||||||
| Total investments | $ | $ | ||||||||||||
| Investments to enhance returns on cash | $ | $ | ||||||||||||
Other (1) | ||||||||||||||
| Total investments | $ | $ | ||||||||||||
(1)Balance as of July 25, 2026 reflects sale of investments to fund lump-sum payments to participants to terminate our non-qualified legacy acquired retirement plan.
The following is a summary of the unrealized gains, unrealized losses, and fair value by investment type:
| 7/25/2026 | 4/25/2026 | |||||||||||||||||||||||||||||||||||||
| (Unaudited, amounts in thousands) | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||||||||||||
| Equity securities | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Fixed income | ( | |||||||||||||||||||||||||||||||||||||
| Other | ( | |||||||||||||||||||||||||||||||||||||
| Total securities | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
The following table summarizes sales of marketable securities:
| Quarter Ended | ||||||||||||||
| (Unaudited, amounts in thousands) | 7/25/2026 | 7/26/2025 | ||||||||||||
Proceeds from sales (1) | $ | $ | ||||||||||||
Gross realized gains (1) | ||||||||||||||
(1)Quarter ended July 25, 2026 includes sale of investments to fund lump-sum payments to participants to terminate our non-qualified legacy acquired retirement plan.
Note 7: Product Warranties
We account for product warranties by accruing an estimated liability when we recognize revenue on the sale of warrantied product. We estimate future warranty claims on product sales based on sales volume and claim experience and periodically make adjustments to reflect changes in actual experience. We incorporate repair costs into our liability estimates, including materials, labor and overhead amounts necessary to perform repairs, and any costs associated with delivering repaired product to our customers and consumers. Approximately 90 % of our warranty liability relates to our Wholesale reportable segment, as we generally warrant our products against defects for to three years on fabric and leather, from to five years on cushions and padding, and provide a limited lifetime warranty on certain mechanisms and frames, unless otherwise noted in the warranty. Additionally, our Wholesale segment warranties cover labor costs relating to our parts for one year . We provide a limited lifetime warranty against defects on a majority of the Joybird products, which are a part of our Corporate and Other
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results. For all our manufacturer warranties, the warranty period begins when the consumer receives our product. We use considerable judgment in making our estimates and record differences between our actual and estimated costs when the differences are known.
A reconciliation of the changes in our product warranty liability is as follows:
| Quarter Ended | ||||||||||||||
| (Unaudited, amounts in thousands) | 7/25/2026 (1) | 7/26/2025 | ||||||||||||
| Balance as of the beginning of the period | $ | $ | ||||||||||||
| Accruals during the period | ||||||||||||||
| Settlements during the period | ( | ( | ||||||||||||
| Balance as of the end of the period | $ | $ | ||||||||||||
(1)$16.7 million and $17.0 million is recorded in accrued expenses and other current liabilities as of July 25, 2026, and April 25, 2026, respectively, while the remainder is included in other long-term liabilities.
We recorded accruals during the periods presented in the table above, primarily to reflect charges that relate to warranties issued during the respective periods.
Note 8: Stock-Based Compensation
The table below summarizes the total stock-based compensation expense we recognized for all outstanding grants in our consolidated statement of income:
| Quarter Ended | ||||||||||||||
| (Unaudited, amounts in thousands) | 7/25/2026 | 7/26/2025 | ||||||||||||
| Equity-based awards expense | $ | $ | ||||||||||||
Liability-based awards expense (1) | ( | |||||||||||||
| Total stock-based compensation expense | $ | $ | ||||||||||||
Restricted Stock Units. During the first quarter of fiscal 2027, we granted 239,234 shares of restricted stock units to employees and we also have restricted stock unit awards outstanding from previous grants. We issue restricted stock units at no cost to the employees and account for restricted stock unit awards as equity-based awards because when they vest, they will be settled in common shares. We recognize compensation expense for restricted stock over the vesting period equal to the fair value on the date our Compensation and Talent Oversight Committee of our board of directors approved the awards. Restricted stock unit awards vest at 25 % per year, beginning one year from the grant date for a term of four years , with continued vesting upon retirement. We accelerate the expense for restricted stock units granted to retirement-eligible employees over the vesting period, with expense recognized from the grant date through their retirement eligibility date or over the ten months following the grant date, whichever period is longer. We have elected to recognize forfeitures as an adjustment to compensation expense in the same period as the forfeitures occur. The weighted average fair value of the restricted stock that was awarded in the first quarter of fiscal 2027 was $39.99 per share, the market value of our common shares on the date of grant.
Performance-Based Units. During the first quarter of fiscal 2027, we granted 168,139 performance-based units, and we also have performance-based unit awards outstanding from previous grants. Payouts of these grants depend on our financial performance (50 %) and a market-based condition based on the total return our shareholders receive on their investment in our stock relative to returns earned through investments in other public companies (50 %). The performance share opportunity ranges from 50 % of the employee’s target award if minimum performance requirements are met to a maximum of 200 % of the target award based on the attainment of certain financial and shareholder-return goals over a specific performance period, which is generally fiscal years.
We account for performance-based units as equity-based awards because when they vest, they will be settled in common shares. In the event of an employee's termination during the vesting period, the potential right to earn shares under this program is generally forfeited and we have elected to recognize forfeitures as an adjustment to compensation expense in the same period in which the forfeitures occur. For units that vest based on our results relative to the performance goals, we expense as compensation cost the fair value of the units as of the day we granted the awards recognized over the performance period, taking into account the probability that we will satisfy the performance goals. The fair value of each unit of the awards we
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granted in fiscal 2027 that vest based on attaining performance goals was $37.09 , the market value of our common shares on the date we granted the awards less the dividends we expect to pay before the shares vest. For units that vest based on market conditions, we use a Monte Carlo valuation model to estimate each share’s fair value as of the date of grant. The Monte Carlo valuation model uses multiple simulations to evaluate our probability of achieving various stock price levels to determine our expected performance ranking relative to our peer group. For units that vest based on market conditions, we expense compensation cost over the vesting period regardless of whether the market condition is ultimately satisfied. Based on the Monte Carlo valuation model, the fair value as of the grant date of the fiscal 2027 grant of units that vest based on market conditions was $56.47 .
