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LA-Z-BOY INC

LA-Z-BOY INCLZB财报

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La-Z-Boy Inc. is an American furniture manufacturer based in Monroe, Michigan, United States, that makes home furniture, including upholstered recliners, sofas, stationary chairs, lift chairs and sleeper sofas. The company employs more than 11,000 people.

What changed in LA-Z-BOY INC's 10-K — 2024 vs 2025

Top changes in LA-Z-BOY INC's 2025 10-K

222 paragraphs added · 217 removed · 172 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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When it comes to giving, our vision is to improve the lives of others by developing exceptional 10 Table of Contents programs based on partnerships where employees feel a sense of connection and pride in their communities and our mission is to enhance the quality of life in the communities in which we live and serve through leadership, financial contributions, and volunteer efforts.
When it comes to giving, our vision is to improve the lives of others by developing exceptional programs based on partnerships where employees feel a sense of connection and pride in their communities and our 10 Table of Contents mission is to enhance the quality of life in the communities in which we live and serve through leadership, financial contributions, and volunteer efforts.
We work to forge relationships with agencies, such as the Occupational Safety and Health Administration (OSHA), to understand how we can best adhere to health and safety practices. Additionally, the National Safety Council (NSC) has recognized La-Z-Boy with multiple awards for safety performance and leadership throughout the Company’s history.
We work to forge relationships with agencies, such as the Occupational Safety and Health Administration (OSHA), to understand how we can best adhere to health and safety practices. Additionally, the National Safety Council (NSC) has recognized La-Z-Boy Incorporated with multiple awards for safety performance and leadership throughout the Company’s history.
Practices Regarding Working Capital Items The following describes our significant practices regarding working capital items. Inventory: For our upholstery business within our Wholesale segment, we maintain raw materials and work-in-process inventory at our manufacturing locations. Finished goods inventory is maintained at our 14 distribution centers as well as our manufacturing locations.
Practices Regarding Working Capital Items The following describes our significant practices regarding working capital items. Inventory: For our upholstery business within our Wholesale segment, we maintain raw materials and work-in-process inventory at our manufacturing locations. Finished goods inventory is maintained at our distribution centers as well as our manufacturing locations.
Our philanthropic initiatives include the La-Z-Boy Foundation, local community involvement, disaster relief, and our signature charity, Ronald McDonald House Charities. La-Z-Boy is honored to be the official furniture provider for Ronald McDonald House Charities.
Our philanthropic initiatives include the La-Z-Boy Foundation, local community involvement, disaster relief, and our signature charity, Ronald McDonald House Charities. La-Z-Boy Incorporated is honored to be the official furniture provider for Ronald McDonald House Charities.
Today, our La-Z-Boy brand is one of the most recognized brands in the furniture industry. We are the leading global producer of reclining chairs and one of the largest manufacturer/distributors of residential furniture in the United States . The La-Z-Boy Furniture Galleries ® stores retail network is the third largest retailer of single-branded furniture in the United States .
Today, our La-Z-Boy brand is one of the most recognized brands in the furniture industry. 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 Furniture Galleries ® stores retail network is the third largest retailer of single-branded furniture in the United States .
We have provided additional detailed information regarding our segments and their products in Note 17, Segment Information, to our consolidated financial statements and Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" section, both of which are included in this report.
We have provided additional detailed information regarding our segments and their products in Note 16, Segment Information, to our consolidated financial statements and Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" section, both of which are included in this report.
Seasonal Business Our business has historically displayed seasonal patterns driven by consumer behavior with demand highest in the winter months as discretionary spend tends to shift toward travel and leisure activities during the summer months. For our wholesale 5 Table of Contents business, our fiscal fourth quarter has historically had the highest volume of delivered sales relative to other quarters.
Seasonal Business Our business has historically displayed seasonal patterns driven by consumer behavior with demand highest in the winter months as discretionary spend tends to shift toward travel and leisure activities during the summer months. For our wholesale business, our fiscal fourth quarter has historically had the highest volume of delivered sales relative to other quarters.
While mainly located throughout the United States and Canada, we also have customers located in various other countries, including the United Kingdom, China, Australia, South Korea and New Zealand.
While mainly located throughout the United States and Canada, we also have customers located in various other countries, including the United Kingdom, Australia, China and New Zealand.
Throughout fiscal 2024, La-Z-Boy has continued our support of providing furniture and financial contributions to non-profit organizations with special emphasis on arts/culture/humanities, community enrichment, education, and health and human services.
Throughout fiscal 2025, La-Z-Boy Incorporated has continued our support of providing furniture and financial contributions to non-profit organizations with special emphasis on arts/culture/humanities, community enrichment, education, and health and human services.
All 528 La-Z-Boy Comfort Studio ® locations are independently owned and operated. ◦ In total, we have approximately 7.6 million square feet of proprietary floor space dedicated to selling La-Z-Boy branded products in North America. ◦ We also have approximately 2.8 million square feet of floor space outside of the United States and Canada dedicated to selling La-Z-Boy branded products. • Our other brands, England, American Drew, Hammary, and Kincaid enjoy distribution through many of the same outlets, with slightly over half of Hammary’s sales originating through the La-Z-Boy Furniture Galleries ® store network. ◦ Kincaid and England have their own dedicated proprietary in-store programs with 634 outlets and approximately 1.9 million square feet of proprietary floor space. • In total, our proprietary floor space includes approximately 12.3 million square feet worldwide. • Joybird sells product primarily online and has 12 small-format stores in key urban markets. 4 Table of Contents Principal Products and Industry Segments Our reportable operating segments include the Retail segment and the Wholesale segment.
