La-Z-Boy’s Retail segment posted 16% growth in written sales during its fiscal 2027 first quarter, as acquisitions, new store openings and positive same-store sales helped offset weaker results in the company’s Wholesale and Joybird businesses.
Written same-store sales increased 3% year over year, representing a 500-basis-point sequential improvement from the fourth quarter. La-Z-Boy said the increase reflected stronger design sales, conversion rates and average ticket, suggesting that the Retail improvement extended beyond simply adding locations.
Delivered Retail sales increased 10% to $229 million, primarily because of contributions from acquired and newly opened stores. Retail GAAP operating margin improved to 6.4% from 6.3%, while adjusted operating margin increased to 6.5% from 6.3%.
La-Z-Boy added four company-owned stores during the quarter, including one newly opened location and three acquired stores. The company also signed an agreement to acquire another two independent La-Z-Boy stores, continuing its strategy of bringing more of its branded retail distribution under direct ownership.
The strength in Retail contrasts with the broader company results. Consolidated sales declined 3% to $476 million, or 1% excluding the May divestiture of the wholesale casegoods business. Wholesale sales fell 9% to $323 million on a reported basis, while Joybird written sales declined 17% and delivered sales fell 4% to $27 million.
La-Z-Boy is also reshaping its manufacturing and distribution infrastructure. The company completed the wholesale casegoods divestiture in May and ended production at one of two manufacturing plants scheduled for closure as it consolidates production into its U.S. network. It continues to invest in a multi-year distribution and home-delivery transformation.
The balance sheet remains strong despite those investments. La-Z-Boy finished the quarter with $267 million of cash and no external debt. It invested $39 million in the business, including $23 million of capital expenditures and $16 million for acquisitions, while returning approximately $35 million to shareholders, including $25 million of buybacks and $10 million of dividends.
For the fiscal second quarter, La-Z-Boy expects sales of $500 million to $520 million, representing growth ranging from negative 1% to positive 2% excluding the casegoods divestiture. Adjusted operating margin is expected to range from 4% to 5.5% as the company balances Retail momentum against advertising, store investment, pricing, digital transformation and supply-chain restructuring costs.
KEY QUOTES:
“During our first quarter, we continued to gain share and drive momentum in our Retail segment, where we control the full end-to-end consumer experience. We delivered strong sales growth across both delivered and written sales, and I’m particularly pleased to highlight growth across all three strategic pillars of same-store sales, new store expansion, and acquisitions of independent dealers, all while expanding operating margin. Our 3% written same-store sales growth was driven by excellence in execution across marketing, product innovation, and in-store inspiration, despite a continued challenging backdrop for our industry. This momentum demonstrated that our iconic La-Z-Boy brand, disproportionately growing our Retail business, and our predominantly U.S. based supply chain continue to be competitive advantages in an uneven consumer environment.”
Melinda D. Whittington, Board Chair, President and Chief Executive Officer of La-Z-Boy Incorporated