Note 9: Accumulated Other Comprehensive Loss
Activity in accumulated other comprehensive income (loss) for the quarters ended July 25, 2026, and July 26, 2025, is as follows:
| (Unaudited, amounts in thousands) | Translation adjustment | Unrealized gain (loss) on marketable securities | Net pension amortization and net actuarial gain (loss) | Accumulated other comprehensive income (loss) | ||||||||||||||||||||||
| Balance at April 25, 2026 | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||
| Changes before reclassifications | ( | ( | ||||||||||||||||||||||||
Amounts reclassified to net income (1) | ( | |||||||||||||||||||||||||
| Tax effect | ||||||||||||||||||||||||||
| Other comprehensive income (loss) attributable to La-Z-Boy Incorporated | ( | ( | ||||||||||||||||||||||||
| Balance at July 25, 2026 | $ | ( | $ | $ | $ | ( | ||||||||||||||||||||
| Balance at April 26, 2025 | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||
| Changes before reclassifications | ||||||||||||||||||||||||||
Amounts reclassified to net income (2) | ( | |||||||||||||||||||||||||
| Tax effect | ( | ( | ( | |||||||||||||||||||||||
| Other comprehensive income (loss) attributable to La-Z-Boy Incorporated | ||||||||||||||||||||||||||
| Balance at July 26, 2025 | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||
(1)Fiscal 2027 includes a $2.3 million charge related to the termination and settlement of our non-qualified legacy acquired retirement plan, of which $2.2 million of expense was recorded in other income (expense), net and $0.1 million of expense was recorded in income tax expense in our consolidated statement of income. Fiscal 2027 also includes $0.4 million of realized gains on the sale of marketable securities, of which $0.1 million of income was recorded in other income (expense), net and $0.3 million of income was recorded in income tax expense in our consolidated statement of income.
(2)We reclassified both the unrealized gain (loss) on marketable securities and the net pension amortization in fiscal 2026 from accumulated other comprehensive loss to net income through other income (expense), net.
The components of noncontrolling interest were as follows:
| Quarter Ended | ||||||||||||||
| (Unaudited, amounts in thousands) | 7/25/2026 | 7/26/2025 | ||||||||||||
| Balance as of the beginning of the period | $ | $ | ||||||||||||
| Net income | ||||||||||||||
| Other comprehensive income | ( | |||||||||||||
| Balance as of the end of the period | $ | $ | ||||||||||||
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Note 10: Revenue Recognition
Our revenue is primarily derived from product sales. We report product sales net of discounts and recognize them when control (rights and obligations associated with the product) passes to the customer. For sales to furniture retailers or distributors, control typically transfers when we ship the product. In cases where we sell directly to the end consumer, control of the product is generally transferred upon delivery.
For shipping and handling activities, we have elected to apply the accounting policy election permitted in ASC 606-10-25-18B, which allows an entity to account for shipping and handling activities as fulfillment activities (rather than as a promised good or service) when the activities are performed even if those activities are performed after the control of the good has been transferred. We expense shipping and handling costs at the time we recognize revenue in accordance with this election.
For sales tax, we have elected to apply the accounting policy election permitted in ASC 606-10-32-2A, which allows an entity to exclude from the measurement of the transaction price all taxes imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer, including sales, use, excise, value-added, and franchise taxes (collectively referred to as sales taxes). This allows us to present revenue net of these certain types of taxes.
We have elected the practical expedient permitted in ASC 606-10-32-18, which allows an entity to recognize the promised amount of consideration without adjusting for the effects of a significant financing component if the contract has a duration of one year or less. As our contracts typically are less than one year in length and do not have significant financing components, we have not adjusted consideration.
The following table presents our revenue disaggregated by product category and by segment or unit:
| Quarter Ended July 25, 2026 | Quarter Ended July 26, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited, amounts in thousands) | Wholesale | Retail | Corporate and Other | Total | Wholesale | Retail | Corporate and Other | Total | ||||||||||||||||||||||||||||||||||||||||||
| Upholstered Furniture | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Casegoods/Accessories | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Delivery | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Eliminations | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Consolidated Net Sales | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
(1)Primarily includes after-treatment product, royalties, parts, surcharges, rebates and other sales incentives.
Upholstered Furniture - Includes revenue for upholstered furniture, such as recliners, sofas, loveseats, chairs, sectionals, modulars, and ottomans. This revenue includes sales to La-Z-Boy Stores (including company-owned stores), operators of La-Z-Boy Comfort Studio® and branded space locations, England Custom Comfort Center locations, other major dealers, independent retailers, and the end consumer. Fiscal 2026 includes the upholstery portion of our Casegoods business that was divested on January 30, 2026.
Casegoods/Accessories - Includes revenue for occasional tables typically found in a living room, dining and bedroom furniture, and other accessories such as lamps, rugs, and other decor found throughout the home. This revenue includes sales to La-Z-Boy Stores (including company-owned stores), independent retailers, and the end consumer. Includes the Casegoods wholesale business that was divested on May 29, 2026.
Contract Assets and Liabilities. We receive customer deposits from end consumers before we recognize revenue and in some cases we have the unconditional right to collect the remaining portion of the order price before we fulfill our performance obligation, resulting in a contract asset and a corresponding deferred revenue liability. In our consolidated balance sheet, customer deposits and deferred revenue (collectively, the "contract liabilities") are reported in accrued expenses and other current liabilities while contract assets are reported as other current assets.
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The following table presents our contract assets and liabilities:
| (Unaudited, amounts in thousands) | 7/25/2026 | 4/25/2026 | ||||||||||||
| Contract assets | $ | $ | ||||||||||||
| Customer deposits | $ | $ | ||||||||||||
| Deferred revenue | ||||||||||||||
Total contract liabilities (1) | $ | $ | ||||||||||||
(1)During the quarter ended July 25, 2026, we recognized revenue of $100.6 million related to our contract liability balance at April 25, 2026.
Note 11: Segment Information
We report segment information consistent with the way our chief operating decision maker, (the "CODM"), our Board Chair, President and Chief Executive Officer, evaluates the operating results and performance of the Company. Our reportable operating segments include the Wholesale segment and the Retail segment.
Wholesale Segment. Our Wholesale segment consists primarily of three operating segments: La-Z-Boy, our largest operating segment, our England subsidiary, and our international operating segment, which includes our international La-Z-Boy wholesale and manufacturing businesses. We aggregate these operating segments into one reportable segment because they are economically similar and meet the other aggregation criteria for determining reportable segments. Our Wholesale segment manufactures and imports upholstered furniture, such as recliners and motion furniture, sofas, loveseats, chairs, sectionals, modulars, ottomans and sleeper sofas and imports casegoods (wood) furniture such as bedroom sets, dining room sets, entertainment centers and occasional pieces. The Wholesale segment sells directly to La-Z-Boy Stores, operators of La-Z-Boy Comfort Studio® and branded space locations, England Custom Comfort Center locations, major dealers, and a wide cross-section of other independent retailers.
Retail Segment. Our Retail segment consists of one operating segment comprised of our 234 company-owned La-Z-Boy Stores. The Retail segment sells primarily upholstered furniture, in addition to some casegoods and other home furnishings accessories, to end consumers through these stores.