All La-Z-Boy Comfort Studio ® locations and La-Z-Boy branded space locations are independently owned and operated. ◦ In total, we have approximately 7.7 million square feet of proprietary floor space dedicated to selling La-Z-Boy branded products in North America within our La-Z-Boy Furniture Galleries ® stores and La-Z-Boy Comfort Studio ® locations. ◦ We also have approximately 2.6 million square feet of floor space outside of the United States and Canada dedicated to selling La-Z-Boy branded products. • Our other brands, England, American Drew, Hammary, and Kincaid enjoy distribution through many of the same outlets, with over half of Hammary’s sales originating through the La-Z-Boy Furniture Galleries ® store network. ◦ Kincaid and England have their own dedicated proprietary in-store programs with 662 outlets and approximately 1.9 million square feet of proprietary floor space. • Joybird sells product primarily online and has 12 small-format stores in key urban markets. 4 Table of Contents Principal Products and Industry Segments Our reportable operating segments include the Retail segment and the Wholesale segment.
Customers We sell directly to end consumers through our company-owned La-Z-Boy Furniture Galleries ® stores that make up our Retail segment, our small-format Joybird stores, and our websites, www.la-z-boy.com and www.joybird.com. Sales in our Wholesale segment are primarily to third-party furniture retailers.
Customers We sell directly to end consumers through our company-owned La-Z-Boy Furniture Galleries ® stores that make up our Retail segment, our small-format Joybird stores, and our websites, www.la-z-boy.com and www.joybird.com. Sales in our Wholesale segment are primarily to third-party furniture retailers, which also includes independently-owned La-Z-Boy Furniture Galleries ® .
As of April 27, 2024, our supply chain operations included the following: • Five major manufacturing locations and 14 distribution centers in the United States and four 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 • An upholstery manufacturing business in the United Kingdom • A global trading company in Hong Kong which helps us manage our Asian supply chain by establishing and maintaining relationships with our Asian suppliers, as well as identifying efficiencies and savings opportunities 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.
As of April 26, 2025, our supply chain operations included the following: • Five major manufacturing locations and 15 distribution centers in the United States and three 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 • An upholstery manufacturing business in the United Kingdom and 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 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 also license the use of the La-Z-Boy trademark on contract office furniture, outdoor furniture, and non-furniture products, as these arrangements enhance our brand awareness, broaden the perceptions of La-Z-Boy, and create visibility of the La-Z-Boy brand in channels outside of the residential furniture industry.
We also license the use of the La-Z-Boy trademark on contract office furniture, outdoor furniture, furniture for recreational vehicles, and certain non-furniture products, as these arrangements enhance our brand awareness, broaden the perceptions of La-Z-Boy, and create visibility of the La-Z-Boy brand in channels outside of the residential furniture industry.
Additionally, the Company provides opportunities for employee recognition from peers and leaders through our BRAVO program, and also periodically administers employee engagement surveys. Community Giving Throughout our 97-year history, giving back to our communities has been woven through La-Z-Boy’s culture following the example set by our founders.
Additionally, the Company provides opportunities for employee recognition from peers and leaders through our BRAVO program, and also periodically administers employee engagement surveys. Community Giving Throughout our 98-year history, giving back to our communities has been woven through La-Z-Boy Incorporated’s culture following the example set by our founders.
For our retail businesses, which includes our company-owned retail stores, our fiscal third quarter typically has the highest volume of delivered sales relative to other quarters. In a typical year, we schedule production to maintain consistent manufacturing activity throughout the year whenever possible.
For our retail businesses, which includes our company-owned retail stores, our fiscal third and fourth quarters typically have the highest volume of delivered sales relative to other quarters. In a typical year, we schedule production to maintain consistent manufacturing activity throughout the year whenever possible.
Casegoods products, in contrast, are longer-lived and frequently purchased in groupings or "suites," resulting in a much larger cost to the consumer. As a result, casegoods sales are more sensitive to economic conditions, including growth or a slowdown in the housing market, whereas upholstered furniture normally exhibits a less volatile sales pattern over an economic cycle.
Casegoods products, in contrast, are longer-lived and frequently purchased in groupings or "suites," resulting in a much larger cost to the consumer. As a result, casegoods sales are more sensitive to economic conditions, including growth or a slowdown in the housing market, whereas upholstered furniture, while still impacted, may exhibit a less volatile sales pattern over an economic cycle.
We own 187 of the La-Z-Boy Furniture Galleries ® 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.
We own 203 of the La-Z-Boy Furniture Galleries ® 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.
We have formal agreements with many furniture retailers for them to display and merchandise products from one or more of our operating units and sell them to consumers in dedicated retail space, either in stand-alone stores or dedicated proprietary galleries, studios or branded spaces within their stores.
We have formal agreements with many furniture retailers for them to display and merchandise products from one or more of our operating units and sell them to consumers in dedicated retail space, either in stand-alone stores or dedicated proprietary galleries, or La-Z-Boy Comfort Studio ® locations within their stores.
As we begin fiscal 2025, we anticipate that prices of such materials and parts will remain relatively consistent with those seen at the end of fiscal 2024, with potential increases due to economic volatility and price and wage inflation related to our core materials.
In fiscal 2026, we anticipate that prices of such materials and parts will remain relatively consistent with those seen at the end of fiscal 2025, with potential increases due to economic volatility, tariffs and inflation related to our core materials.
We purchase most of our polyurethane foam from three suppliers, which have several facilities across the United States. We purchase cover from a variety of sources, but we rely on a limited number of major suppliers.
We purchase most of our polyurethane foam from three suppliers, which have several facilities across the United States and the vast majority of our polyester batting is also sourced within the United States. We purchase cover from a variety of sources, but we rely on a limited number of major suppliers.
Historically, the size of our backlog at a given time varies and may not be indicative of our future sales and, therefore, we do not rely entirely on backlogs to predict future sales. Our wholesale backlog was $136.6 million as of April 27, 2024.
Historically, the size of our backlog at a given time varies and may not be indicative of our future sales and, therefore, we do not rely entirely on backlogs to predict future sales. Our wholesale backlog was $119.5 million as of April 26, 2025, a 13% decrease compared with our fiscal 2024 year end backlog of $136.6 million.