Corporate and Other. Corporate and Other includes the shared costs for corporate functions, including human resources, information technology, finance and accounting, and legal, in addition to revenue generated through royalty agreements with companies licensed to use the La-Z-Boy® brand name on various products. We consider our corporate functions to be other business activities and have aggregated them with our other insignificant operating segments, including our global trading company in Hong Kong and Joybird, an omni-channel retailer that manufactures upholstered furniture, such as sofas, loveseats, chairs, ottomans, sleeper sofas and beds, and also imports casegoods (wood) furniture, such as occasional tables and other accessories. Joybird sells to the end consumer online through its website, www.joybird.com, through small-format stores in key markets, and through other distribution channels. None of the operating segments included in Corporate and Other meet the requirements of reportable segments.
We use operating income to evaluate segment performance and to allocate resources. Segment operating income is based on profit or loss from operations before interest expense, interest income, other income (expense), net and income taxes. The CODM assesses performance by regularly reviewing each segment's significant expense categories which include cost of sales, selling, general and administrative ("SG&A") expenses, and goodwill impairment, if applicable.
The accounting policies of the operating segments are the same as those described in our Annual Report on Form 10-K for the fiscal year ended April 25, 2026. We account for intersegment revenue transactions between our segments consistent with independent third-party transactions, that is, at current market prices. As a result, the manufacturing profit related to sales to our Retail segment is included within the Wholesale segment. Operating income realized on intersegment revenue transactions is therefore generally consistent with the operating income realized on our revenue from independent third-party transactions.
Identifiable assets are cash and equivalents, accounts receivable, net inventories, net property, plant and equipment, right-of-use lease assets, goodwill and other intangible assets. Our unallocated assets include deferred income taxes, corporate assets (including a portion of cash and equivalents), and various other assets. Asset information is regularly reviewed by the CODM at the consolidated level and segment-level asset information is not used for purposes of making decisions, assessing financial performance, or allocating resources.
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The following table presents sales and operating income (loss) by segment:
Quarter Ended July 25, 2026 | ||||||||||||||||||||||||||||||||
| (Unaudited, amounts in thousands) | Wholesale | Retail | Corporate & Other | Intersegment Eliminations | Consolidated | |||||||||||||||||||||||||||
| Sales to external customers | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||||||
| Intersegment sales | ( | — | ||||||||||||||||||||||||||||||
| Total sales | ( | |||||||||||||||||||||||||||||||
| Cost of sales | ( | |||||||||||||||||||||||||||||||
| Gross profit | ( | |||||||||||||||||||||||||||||||
| SG&A expenses | ( | |||||||||||||||||||||||||||||||
| Operating income (loss) | $ | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||
| Interest expense | ( | |||||||||||||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||||||||
| Other income (expense), net | ( | |||||||||||||||||||||||||||||||
| Income before income taxes | $ | ( | ||||||||||||||||||||||||||||||
Quarter Ended July 26, 2025 | ||||||||||||||||||||||||||||||||
| (Unaudited, amounts in thousands) | Wholesale | Retail | Corporate & Other | Intersegment Eliminations | Consolidated | |||||||||||||||||||||||||||
| Sales to external customers | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||||||
| Intersegment sales | ( | — | ||||||||||||||||||||||||||||||
| Total sales | ( | |||||||||||||||||||||||||||||||
| Cost of sales | ( | |||||||||||||||||||||||||||||||
| Gross profit | ( | |||||||||||||||||||||||||||||||
| SG&A expenses | ( | |||||||||||||||||||||||||||||||
| Operating income (loss) | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
| Interest expense | ( | |||||||||||||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||||||||
| Other income (expense), net | ( | |||||||||||||||||||||||||||||||
| Income before income taxes | $ | |||||||||||||||||||||||||||||||
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| Quarter Ended | ||||||||||||||
| (Unaudited, amounts in thousands) | 7/25/2026 | 7/26/2025 | ||||||||||||
| Depreciation and Amortization | ||||||||||||||
| Wholesale segment | $ | $ | ||||||||||||
| Retail segment | ||||||||||||||
| Corporate and Other | ||||||||||||||
| Consolidated depreciation and amortization | $ | $ | ||||||||||||
| Capital Expenditures | ||||||||||||||
| Wholesale segment | $ | $ | ||||||||||||
| Retail segment | ||||||||||||||
| Corporate and Other | ||||||||||||||
| Consolidated capital expenditures | $ | $ | ||||||||||||
Sales by Country (1) | ||||||||||||||
| United States | ||||||||||||||
| Canada | ||||||||||||||
| Other | ||||||||||||||
| Total | ||||||||||||||
(1)Sales are attributed to countries on the basis of the customer's location.
| (Unaudited, amounts in thousands) | 7/25/2026 | 4/25/2026 | ||||||||||||
| Assets | ||||||||||||||
| Wholesale segment | $ | $ | ||||||||||||
| Retail segment | ||||||||||||||
| Unallocated assets | ||||||||||||||
| Consolidated assets | $ | $ | ||||||||||||
| Long-Lived Assets by Geographic Location | ||||||||||||||
| Domestic | $ | $ | ||||||||||||
| International | ||||||||||||||
| Consolidated long-lived assets | $ | $ | ||||||||||||
Note 12: Income Taxes
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Note 13: Earnings per Share
The following is a reconciliation of the numerators and denominators we used in our computations of basic and diluted earnings per share:
| Quarter Ended | ||||||||||||||
| (Unaudited, amounts in thousands, except per share data) | 7/25/2026 | 7/26/2025 | ||||||||||||
| Numerator (basic and diluted): | ||||||||||||||
| Net income (loss) available to common Shareholders | $ | ( | $ | |||||||||||
| Denominator: | ||||||||||||||
| Basic weighted average common shares outstanding | ||||||||||||||
| Contingent common shares | ||||||||||||||
| Stock option dilution | ||||||||||||||
| Diluted weighted average common shares outstanding | ||||||||||||||
| Earnings per Share: | ||||||||||||||
| Basic | $ | ( | $ | |||||||||||
Diluted (1) | $ | ( | $ | |||||||||||
(1)Diluted earnings per share was computed using the treasury stock method.
The values for contingent common shares set forth above reflect the dilutive effect of common shares that we would have issued to employees under the terms of performance-based share awards if the relevant performance period for the award had been the reporting period.
Note 14: Fair Value Measurements
Accounting standards require that we put financial assets and liabilities into one of three categories based on the inputs we use to value them:
•Level 1 — Financial assets and liabilities, the values of which are based on unadjusted quoted market prices for identical assets and liabilities in an active market that we have the ability to access.
•Level 2 — Financial assets and liabilities, the values of which are based on quoted prices in markets that are not active or on model inputs that are observable for substantially the full term of the asset or liability.
•Level 3 — Financial assets and liabilities, the values of which are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.
Accounting standards require that in making fair value measurements, we use observable market data when available. When inputs used to measure fair value fall within different levels of the hierarchy, we categorize the fair value measurement as being in the lowest level that is significant to the measurement. We recognize transfers between levels of the fair value hierarchy at the end of the reporting period in which they occur.
In addition to assets and liabilities that we record at fair value on a recurring basis, we are required to record assets and liabilities at fair value on a non-recurring basis. We measure non-financial assets such as other intangible assets, goodwill, and other long-lived assets at fair value when there is an indicator of impairment, and we record them at fair value only when we recognize an impairment loss.
The following table presents the fair value hierarchy for those assets and liabilities we measured at fair value on a recurring basis at July 25, 2026 and April 25, 2026. There were no transfers into or out of Level 1, Level 2, or Level 3 for any of the periods presented.
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| At July 25, 2026 | ||||||||||||||||||||||||||||||||
| Fair Value Measurements | ||||||||||||||||||||||||||||||||
| (Unaudited, amounts in thousands) | Level 1 | Level 2 | Level 3 | NAV(1) | Total | |||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||
| Marketable securities | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Held-to-maturity investments | ||||||||||||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| At April 25, 2026 | ||||||||||||||||||||||||||||||||
| Fair Value Measurements | ||||||||||||||||||||||||||||||||
| (Unaudited, amounts in thousands) | Level 1 | Level 2 | Level 3 | NAV(1) | Total | |||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||
| Marketable securities | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Held-to-maturity investments | ||||||||||||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
As of April 25, 2026, we held marketable securities to fund future obligations under a non-qualified legacy acquired retirement plan. In the first quarter of fiscal 2027, the vast majority of our marketable securities were sold to fund lump-sum payments to participants to terminate the plan.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
We have prepared this Management’s Discussion and Analysis as an aid to understanding our financial results. It should be read in conjunction with the accompanying Consolidated Financial Statements and related Notes to Consolidated Financial Statements. After a cautionary note regarding forward-looking statements, we begin with an introduction to our key businesses and then provide discussions of our results of operations, liquidity and capital resources, and critical accounting policies.
Cautionary Note Regarding Forward-Looking Statements
La-Z-Boy Incorporated and its subsidiaries (individually and collectively, "we," "our," "us," "La-Z-Boy" or the "Company") make "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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, acquisitions and divestitures, expenses, dividends, share repurchases, liquidity, use of cash and cash requirements, borrowing capacity, investments, future economic performance, and our business and industry.
Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements may include words such as "aim," "anticipates," "believes," "continues," "estimates," "expects," "feels," "forecasts," "hopes," "intends," "likely," "non-recurring," "one-time," "outlook," "plans," "projects," "seeks," "short-term," "target," "unusual," or words of similar meaning, or future or conditional verbs, such as "will," "should," "could," or "may." A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. You should not place undue reliance on forward-looking statements, which speak to our views only as of the date of this report. These forward-looking statements are all based on currently available operating, financial, and competitive information and are subject to various risks and uncertainties, many of which are unforeseeable and beyond our control. 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 performance.
Our actual future results and trends may differ materially from those we anticipate depending on a variety of factors, including, but not limited to, the risks and uncertainties discussed in our Annual Report for the fiscal year ended April 25, 2026, under Item 1A, "Risk Factors" and Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and in our other filings with the Securities and Exchange Commission. Given these risks and uncertainties, you should not rely on forward-looking statements as a prediction of actual results. Any or all of the forward-looking statements contained in this report, our Annual Report for the fiscal year ended April 25, 2026, or any other public statement made by us, including by our management, may turn out to be incorrect. 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.
Introduction
Our Business
We are the leading global producer of reclining chairs and one of the largest manufacturers/distributors of residential furniture in the United States. The La-Z-Boy Stores retail network is the second largest retailer of single-branded furniture in the United States. We manufacture, market, import, export, distribute and retail upholstery furniture products under the La-Z-Boy®, England, and Joybird® tradenames. In addition, we import, distribute and retail accessories and casegoods (wood) furniture products under the Hammary® and Joybird® tradenames.
As of July 25, 2026, our supply chain operations included the following:
•Four major manufacturing locations and 9 distribution centers in the United States and two facilities in Mexico to support our speed-to-market and customization strategy
•A logistics company that distributes a portion of our products in the United States
•A wholesale sales office that is responsible for distribution of our product in the United Kingdom and Ireland
•A global trading company in Hong Kong that helps us manage our Asian supply chain by establishing and maintaining relationships with our Asian suppliers, as well as identifying efficiencies and savings opportunities
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We also participate in two consolidated joint ventures in Thailand that support our international businesses: one that operates a manufacturing facility and another that operates a wholesale sales office.
We sell our products through multiple channels: directly to consumers through retail stores that we own and operate; to furniture retailers or distributors in the United States, Canada, and approximately 45 other countries, including the United Kingdom, China, Australia, and New Zealand; and through our websites, www.la-z-boy.com and www.joybird.com.
•The centerpiece of our retail distribution strategy is our network of 379 La-Z-Boy Stores, over 500 La-Z-Boy Comfort Studio® locations, and over 900 La-Z-Boy branded space locations, each dedicated to marketing our La-Z-Boy branded products.
◦La-Z-Boy Stores help consumers furnish their homes by combining the style, comfort, and quality of La-Z-Boy furniture with our available design services. We own 234 of the La-Z-Boy Stores, while the remainder are independently owned and operated.
◦La-Z-Boy Comfort Studio® locations are defined spaces within larger independent retailers that are dedicated to displaying and selling La-Z-Boy branded products, while La-Z-Boy branded space locations display a curated selection of La-Z-Boy branded products within larger independent dealers. All La-Z-Boy Comfort Studio® locations and La-Z-Boy branded space locations are independently owned and operated.
◦In total, we have approximately 8 million square feet of proprietary floor space dedicated to selling La-Z-Boy branded products in North America within our La-Z-Boy Stores and La-Z-Boy Comfort Studio® locations.
◦We also have approximately 3 million square feet of floor space outside of North America dedicated to selling La-Z-Boy branded products.
•Our other brands, England, Hammary®, and Joybird enjoy distribution through various channels.
◦England has its own dedicated proprietary in-store programs with 465 outlets and approximately 1 million square feet of proprietary floor space.
◦Joybird sells product online, in 16 small-format stores in key markets, and through other distribution channels.