Customer Deposits: We collect a deposit from our customers at the time a customer order is placed in one of our company-owned retail stores or through our websites, www.la-z-boy.com and www.joybird.com. Customer deposits decreased $17.0 million as of fiscal year end 2024 compared with fiscal year end 2023, primarily due to a slight reduction in backlog.
Accounts Payable: Our accounts payable decreased $0.5 million as of year end fiscal 2025 compared with year end fiscal 2024, primarily reflecting lower inventory purchases. Customer Deposits: We collect a deposit from our customers at the time a customer order is placed in one of our company-owned retail stores or through our websites, www.la-z-boy.com and www.joybird.com.
We sell our products through multiple channels: to furniture retailers or distributors in the United States, Canada, and approximately 50 other countries, including the United Kingdom, China, Australia, South Korea and New Zealand; directly to consumers through retail stores that we own and operate; and through our websites, www.la-z-boy.com and www.joybird.com. • The centerpiece of our retail distribution strategy is our network of 355 La-Z-Boy Furniture Galleries ® stores and 528 La-Z-Boy Comfort Studio ® locations, each dedicated to marketing our La-Z-Boy branded products.
We sell our products through multiple channels: to furniture retailers or distributors in the United States, Canada, and approximately 50 other countries, including the United Kingdom, Australia, China, and New Zealand; directly to consumers through retail stores that we own and operate; and through our websites, www.la-z-boy.com and www.joybird.com. • The centerpiece of our retail distribution strategy is our network of 366 La-Z-Boy Furniture Galleries ® stores, over 500 La-Z-Boy Comfort Studio ® locations, and over 500 La-Z-Boy branded space locations, each dedicated to marketing our La-Z-Boy branded products. ◦ La-Z-Boy Furniture Galleries ® stores help consumers furnish their homes by combining the style, comfort, and quality of La-Z-Boy furniture with our available design services.
We consider our La-Z-Boy trademark to be among our most valuable assets and we have registered that trademark and others in the United States and various other countries where our products are sold. These trademarks have a perpetual life, subject to renewal. We license the use of the La-Z-Boy trademark to certain international partners and dealers outside of North America.
Additionally, we own a number of other trademarks that we utilize in marketing our products. We consider our La-Z-Boy trademark to be among our most valuable assets and we have registered that trademark and others in the United States and various other countries where our products are sold. These trademarks have a perpetual life, subject to renewal.
We manage our Asian supply chain through our global trading company in Hong Kong, which works to identify efficiencies and savings opportunities, while verifying La-Z-Boy quality standards are being adhered to and managing the relationships with our Asian suppliers.
We manage our Asian supply chain through our global trading company in Hong Kong, which works to identify efficiencies and savings opportunities, while verifying La-Z-Boy quality standards are being adhered to and managing the relationships with our Asian suppliers. During fiscal 2025, the cost of materials and parts used for manufacturing decreased across several categories.
Our company-owned La-Z-Boy Furniture Galleries ® stores have finished goods inventory at the stores for display purposes. Our Joybird business maintains raw materials and work-in-process inventory at its manufacturing location. Joybird finished goods inventory is maintained at our distribution centers, at its manufacturing and warehouse locations, or in-transit to the end consumer.
Our Joybird business maintains raw materials and work-in-process inventory at its manufacturing location. Joybird finished goods inventory is maintained at our distribution centers, at its manufacturing and warehouse locations, or in-transit to the end consumer.
Orders and Backlog We typically build upholstery units based on specific orders, either for dealer stock or to fill consumers' custom orders. We import casegoods product primarily to fill our internal orders, rather than customer or consumer orders, resulting in higher finished goods inventory on hand as a percentage of sales.
Orders and Backlog We typically build upholstery units based on specific orders, either for dealer stock or to fill consumers' custom orders, whereas we import casegoods product primarily to fill our internal orders, rather than customer or consumer orders.
We purchase more than half of our cover in a raw state (fabric rolls or leather hides) from suppliers in multiple countries including China, the United States, and Brazil, then cut and sew it into cover in our cut and sew facilities in Mexico.
We purchase approximately two-thirds of our cover in a raw state (fabric rolls or leather hides) from suppliers in multiple countries including China, the United States, Vietnam and Brazil. Fabric and leather are primarily imported directly into Mexico where it is then cut and sewn into cover in our cut and sew facilities.
Maintaining, updating, and, when appropriate, expanding our proprietary distribution network is a key part of our overall sales and marketing strategy. We intend, over the long-term, to not only increase the number of stores in the network but also to continue to improve their quality, including upgrading old-format stores to our new concept design through remodels and relocations.
We intend, over the long-term, to not only increase the number of stores in the network but also to continue to improve their quality, including upgrading old-format stores to our new concept design through remodels and relocations. We continue to maintain and update our current stores to improve the quality of the network.
While our intellectual property rights in the aggregate are important to the operation of our business, we do not believe that any existing patent, license, trademark or other intellectual property right (other than the La-Z-Boy trademark) is of such importance that its loss or termination would have a material adverse effect on our business taken as a whole.
We have followed a policy of filing patent applications for the United States and select foreign countries on inventions, designs and improvements that we deem valuable, but these patents do expire at various times. 8 Table of Contents While our intellectual property rights in the aggregate are important to the operation of our business, we do not believe that any existing patent, license, trademark or other intellectual property right (other than the La-Z-Boy trademark) is of such importance that its loss or termination would have a material adverse effect on our business taken as a whole.
Based on a review of all currently known facts and our experience with previous environmental matters, we currently do not believe it is probable that we will have any additional loss for environmental matters that would be material to our consolidated financial statements. 8 Table of Contents Human Capital Employees We employed approximately 10,200 full-time equivalent employees at the end of fiscal 2024, compared with approximately 10,500 employees at the end of fiscal 2023.