Century Vision Strategy
As La-Z-Boy approaches its centennial anniversary in 2027, we remain focused on executing our Century Vision strategy to grow sales and market share through growth of our consumer brands, La-Z-Boy and Joybird, and sustainably grow our operating margin well beyond this milestone year. Building on a century of innovation, comfort, craftsmanship, and consumer trust, we are working to leverage our iconic brand to expand market reach and strengthen our engagement with consumers, dealers and partners. Through continued investment in brand evolution, retail expansion, digital transformation, innovation, and consumer insights, we aim to deliver the transformational power of comfort to future generations with a consumer-first approach while honoring our almost 100 year heritage that has made La-Z-Boy one of America's most recognized and enduring brands. Our Century Vision strategy continues to have significant runway and we are executing through the following initiatives:
Expanding the La-Z-Boy brand reach
•Leveraging our connection to comfort and reinvigorating our brand with a consumer focus, expanded omni-channel presence, and digital transformation. Our strategic initiatives to leverage and reinvigorate our iconic La-Z-Boy brand center on a renewed focus on leveraging the compelling La-Z-Boy comfort message, accelerating our omni-channel offering, and identifying additional consumer-base growth opportunities. We leverage our consumer insights to develop and deliver meaningful product innovation, particularly in the motion and reclining categories. We also utilize consumer insights to optimize our messaging and marketing campaigns to increase recognition and consideration of La-Z-Boy among both existing and prospective customers. Our Long Live the Lazy campaign, launched in 2024, continues to resonate through its compelling, consumer-inspired message. In 2025, we successfully launched a refreshed brand identity - the first significant evolution of the La-Z-Boy brand in more than two decades - designed to modernize the brand, enhance differentiation, and strengthen relevance with a broader consumer audience across retail and digital footprints. Further, our goal is to connect with consumers along their purchase journey through multiple means, whether online or in person. We are driving change throughout our digital platforms to improve the user experience, with a specific focus on the ease with which customers browse through our broad product assortment,
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customize products to their liking, find stores to make a purchase, or purchase at www.la-z-boy.com. We believe that our digital transformation will improve traffic both online and in our retail locations.
•Growing our La-Z-Boy retail business. We expect to grow our Retail segment through organic same-store sales growth and by increasing company-owned stores through the opening of new stores and acquisitions. Opportunistically acquiring existing La-Z-Boy Stores and opening new La-Z-Boy Stores where we see opportunity for growth or further market penetration continues to be a priority. Over the last five years, as a result of opening new company-owned stores and acquiring independent La-Z-Boy Stores, we have increased our ownership percentage in this store network from 45% to 62%. With 379 stores currently in the La-Z-Boy Store network, we believe there is opportunity to open approximately ten stores annually, with the majority being company-owned, targeting a network of 450 stores.
•Expanding the reach of our wholesale distribution channels. Consumers experience the La-Z-Boy brand in many channels including the La-Z-Boy Store network, the La-Z-Boy Comfort Studio® locations, our store-within-a-store format, and La-Z-Boy branded space locations. While consumers increasingly interact with the brand digitally, our consumers also demonstrate an affinity for visiting our stores to shop, allowing us to frequently deliver the flagship La-Z-Boy Store, La-Z-Boy Comfort Studio®, or La-Z-Boy branded space experience and provide design services. In addition to our branded distribution channels, over 1,000 other dealers sell La-Z-Boy products, which include some of the best-known names in the industry, providing us the benefit of multi-channel distribution. We believe there is significant growth potential for our consumer brands through these retail channels.
Profitably growing the Joybird brand
•Profitably growing the Joybird brand with a digital-first consumer experience. Joybird is a leading omni-channel, direct to consumer retailer and manufacturer of upholstered furniture. We believe that Joybird is a brand with long-term potential and our strategic initiatives in this area focus on driving profitable growth through the opening of additional small-format stores in key markets, expanding distribution channels, driving customer acquisition and awareness through digital marketing, and continued optimization of cost structure.
Enhancing our enterprise capabilities
•Enhancing our enterprise capabilities to support the growth of our consumer brands and enable potential acquisitions for growth. Key to successful growth is ensuring we have the capabilities to support that growth, including an agile supply chain, modern technology for consumers, employees, and analytic capabilities, and by delivering a human-centered employee experience. We continue to have initiatives focused on enhancing these capabilities with a consumer-first focus.
Reportable Segments
Our reportable operating segments include the Retail segment and the Wholesale segment.
•Retail Segment. Our Retail segment consists of one operating segment comprised of our 234 company-owned La-Z-Boy Stores. The Retail segment sells primarily upholstered furniture, in addition to some casegoods and other home furnishings accessories, to end consumers through these stores.
•Wholesale Segment. Our Wholesale segment consists primarily of three operating segments: La-Z-Boy, our largest operating segment, our England subsidiary and our international operating segment, which includes our international La-Z-Boy wholesale and manufacturing businesses. We aggregate these operating segments into one reportable segment because they are economically similar and meet the other aggregation criteria for determining reportable segments. Our Wholesale segment manufactures and imports upholstered furniture, such as recliners and motion furniture, sofas, loveseats, chairs, sectionals, modulars, ottomans and sleeper sofas and imports casegoods (wood) furniture such as bedroom sets, dining room sets, entertainment centers and occasional pieces. The Wholesale segment sells directly to La-Z-Boy Stores, operators of La-Z-Boy Comfort Studio® and branded space locations, England Custom Comfort Center locations, major dealers, and a wide cross-section of other independent retailers.
•Corporate and Other. Corporate and Other includes the shared costs for corporate functions, including human resources, information technology, finance and accounting, and legal, in addition to revenue generated through royalty agreements with companies licensed to use the La-Z-Boy® brand name on various products. We consider our corporate functions to be other business activities and have aggregated them with our other insignificant operating segments,
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including our global trading company in Hong Kong and Joybird, an omni-channel retailer that manufactures upholstered furniture, such as sofas, loveseats, chairs, ottomans, sleeper sofas and beds, and also imports casegoods (wood) furniture, such as occasional tables and other accessories. Joybird sells to the end consumer online through its website, www.joybird.com, through small-format stores in key markets, and through other distribution channels. None of the operating segments included in Corporate and Other meet the requirements of reportable segments.
Results of Operations
Fiscal 2027 First Quarter Compared with Fiscal 2026 First Quarter
Supply Chain Optimization
During the first quarter of fiscal 2027, we announced the planned closure of our leased upholstery assembly plant in San Luis Rio Colorado ("SLRC"), Mexico with operations ceased at the end of the first quarter of fiscal 2027. As a result of this action, during the first quarter of fiscal 2027, we recorded charges within the Wholesale segment of $9.3 million in SG&A expense for the impairment of various long-lived assets and $3.0 million in cost of sales primarily related to severance expense.
Additionally, during the first quarter of fiscal 2027, we announced the planned closure of our leased Joybird manufacturing plant in Tijuana, Mexico, with all manufacturing operations expected to transfer to our U.S. plants by the end of fiscal 2027. As a result of this action, we recorded charges of $5.0 million in cost of sales within Corporate and Other for severance expense, accelerated depreciation, and accelerated lease expense.
La-Z-Boy Incorporated
| Quarter Ended | ||||||||||||||||||||
| (Unaudited, amounts in thousands, except percentages) | 7/25/2026 | 7/26/2025 | % Change | |||||||||||||||||
| Sales | $ | 475,689 | $ | 492,229 | (3.4)% | |||||||||||||||
| Operating income | (2,104) | 21,987 | (109.6)% | |||||||||||||||||
| Operating margin | (0.4)% | 4.5% | ||||||||||||||||||
Sales
Consolidated sales decreased $16.5 million, or 3%, in the first quarter of fiscal 2027, compared with the same period a year ago. Sales in the first quarter of fiscal 2027 benefited from incremental sales from our retail store acquisitions that occurred over the last 12 months and increased sales from our retail store expansion. These increases were more than offset by a lower delivered volume in our wholesale businesses, which includes the absence of sales from our Casegoods businesses that were divested during the fourth quarter of fiscal 2026 and first quarter of fiscal 2027. Excluding the sales from the Casegoods divestiture, consolidated sales decreased 1%.
Operating Margin
Operating margin, which is calculated as operating income as a percentage of sales, decreased 490 basis points in the first quarter of fiscal 2027, compared with the same period a year ago.
•Gross margin, which is calculated as gross profit as a percentage of sales, increased 140 basis points in the first quarter of fiscal 2027, compared with the same period a year ago.
◦Changes in our consolidated mix led to a 210 basis point increase in gross margin in the first quarter of fiscal 2027 compared with the same period a year ago driven by growth of our Retail segment, which has a higher gross margin than our Wholesale segment.
◦Favorable tariff impact, including refunds and pricing actions net of tariff costs, drove an additional increase in gross margin in the first quarter of fiscal 2027 compared with the same period a year ago.
◦Partially offsetting the items above, gross margin decreased in the first quarter of fiscal 2027, compared with the same period a year ago, as a result of the Supply Chain Optimization actions in our Mexico manufacturing operations described above.
•SG&A expenses as a percentage of sales increased 630 basis points in the first quarter of fiscal 2027, compared with the same period a year ago.
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◦Changes in our consolidated mix led to a 220 basis point increase in SG&A expense as a percentage of sales in the first quarter of fiscal 2027 compared with the same period a year ago driven by growth of our Retail segment, which has a higher SG&A expense as a percentage of sales than our Wholesale segment.
◦Supply Chain Optimization actions in our Mexico manufacturing operations described above also contributed to the increase in the first quarter of fiscal 2027 compared with the same period a year ago.
◦Fixed cost deleverage from lower delivered sales further contributed to higher SG&A expense as a percentage of sales in the first quarter of fiscal 2027 compared with the same period a year ago.
We discuss each segment’s results in the following section.
Retail Segment
| Quarter Ended | ||||||||||||||||||||
| (Unaudited, amounts in thousands, except percentages) | 7/25/2026 | 7/26/2025 | % Change | |||||||||||||||||
| Sales | $ | 228,555 | $ | 207,150 | 10.3% | |||||||||||||||
| Operating income | 14,596 | 13,120 | 11.3% | |||||||||||||||||
| Operating margin | 6.4% | 6.3% | ||||||||||||||||||
Sales
The Retail segment’s sales increased $21.4 million, or 10%, in the first quarter of fiscal 2027, compared with the same period a year ago primarily due to $16.4 million of incremental sales resulting from our retail store acquisitions that occurred over the last 12 months along with $6.3 million of sales from the addition of new retail stores, net of closed stores. These increases were partially offset by a slight decline in delivered same-store sales.
Total written sales increased 16% in the first quarter of fiscal 2027, compared with the same period a year ago. Written same-store sales increased 3% over the same period, driven by strong in-store execution. Same-store sales include the sales of all currently active stores that have been open and company-owned for each comparable period and excludes the benefit of net new stores and acquired stores.
Operating Margin
The Retail segment's operating margin increased 10 basis points in the first quarter of fiscal 2027, compared with the same period a year ago.
•Gross margin increased 70 basis points in the first quarter of fiscal 2027, compared with the same period a year ago, primarily due to reduced promotional activity on casegoods products and accessories relative to the prior year along with a favorable shift in product mix towards higher margin product.
•SG&A expenses as a percentage of sales increased 60 basis points in the first quarter of fiscal 2027, compared with the same period a year ago, primarily due to fixed cost deleverage from lower delivered same-store sales.
Wholesale Segment
| Quarter Ended | ||||||||||||||||||||
| (Unaudited, amounts in thousands, except percentages) | 7/25/2026 | 7/26/2025 | % Change | |||||||||||||||||
| Sales to external customers | $ | 218,814 | $ | 255,345 | ||||||||||||||||
| Intersegment sales | 104,132 | 97,612 | ||||||||||||||||||
| Total Sales | 322,946 | 352,957 | (8.5)% | |||||||||||||||||
| Operating income | 6,725 | 25,175 | (73.3)% | |||||||||||||||||
| Operating margin | 2.1% | 7.1% | ||||||||||||||||||
Sales
The Wholesale segment’s sales decreased $30.0 million, or 9%, in the first quarter of fiscal 2027, compared with the same period a year ago, primarily due to lower delivered volume including the absence of sales from our Casegoods wholesale businesses that were divested during the fourth quarter of fiscal 2026 and first quarter of fiscal 2027. Excluding the sales from
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the Casegoods divestiture, the Wholesale segment's sales decreased 5%. These decreases were partially offset by a favorable shift in product mix towards higher priced products.
Operating Margin
The Wholesale segment's operating margin decreased 500 basis points in the first quarter of fiscal 2027, compared with the same period a year ago.
•Gross margin increased 40 basis points in the first quarter of fiscal 2027, compared with the same period a year ago.
◦Favorable tariff impact, including refunds and pricing actions net of tariff costs, drove a 240 basis point increase in gross margin in the first quarter of fiscal 2027 compared with the same period a year ago.
◦Partially offsetting the item above, gross margin decreased 100 basis points in the first quarter of fiscal 2027 compared with the same period a year ago, as a result of the Supply Chain Optimization actions related to our SLRC, Mexico facility described above.
◦Targeted promotional activity also contributed to a 90 basis point decrease in gross margin in the first quarter of fiscal 2027 compared with the same period a year ago.
•SG&A expense as a percentage of sales increased 540 basis points in the first quarter of fiscal 2027, compared with the same period a year ago.
◦SG&A expense as a percentage of sales increased 290 basis points in the first quarter of fiscal 2027 compared with the same period a year ago, as a result of the Supply Chain Optimization actions related to our SLRC, Mexico facility described previously.
◦SG&A expense as a percentage of sales increased an additional 80 basis points in the first quarter of fiscal 2027 compared with the same period a year ago, due to the one-time loss recognized from the divestiture of our Casegoods wholesale business.
◦The remaining increase in SG&A expense as a percentage of sales in the first quarter of fiscal 2027 compared with the same period a year ago was primarily due to fixed cost deleverage on lower delivered sales volume.