Based on a review of all currently known facts and our experience with previous environmental matters, we currently do not believe it is probable that we will have any additional loss for environmental matters that would be material to our consolidated financial statements.
We employ the majority of our employees on a full-time basis. Purpose and Values At La-Z-Boy, we believe in the transformational power of comfort. We provide an excellent consumer experience, create high quality products and empower people to transform rooms, homes and communities with comfort. Our teams are committed to our core values of Courage, Curiosity and Compassion.
We provide an excellent consumer experience, create high quality products and empower people to transform rooms, homes and communities with comfort. Our teams are committed to our core values of Courage, Curiosity and Compassion.
The prices we paid for imported products, including associated transportation costs, decreased throughout most of 2024 compared with fiscal 2023. While ocean freight costs decreased during the first half of the year, rates rose near the end of our fiscal year as a result of supply challenges in global shipping routes.
The prices we paid for imported products, including associated transportation, increased during 2025 compared with fiscal 2024, mainly due to higher ocean freight costs as a result of supply challenges in global shipping routes.
Trademarks, Licenses and Patents We own the La-Z-Boy trademark, which is essential to the Wholesale and Retail segments of our business. We also own the Joybird trademark, which, along with the La-Z-Boy trademark, is essential to our e-commerce business. Additionally, we own a number of other trademarks that we utilize in marketing our products.
Department stores and big box retailers with an online presence also offer products that compete with some of our product lines. Trademarks, Licenses and Patents We own the La-Z-Boy trademark, which is essential to the Wholesale and Retail segments of our business. We also own the Joybird trademark, which, along with the La-Z-Boy trademark, is essential to our e-commerce business.
We use these suppliers primarily to leverage our buying power, to control quality and product flow, and because their capabilities align with our product design needs.
In fiscal 2025, we purchased over 90% of this imported product from Vietnam, with roughly half coming from three major suppliers. We use these suppliers primarily to leverage our buying power, to control quality and product flow, and because their capabilities align with our product design needs.
Also driven by the seasonal slowdown in the summer, each of our retail businesses typically experience their lowest sales in our fiscal first quarter. During fiscal 2024, we experienced our largest sales in the fourth quarter for both our wholesale and retail businesses, which we believe was consistent with overall trends in the furniture industry.
During fiscal 2025, we experienced our largest sales in the fourth quarter for both our wholesale and retail businesses, which we believe was consistent with overall trends in the furniture industry and we anticipate typical seasonality for both our wholesale and retail businesses in fiscal 2026.
Direct-to-consumer brands bypass brick and mortar retailers entirely, or in some cases, have developed a product that can be shipped more easily than traditional upholstered furniture, thus increasing competition for our products. The increased ability of consumers to purchase furniture through various furniture manufacturers' and digital-only retailers' internet websites has also increased competition in the industry.
In addition, alternative distribution channels have increasingly affected our retail markets. Direct-to-consumer brands bypass brick and mortar retailers entirely, or in some cases, have developed a product that can be shipped more easily than traditional upholstered furniture, thus increasing competition for our products.
We are not afraid to try new things, we are relentless in our mission to understand our business and consumers, and we honor our almost 100-year legacy that was built on family. Sustainability As we build the La-Z-Boy of tomorrow, our goal is to make the world a better place through the transformational power of comfort.
We are not afraid to try new things, we are relentless in our mission to understand our business and consumers, and we honor our almost 100-year legacy that was built on family.
To the extent that we experience changes in our cost of materials and parts, we may adjust our selling prices or assess material surcharges, accordingly. However, in the event of rising costs, increases in selling prices or implementation of surcharges may not fully mitigate the impact of raw material cost increases, which could adversely impact operating profits.
However, in the event of rising costs, increases in selling prices or implementation of surcharges may not fully mitigate the impact of raw material cost increases, which could adversely impact operating profits. Finished Goods Imports Imported finished goods represented 6% of our consolidated sales in fiscal 2025 and 2024.
For our casegoods business within our Wholesale segment, we import wood furniture from Asian vendors, resulting in long lead times on these products. To address these long lead times and meet our customers' delivery requirements, we typically maintain higher levels of finished goods inventory in our warehouses, as a percentage of sales, of our casegoods products than our upholstery products.
To address these long lead times and meet our customers' delivery requirements, we typically 6 Table of Contents maintain higher levels of finished goods inventory in our warehouses, as a percentage of sales, of our casegoods products than our upholstery products. Our company-owned La-Z-Boy Furniture Galleries ® stores have finished goods inventory at the stores for display purposes.
In fiscal 2025, the La-Z-Boy Furniture Galleries ® store network further plans to open 12 to 15 stores and relocate or remodel 25 to 35 stores, all of which will feature our latest store designs. Additionally, during fiscal 2025 we plan to open or update approximately 100 La-Z-Boy Comfort Studio ® locations as well as 40 branded space locations.
During fiscal 2025 the La-Z-Boy Furniture Galleries ® store network opened 15 new stores and relocated or remodeled 29 stores. In fiscal 2026, the La-Z-Boy Furniture Galleries ® store network further plans to open 13 to 18 stores and relocate or remodel 20 to 25 stores, all of which will feature our latest store designs.
It also allows dealers in this proprietary group to take advantage of best practices, with which other proprietary dealers have succeeded, and we facilitate forums for these dealers to share them. These La-Z-Boy Furniture Galleries ® stores provide our consumers a full-service shopping experience with a large variety of products, knowledgeable sales associates, and design service consultants.
It also allows dealers in this proprietary group to take advantage of best practices, with which other proprietary dealers have succeeded, and we facilitate forums for these dealers to share them.
Our inventory decreased $13.0 million as of year end fiscal 2024 compared with year end fiscal 2023 as we continue to stabilize inventory levels and align production with incoming order trends. We actively manage our inventory levels on an ongoing basis to ensure they are appropriate relative to our sales volume, while maintaining our focus on service to our customers.