Corporate and Other
| Quarter Ended | ||||||||||||||||||||
| (Unaudited, amounts in thousands, except percentages) | 7/25/2026 | 7/26/2025 | % Change | |||||||||||||||||
| Sales | $ | 30,025 | $ | 31,235 | (3.9)% | |||||||||||||||
| Intercompany eliminations | (105,837) | (99,113) | (6.8)% | |||||||||||||||||
| Operating loss | (23,425) | (16,308) | (43.6)% | |||||||||||||||||
Sales
Corporate and Other sales decreased $1.2 million in the first quarter of fiscal 2027, compared with the same period a year ago, resulting from a decrease in Joybird sales to $26.5 million driven by lower delivered volume partially offset by a favorable shift in product mix. Written sales for Joybird decreased 17% in the first quarter of fiscal 2027, compared with the same period a year ago, as this consumer segment continues to be particularly volatile in the current macroeconomic environment.
Intercompany eliminations increased in the first quarter of fiscal 2027 compared with the same period a year ago due to higher sales from our Wholesale segment to our Retail segment.
Operating Loss
Our Corporate and Other operating loss increased $7.1 million in the first quarter of fiscal 2027, compared with the same period a year ago, primarily due to the Supply Chain Optimization actions related to our Tijuana, Mexico facility described above along with Joybird's operating loss resulting from lower delivered volume and unfavorable gross margin.
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Non-Operating Income (Expense)
Other income (expense), net was $4.3 million of expense in the first quarter of fiscal 2027, compared with $0.6 million of expense in the same period a year ago. The expense in fiscal 2027 was primarily due to a $4.1 million loss related to the termination and lump-sum settlement of our non-qualified legacy acquired retirement plan along with losses on investments held to fund the plan.
Interest Income
Interest income was $0.2 million lower in the first quarter of fiscal 2027, compared with the same period a year ago, primarily driven by lower interest rates along with lower interest-bearing cash balances.
Income Taxes
Our effective tax rate was 45.8% benefit for the first quarter of fiscal 2027, compared with 25.0% expense for the first quarter of fiscal 2026. Due to the immaterial net loss position in the first quarter of fiscal 2027, the change in the effective tax rate was disproportionately impacted by one-time impacts of certain non-deductible supply chain optimization charges along with the tax benefits from the vesting of stock awards and state refunds. We expect a more normalized effective tax rate for the full year fiscal 2027.
Liquidity and Capital Resources
Our sources of liquidity include cash and cash equivalents, short-term and long-term investments, cash from operations, and amounts available under our credit facility. We believe these sources remain adequate to meet our short-term and long-term liquidity requirements, finance our long-term growth plans, and fulfill other cash requirements for day-to-day operations and capital expenditures, including fiscal 2027 contractual obligations.
We had cash and cash equivalents of $267.3 million at July 25, 2026, compared with $303.2 million at April 25, 2026. In addition, we had investments to enhance our returns on cash of $5.4 million at July 25, 2026, compared with $5.5 million at April 25, 2026.
The following table illustrates the main components of our cash flows:
| Quarter Ended | ||||||||||||||
| (Unaudited, amounts in thousands) | 7/25/2026 | 7/26/2025 | ||||||||||||
| Cash Flows Provided By (Used For) | ||||||||||||||
| Net cash provided by operating activities | $ | 15,648 | $ | 36,292 | ||||||||||
| Net cash used for investing activities | (12,986) | (18,819) | ||||||||||||
| Net cash used for financing activities | (38,110) | (27,716) | ||||||||||||
| Exchange rate changes | (511) | 338 | ||||||||||||
| Change in cash and cash equivalents | $ | (35,959) | $ | (9,905) | ||||||||||
Operating Activities
During the first quarter of fiscal 2027, net cash provided by operating activities was $15.6 million, primarily attributable to net income, adjusted for non-cash items, and improvements in working capital, partially offset by the payout of our fiscal 2026 incentive compensation award and a $10.9 million lump-sum payment to participants to terminate our non-qualified legacy acquired retirement plan (funded by cash proceeds from the sale of investments). Net cash provided by operating activities in first quarter of fiscal 2027 was $20.6 million lower than the same period a year ago primarily due to lower net income, adjusted for non-cash items and the lump-sum payments to participants to terminate our non-qualified legacy acquired retirement plan.
Investing Activities
During the first quarter of fiscal 2027, net cash used for investing activities was $13.0 million, a decrease of $5.8 million compared with the same period a year ago, due to proceeds from the sale of investments and proceeds from the divestiture of our Casegoods wholesale business, partially offset by increased cash paid for acquisitions along with increased capital expenditures. Cash used for investing activities in fiscal 2027 included the following:
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•Cash used for capital expenditures in the period was $23.3 million, which was primarily related to our distribution and home delivery transformation, manufacturing-related investments, and La-Z-Boy Stores (new stores and remodels). We anticipate that spending on these items will continue, with full year fiscal 2027 capital expenditures expected to be in the range of $90 to $110 million. We have no material contractual commitments outstanding for future capital expenditures.
•Cash used for acquisitions was $15.7 million, related to the acquisition of the retail business in the Gulf Coast region.
•Proceeds from the sale of investments were $18.5 million, primarily to fund the lump-sum payments to participants to terminate our non-qualified legacy acquired retirement plan.
•Proceeds from the sale of assets were $7.5 million, primarily from the divestiture of our Casegoods wholesale business.
Financing Activities
During the first quarter of fiscal 2027, net cash used for financing activities was $38.1 million, an increase of $10.4 million compared with the same period a year ago, primarily due to an increase in share repurchases, partially offset by proceeds from exercised stock options. Cash used for financing activities in fiscal 2027 included the following:
•Cash paid to repurchase 0.7 million shares of company stock was $25.1 million. In April 2026, our board of directors rescinded the remaining repurchase authorization as of May 14, 2026, and established a new stock repurchase program, effective as of May 14, 2026, authorizing the repurchase of up to $300 million of Company stock. The new authorization does not have an expiration date. As of July 25, 2026, the maximum dollar value of shares that remained under the current repurchase program was approximately $291.2 million. With the operating cash flows we anticipate generating in fiscal 2027, we expect to continue repurchasing Company stock, subject to market conditions and other factors as deemed relevant by our board of directors.
•Cash paid to our shareholders in quarterly dividends was $9.7 million. Our board of directors has sole authority to determine if and when we will declare future dividends and on what terms. We expect the board to continue declaring regular quarterly cash dividends for the foreseeable future, but it may discontinue doing so at any time at the board's discretion.
•Cash paid for tax withholding on stock issued as part of our employee benefit plans, net of proceeds from exercised stock options, was $3.1 million.
On October 15, 2021, we entered into a credit agreement with Wells Fargo Bank, National Association, as administrative agent, the other agents and lenders named therein and the other parties thereto (as amended prior to July 1, 2025, the “Credit Agreement”). The Credit Agreement provides for an unsecured revolving credit facility in an aggregate principal amount of $200 million, which includes a $50 million letter of credit sub-limit (the “Credit Facility”).