Our inventory decreased $8.0 million as of year end fiscal 2025 compared with year end fiscal 2024 as we continue to stabilize inventory levels and align production with incoming order trends.
From supporting our employees’ careers and providing a safe and ethical work environment to giving back to the communities where we live and work, people are always at the heart of our brand. Compliance and Ethics La-Z-Boy is dedicated to upholding the highest ethical standards and working with honesty and integrity in all aspects of our business operations.
The sustainable culture we are building is designed to empower employees to do what is right in the workplace and in our communities. From supporting our employees’ careers and providing a safe and ethical work environment to giving back to the communities where we live and work, people are always at the heart of our brand.
We consider this dedicated space to be "proprietary." For our Wholesale segment, our fiscal 2024 customer mix based on sales was approximately 60% proprietary, 10% major dealers (large, regional retailers), and 30% other independent retailers. The success of our product distribution model relies heavily on having retail floor space that is dedicated to displaying and marketing our products.
We consider this dedicated space to be "proprietary." In addition, we display a curated selection of La-Z-Boy branded products within larger independent dealers, designated as La-Z-Boy branded spaces. For our Wholesale segment, our fiscal 2025 customer mix based on sales was approximately 60% proprietary, 10% major dealers (large, regional retailers), and 30% other independent retailers.
The La-Z-Boy Furniture Galleries ® stores operate in the retail furniture industry in the United States and Canada, and different stores have different competitors based on their geographic locations. In addition, alternative distribution channels have increasingly affected our retail markets.
Additionally, our wholesale business faces increased market pressures from foreign manufacturers entering the United States market and increased direct purchases from foreign suppliers by large United States retailers. The La-Z-Boy Furniture Galleries ® stores operate in the retail furniture industry in the United States and Canada, and different stores have different competitors based on their geographic locations.
We anticipate our backlog will remain relatively stable in fiscal 2025. 7 Table of Contents Competitive Conditions We are one of the largest manufacturer/distributors of residential (living and family room, bedroom, and dining room) furniture in the United States, as measured by annual sales volume.
Competitive Conditions We are one of the largest manufacturer/distributors of residential (living and family room, bedroom, and dining room) furniture in the United States, as measured by annual sales volume. The home furnishings industry competes primarily on the basis of product styling and quality, comfort, customer service (product availability and delivery), price, and location.
At La-Z-Boy, we support our employees so they can make courageous choices and help our business thrive. Our people practices are linked to our sustainability initiatives. The sustainable culture we are building is designed to empower employees to do what is right in the workplace and in our communities.
Leading through compassion by focusing on stakeholder collaboration and employee well-being, awareness, and competence. At La-Z-Boy Incorporated, we support our employees so they can make courageous choices and help our business thrive. Our people practices are linked to our sustainability initiatives.
We monitor our customers' accounts, limit our credit exposure to certain independent dealers and strive to decrease our days' sales outstanding where possible. Accounts Payable: Our accounts payable decreased $11.0 million as of year end fiscal 2024 compared with year end fiscal 2023, primarily reflecting lower inventory purchases.
Additionally, our allowance for receivable credit losses at the end of fiscal 2025 was relatively flat compared with the end of fiscal 2024. We monitor our customers' accounts, limit our credit exposure to certain independent dealers, and strive to decrease our days' sales outstanding.
We provide more information about those dealers under "Customers." We hold a number of United States and foreign patents that we actively enforce. We have followed a policy of filing patent applications for the United States and select foreign countries on inventions, designs and improvements that we deem valuable, but these patents do expire at various times.
We provide more information about those dealers under "Customers." We hold a number of United States and foreign patents that we actively enforce.
Our Code of Conduct provides a clear and thorough ethics standard for all employees, officers, and directors with respect to interactions with customers, vendors, and other staff. Employees also undergo annual training on ethics and the Code of Conduct. We also maintain an Ethics Hotline to make it easy for employees and suppliers to report any concerns.
Employees also undergo annual 9 Table of Contents training on ethics and the Code of Conduct. We also maintain an Ethics Hotline to make it easy for employees and suppliers to report any concerns. This line is available 24 hours a day and is operated by a third-party.
The home furnishings industry competes primarily on the basis of product styling and quality, comfort, customer service (product availability and delivery), price, and location. We compete by emphasizing our brand and the comfort, quality, styling, customization, value of our products, and our available design services.
We compete by emphasizing our brand and the comfort, quality, styling, customization, value of our products, and our available design services. In addition, we remain committed to innovation while striving to provide outstanding customer service, exceptional dealer support, and efficient on-time delivery.
This line is available 24 hours a day and is operated by a third-party. Reports are taken by trained professionals and promptly forwarded to our Corporate Compliance team. Employees may also communicate any concerns through a dedicated online portal.
Reports are taken by trained professionals and promptly forwarded to our Corporate Compliance team. Employees may also communicate any concerns through a dedicated online portal. Culture of Belonging At the heart of our workplace is a Culture of Belonging - a commitment to ensure that every employee feels valued, heard, and empowered to bring their full selves to work.
In addition, we remain committed to innovation while striving to provide outstanding customer service, exceptional dealer support, and efficient on-time delivery. Maintaining, updating, and expanding our proprietary distribution system, including identifying desirable retail locations, is a key strategic initiative for us in striving to remain competitive.
Maintaining, updating, and expanding our proprietary distribution system, including identifying desirable retail locations, is a key strategic initiative for us in striving to remain competitive. We compete in the mid to upper-mid price point, and a shift in consumer taste and trends to lower-priced products could negatively affect our competitive position.
Although digital retailers operate with lower overhead costs than a brick-and-mortar retailer, customer acquisition costs and advertising spend are typically much higher. Department stores and big box retailers with an online presence also offer products that compete with some of our product lines.