On July 1, 2025, we entered into an amendment to the Credit Agreement (the “Credit Agreement Amendment”). The Credit Agreement Amendment, among other things, (i) extended the maturity date of the Credit Facility from October 15, 2026 to July 1, 2030, (ii) increased the accordion basket for additional revolving commitments and/or incremental term loans from $100 million to $125 million, (iii) removed the secured overnight financing rate (“SOFR”) credit spread adjustment, and (iv) decreased the consolidated fixed charge coverage ratio required to be satisfied under the Company’s financial covenant.
Borrowings under the Credit Facility may be used by the Company for general corporate purposes. The Credit Facility will mature on July 1, 2030, and provides us the ability to extend the maturity date for two additional one-year periods, subject to the satisfaction of customary conditions.
The Credit Facility contains certain restrictive loan covenants, including, among others, financial covenants requiring a maximum consolidated net lease adjusted leverage ratio and a minimum consolidated fixed charge coverage ratio, as well as customary covenants limiting our ability to incur indebtedness, grant liens, make acquisitions, merge or consolidate, and dispose of certain assets.
As of July 25, 2026, we have no borrowings outstanding under the Credit Facility and we were in compliance with our financial covenants under the Credit Facility. We believe our cash and cash equivalents, short-term investments, and cash from operations, in addition to our available Credit Facility, will provide adequate liquidity for our business operations over the next 12 months.
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Exchange Rate Changes
Due to changes in exchange rates, our cash and cash equivalents decreased by $0.5 million for the quarter ended July 25, 2026. These changes impacted our cash balances held in Canada and Thailand.
Other
During the first quarter of fiscal 2027, there were no material changes to the information about our contractual obligations and commitments disclosed in our Annual Report on Form 10-K for the fiscal year ended April 25, 2026. We do not expect our continuing compliance with existing federal, state and local statutes dealing with protection of the environment to have a material effect on our capital expenditures, earnings, competitive position or liquidity.
Critical Accounting Policies
We disclosed our critical accounting policies in our Annual Report on Form 10-K for the fiscal year ended April 25, 2026. There were no material changes to our critical accounting policies or estimates during the quarter ended July 25, 2026.
Recent Accounting Pronouncements
See Note 1, Basis of Presentation, to the consolidated financial statements included in this Quarterly Report on Form 10-Q for a discussion of recently adopted accounting standards and other new accounting standards.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
During the first quarter of fiscal 2027, there were no material changes from the information contained in Item 7A of our Annual Report on Form 10-K for the fiscal year ended April 25, 2026.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures. As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) of the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that such disclosure controls and procedures are effective to ensure that information required to be disclosed in our periodic reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting. There were no changes in our internal controls over financial reporting that occurred during the first quarter of fiscal 2027 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
ITEM 1A. RISK FACTORS
We disclosed our risk factors in our Annual Report on Form 10-K for the fiscal year ended April 25, 2026. There have been no material changes to our risk factors during the first quarter of fiscal 2027.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Our board of directors has authorized the repurchase of Company stock. Repurchases are made at management's discretion from time to time on the open market or in privately negotiated transactions and may be through Rule 10b5-1 plans. In April 2026, our board of directors rescinded the remaining repurchase authorization as of May 14, 2026, and established a new stock repurchase program, effective as of May 14, 2026, authorizing the repurchase of up to $300 million of Company stock. The new authorization does not have an expiration date. We spent $25.1 million in the first quarter of fiscal 2027 to repurchase 0.7 million shares under our previous board-authorized plan and new repurchase program. As of July 25, 2026, the maximum dollar value of shares that remained under the current repurchase program was $291.2 million.
The following table summarizes our repurchases of Company stock during the quarter ended July 25, 2026, and includes shares purchased from employees to satisfy their withholding tax obligations upon vesting of restricted shares:
| (Unaudited, shares in thousands, except per share data) | Total number of shares repurchased (1) | Average price paid per share | Total number of shares repurchased as part of publicly announced plan (2) | Maximum approximate dollar value that may yet be repurchased under the plan ($ in millions) | ||||||||||||||||||||||
| Fiscal May (April 26 – May 30, 2026) | 463 | $ | 35.26 | 463 | $ | 300 | ||||||||||||||||||||
| Fiscal June (May 31 – Jun 27, 2026) | 319 | $ | 40.74 | 196 | $ | 292 | ||||||||||||||||||||
| Fiscal July (June 28 – July 25, 2026) | 36 | $ | 40.49 | 20 | $ | 291 | ||||||||||||||||||||
Total (Fiscal First Quarter of 2027) | 818 | 679 | $ | 291 | ||||||||||||||||||||||
(1) In addition to the 463,300 shares we repurchased during the quarter as part of our publicly announced, board-authorized plan that was rescinded effective as of May 14, 2026, and the 215,270 shares we repurchased as part of the new board-authorized repurchase plan described above, this column includes 139,704 shares we repurchased from employees to satisfy their withholding tax obligations upon vesting of restricted and performance based shares.
(2) On October 28, 1987, our board of directors announced the authorization of the plan to repurchase Company stock. The plan originally authorized 1.0 million shares, and since October 1987, 33.5 million shares have been added to the plan for repurchase. In April 2026, our board of directors rescinded the remaining repurchase authorization as of May 14, 2026, and established a new stock repurchase program, effective as of May 14, 2026, authorizing the repurchase of up to $300 million of Company stock. The new authorization does not have an expiration date.
ITEM 5. OTHER INFORMATION
Securities Trading Plans of Directors and Officers
During the quarter ended July 25, 2026, none of our directors or officers adopted or terminated a Rule 10b5-1 trading plan or adopted or terminated a non-Rule 10b5-1 trading arrangement (as each term is defined in Item 408 of Regulation S-K).
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ITEM 6. EXHIBITS
| Exhibit Number | Description | |||||||
| (31.1) | Certifications of Chief Executive Officer pursuant to Rule 13a-14(a) | |||||||
| (31.2) | Certifications of Chief Financial Officer pursuant to Rule 13a-14(a) | |||||||
| (32) | Certifications of Executive Officers pursuant to 18 U.S.C. Section 1350(b) | |||||||
| (101.INS) | Inline XBRL Instance Document | |||||||
| (101.SCH) | Inline XBRL Taxonomy Extension Schema Document | |||||||
| (101.CAL) | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| (101.LAB) | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
| (101.PRE) | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| (101.DEF) | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| (104) | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended July 25, 2026, formatted in Inline XBRL (included in Exhibit 101) | |||||||
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| LA-Z-BOY INCORPORATED | ||||||||
| (Registrant) | ||||||||
| Date: August 18, 2026 | ||||||||
| BY: /s/ Jennifer L. McCurry | ||||||||
| Jennifer L. McCurry Vice President, Corporate Controller and Chief Accounting Officer | ||||||||
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