The increased ability of consumers to purchase furniture through various furniture manufacturers' and digital-only retailers' internet websites has also increased competition in the industry. Although digital retailers operate with lower overhead costs than a brick-and-mortar retailer, customer acquisition costs and advertising spend are typically much higher.
The decrease in headcount was primarily due to the initiative to drive improved efficiencies through optimized staffing levels at our Mexico operations. As of the end of fiscal 2024 we employed approximately 7,800 employees in our Wholesale segment, 1,600 in our Retail segment, 500 in our Joybird business, with the remaining employees being corporate personnel.
As of the end of fiscal 2025 we employed approximately 8,000 employees in our Wholesale segment, 1,800 in our Retail segment, 500 in our Joybird business, with the remaining employees being corporate personnel. We employ the majority of our employees on a full-time basis. Purpose and Values At La-Z-Boy Incorporated, we believe in the transformational power of comfort.
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We consider this dedicated space to be "proprietary." ◦ La-Z-Boy Furniture Galleries ® stores help consumers furnish their homes by combining the style, comfort, and quality of La-Z-Boy furniture with our available design services.
Added
To the extent that we experience changes in our cost of materials and parts, we may explore alternative sourcing, adjust our selling prices or assess material surcharges, or take other actions, accordingly.
Removed
During fiscal 2024, the cost of materials and parts used for manufacturing moderated and began to stabilize relative to the volatility experienced in prior years as a result of the supply chain disruptions created by the COVID-19 pandemic.
Added
In fiscal 2026, while we expect ocean freight to stabilize and be relatively consistent with fiscal 2025, we anticipate higher overall product costs as a result of geopolitical uncertainties around trade policy and tariffs. 5 Table of Contents Tariff Exposure In fiscal 2025, approximately 90% of the upholstered units sold in North America were produced in the United States.
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Finished Goods Imports Imported finished goods represented 6% and 7% of our consolidated sales in fiscal 2024 and 2023, respectively. In fiscal 2024, we purchased approximately 75% of this imported product from six suppliers based in Vietnam.
Added
Of the remainder, most were produced in Mexico and were originating under the United States-Mexico-Canada Agreement ("USMCA"). This has been our supply chain design throughout history to support our businesses by offering customized products to consumers in a short time period. These supply chain operations allow us to mitigate the impact of tariffs on imported goods.
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In fiscal 2025, while we anticipate our product costs will be relatively flat overall, we expect slight increases in ocean freight costs due to continued container transit challenges in these global shipping routes.
Added
While a significant portion of our raw cover is sourced from China, it is primarily imported directly into Mexico where it is converted and substantially transformed under the USMCA rules of origin. The vast majority of the products produced and exported out of Mexico are USMCA compliant.
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We therefore do not believe that this is an indicator that our seasonal trends are changing for our retail businesses and anticipate typical seasonality for both our wholesale and retail businesses in fiscal 2025.
Added
While we remain subject to tariffs on Chinese products directly imported into the United States, the exposure to our cost of goods in fiscal 2025 was minimal.
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Accounts Receivable: Our accounts receivable increased $13.7 million as of year end fiscal 2024 compared with year end fiscal 2023, primarily reflecting higher sales from our Wholesale business to external dealers during the fourth quarter of fiscal 2024 compared with same period a year ago. 6 Table of Contents Additionally, our allowance for receivable credit losses was $0.3 million higher at the end of fiscal 2024 compared with the end of fiscal 2023 reflecting a higher receivable balance.
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With regards to our imported finished goods, while the vast majority of our imported casegoods product is sourced directly from Vietnam, given the size of this business relative to the entire Company, the exposure to our cost of goods in fiscal 2025 was also minimal.
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We continue to maintain and update our current stores to improve the quality of the network. During fiscal 2024 the La-Z-Boy Furniture Galleries ® store network opened 8 new stores and relocated or remodeled 19 stores.
Added
We continue to monitor changes to global trade policies, remaining agile with the ability to shift our sourcing and production, adjust our selling prices or assess material surcharges, or take other actions, as necessary.
Removed
This represents a 10% decrease from a fiscal 2023 year end backlog of $151.3 million, which was revised to reflect an adjustment to the dollar impact of cancellations that occurred during fiscal 2023.
Added
Also driven by the seasonal slowdown in the summer, each of our retail businesses typically experience their lowest sales in our fiscal first quarter.
Removed
At the end of fiscal 2023, backlog and lead times had generally returned to pre-pandemic levels and the slight decrease in fiscal 2024 was mainly due to shipments outpacing incoming orders as a result of lower industry-wide demand.
Added
For our casegoods business within our Wholesale segment, we import wood furniture from Asian vendors, resulting in long lead times on these products.
Removed
We compete in the mid to upper-mid price point, and a shift in consumer taste and trends to lower-priced products could negatively affect our competitive position. Additionally, our wholesale business faces increased market pressures from foreign manufacturers entering the United States market and increased direct purchases from foreign suppliers by large United States retailers.
Added
We actively manage our inventory levels on an ongoing basis to ensure they are appropriate relative to our sales volume, supporting our focus on comfortable custom furniture with quick speed to delivery. Accounts Receivable: Our accounts receivable increased $0.3 million as of year end fiscal 2025 compared with year end fiscal 2024, primarily reflecting higher sales to our wholesale customers.
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Aligned with our core values, we embrace curiosity for sustainable design, operate with compassion for a sustainable planet, and empower courage for a sustainable culture. Sustainable Design . We embrace curiosity and our inquisitiveness helps us identify innovative opportunities for our products that uphold our commitment to quality, rely on sustainable materials and drive best practices in our supplier partnerships.
Added
Customer deposits decreased $15.9 million as of fiscal year end 2025 compared with fiscal year end 2024, primarily due to a reduction in backlog resulting from improved delivery lead times driven by continued operational efficiencies in our manufacturing and distribution processes.
Removed
Sustainable Planet . We strive to operate La-Z-Boy with compassion for the environment. We are committed to responsible stewardship and integrate environmentally sound and sustainable practices into our daily decisions. We work to reduce emissions, increase recycling efforts, and conserve water in all areas of our business. Sustainable Culture .
Added
The success of our product distribution model relies heavily on having retail floor space that is dedicated to displaying and marketing our products. Maintaining, updating, and, when appropriate, expanding our proprietary distribution network is a key part of our overall sales and marketing strategy.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Macroeconomic, Market and Strategic Risk Factors Declines in certain economic and market conditions that impact consumer confidence and consumer spending, or cause further disruption in our business, could negatively impact our sales, results of operations and liquidity.
Macroeconomic and Market Risk Factors Declines in certain economic and market conditions that impact consumer confidence and consumer spending, or cause further disruption in our business, could negatively impact our sales, results of operations and liquidity.
Similarly, adverse weather (including increased risk of catastrophic events as a result of climate change), natural or man-made disasters, public health crises (such as pandemics or 13 Table of Contents epidemics), labor disputes, possible acts of terrorism, port and canal blockages and congestion, and availability of shipping containers have and could in the future result in delays in shipments or the absence of required raw materials or components from any of our suppliers.
Similarly, adverse weather (including increased risk of catastrophic events as a result of climate change), natural or man-made disasters, public health crises (such as pandemics or epidemics), labor disputes, possible acts of terrorism, port and canal blockages and congestion, and availability of shipping containers have and could in the future result in delays in shipments or the absence of required raw materials or components from any of our suppliers.
The tariffs, along with any additional tariffs or retaliatory trade restrictions implemented by other countries, could negatively impact customer sales, including potential delays in product received from our vendors, our cost of goods sold and results of operations.
The tariffs, along with any additional tariffs or retaliatory trade restrictions implemented by the United States or other countries, could negatively impact customer sales, including potential delays in product received from our vendors, our cost of goods sold and results of operations.
In the event that we draw on our credit facility, outstanding amounts may become immediately due and payable upon certain events of default, including a failure to comply with the financial covenants in the credit agreement—a consolidated net lease adjusted leverage ratio requirement and a consolidated fixed-charge coverage ratio requirement—or with certain other affirmative and negative covenants in the credit agreement.
In the event that we draw on our credit facility, outstanding amounts may become immediately due and payable upon certain events of default, including a failure to comply with the financial covenants in the credit agreement—a consolidated net lease 14 Table of Contents adjusted leverage ratio requirement and a consolidated fixed-charge coverage ratio requirement—or with certain other affirmative and negative covenants in the credit agreement.
Factors influencing consumer spending include, among others, general economic conditions, consumer disposable income, recession and fears of recession, United States government default or shutdown or the risk of such default or shutdown, inflation, unemployment, war and fears of war, availability of consumer credit, consumer debt levels, consumer confidence, conditions in the housing market, fuel prices, interest rates, sales tax rates, civil disturbances and terrorist activities, natural disasters, adverse weather, and health epidemics or pandemics.
Factors influencing consumer spending include, among others, general economic conditions, consumer disposable income, recession and fears of recession, United States government default or shutdown or the risk of such default or shutdown, inflation, unemployment, war and fears of war, changes in global trade policies, availability of consumer credit, consumer debt levels, consumer confidence, conditions in the housing market, fuel prices, interest rates, sales tax rates, civil disturbances and terrorist activities, natural disasters, adverse weather, and health epidemics or pandemics.
Competitive and marketing pressures may prevent us from passing along price increases to our customers, and the inability to meet our customers' demands could cause us to lose sales. Further, most of our polyurethane foam comes from three suppliers.
Competitive and marketing pressures may prevent us from passing along price increases to our customers, and the inability to meet our customers' demands could cause us to lose sales. 13 Table of Contents Further, most of our polyurethane foam comes from three suppliers.
Financial Risk Factors Our current retail markets and other markets that we may enter in the future may not achieve the growth and profitability we anticipate. We could incur charges for the impairment of long-lived assets, goodwill, or other intangible assets if we fail to meet our earnings expectations for these markets.
Financial and Strategic Risk Factors Our current retail markets and other markets that we may enter in the future may not achieve the growth and profitability we anticipate. We have incurred, and may incur in the future, charges for the impairment of long-lived assets, goodwill, or other intangible assets if we fail to meet our earnings expectations for these markets.
Legal and Regulatory Risk Factors Our business and our reputation could be adversely affected by the failure to comply with or the cost of compliance with evolving regulations relating to our obligation to protect sensitive employee, customer, consumer, vendor or Company data.
Our business and our reputation could be adversely affected by the failure to comply with or the cost of compliance with evolving regulations relating to our obligation to protect sensitive employee, customer, consumer, vendor or Company data.
During fiscal 2024, we were subject, and in the future, we will likely continue to be subject, to attempts to breach the security of our networks and IT infrastructure through cyber-attack, malware, ransomware, computer viruses, phishing attempts, social engineering and other means of unauthorized access.
During fiscal 2025, we were subject, and in the future, we will likely continue to be subject, to attempts to breach the security of our networks and IT infrastructure. Such attempts may involve cyber-attack, malware, ransomware, computer viruses, phishing attempts, social engineering and other means of unauthorized access.
Although we continue to implement strong physical and cybersecurity measures to ensure that our business operations remain functional and to ensure uninterrupted service to our 12 Table of Contents customers, our systems and our operations remain vulnerable to cyberattacks and other disruptions due to the fact that a portion of our employees work remotely and we cannot be certain that our mitigation efforts will be effective.
Although we continue to implement strong physical and cybersecurity measures to ensure that our business operations remain functional and to ensure uninterrupted service to our customers, our systems and our operations remain vulnerable to cyberattacks and other disruptions due to the fact that a portion of our employees work remotely and we cannot be certain that our mitigation efforts will be effective. 12 Table of Contents We rely extensively on information technology systems to process transactions, summarize results, and manage our business and that of certain independent dealers.
As a result, our reputation and brand, which are critical to our business operations, may be harmed, we could incur substantial costs, including costs related to litigation, or we could lose both customers and revenue. Changes in the domestic or international regulatory environment or trade policies could adversely affect our business and results of operations.
As a result, our reputation and brand, which are critical to our business operations, may be harmed, we could incur substantial costs, including costs related to litigation, or we could lose both customers and revenue. Changes in regulation of our international operations, including anti-corruption laws and regulations, could adversely affect our business and results of operations.
In addition, due to the large number of competitors and their wide range of product offerings, we may not be able to differentiate our products (through styling, finish, and other construction techniques) from those of our competitors.
Changes in pricing and promotional activities of competitors may adversely affect our performance. In addition, due to the large number of competitors and their wide range of product offerings, we may not be able to 11 Table of Contents differentiate our products (through styling, finish, and other construction techniques) from those of our competitors.
During the COVID-19 pandemic, like many businesses, we experienced significant disruption in our supply chain resulting in unprecedented increases in material and freight costs, as well as significant unavailability or delay of parts or finished goods.
From time to time, like many businesses, we have experienced significant disruption in our supply chain as a result of external factors, such as the COVID-19 pandemic, resulting in unprecedented increases in material, freight and transportation costs, as well as significant unavailability or delay of parts or finished goods.
Such fluctuations have increased, and could continue to increase, our cost and therefore decrease our earnings. In manufacturing furniture, we use various types of wood, fabrics, leathers, upholstered filling material, including polyurethane foam, steel, other raw materials, and metal components. Additionally, our manufacturing processes and plant operations use various electrical equipment and components and tooling.
In manufacturing furniture, we use various types of wood, fabrics, leathers, upholstered filling material, including polyurethane foam, steel, other raw materials, and metal components. Additionally, our manufacturing processes and plant operations use various electrical equipment and components and tooling.
Actual results could differ materially from our estimates, and such differences may impact our financial results. 16 Table of Contents We may not be able to recruit and retain key employees and skilled workers in a competitive labor market or we could experience continued increases in labor costs, which could adversely affect our business and results of operations.
We may not be able to recruit and retain key employees and skilled workers in a competitive labor market or we could experience continued increases in labor costs, which could adversely affect our business and results of operations.
If a major event with negative economic effects were to occur, and such effects have occurred in the past, we may not be able to collect amounts owed to us or such payment may only occur after significant delay. While we perform credit evaluations of our customers, those evaluations may not prevent uncollectible trade accounts receivable.
Some of our customers have experienced, and may in the future experience, cash flow and credit-related issues. If a major event with negative economic effects were to occur, and such effects have occurred in the past, we may not be able to collect amounts owed to us or such payment may only occur after significant delay.
Changes in laws and regulations in the United States or internationally may require us to modify our current business practices or otherwise increase our costs of compliance, which could adversely affect our results of operations.
Changes in laws and regulations in the United States or internationally may require us to modify our current business practices or otherwise increase our costs of compliance, which could adversely affect our results of operations. We are subject to risks from changes to the trade policies, including tariff and import/export regulations, by the United States or other foreign governments.
Finally, our business, 15 Table of Contents including our sales and margins, could be adversely affected by the imposition in Mexico, the United Kingdom or other foreign countries of import bans, quotas, and increases in tariffs. Changes in regulation of our international operations, including anti-corruption laws and regulations, could adversely affect our business and results of operations.
Finally, our business, including our sales and margins, could be adversely affected by the imposition in Canada, Mexico, the United Kingdom or other foreign countries of import bans, quotas, and increases in tariffs.
Future significant disruptions of this nature in our supply chain, in the furniture industry, within our independent dealer network or third-party wholesalers, or other unusual developments could cause significant disruption to our business and negatively affect our results. 11 Table of Contents Loss of market share and other financial or operational difficulties due to competition would likely result in a decrease in our sales, earnings, and liquidity.
Future significant disruptions of this nature in our supply chain, in the furniture industry, within our independent dealer network or among our third-party wholesalers, or other unusual developments could cause significant disruption to our business and negatively affect our results.
Changes in business conditions or other events could materially change the projection of future cash flows or the discount rate we used in the fair value calculation of the goodwill.
Changes in business conditions or other events could materially change the projection of future cash flows or the discount rate we used in the fair value calculation for goodwill impairment tests. Actual results could differ materially from our estimates, and such differences may impact our financial results.
Changes in tax policies could adversely affect our business and results of operations. Changes in United States or international income tax laws and regulations may have an adverse effect on our business in the future. We are subject to income taxes in the United States and numerous foreign jurisdictions.
As a result, product liability and other claims could have a material adverse effect on our business, results of operations and financial condition. Changes in tax policies could adversely affect our business and results of operations. Changes in United States or international income tax laws and regulations may have an adverse effect on our business in the future.
The residential furniture industry is highly competitive and fragmented. We currently compete with many other manufacturers and retailers, including online retailers. Some of these competitors offer widely advertised products or are large retail furniture dealers offering their own store-branded products.
We currently compete with many other manufacturers and retailers, including online retailers. Some of these competitors offer widely advertised products or are large retail furniture dealers offering their own store-branded products. Competition in the residential furniture industry is based on, among other factors, quality, style of products, perceived value, price, promotional activities, customer service and experience, omnichannel presence, and advertising.
In addition, we are involved in lawsuits, claims and proceedings incident to the ordinary course of our business. Litigation is inherently unpredictable. Any claims against us, whether meritorious or not, could result in costly litigation that could adversely affect our business and results of operations.
In addition, we are involved in lawsuits, claims and proceedings incident to the ordinary course of our business. Litigation is inherently unpredictable.
If we are unable to access additional credit at the levels we require, or the cost of credit is greater than expected, it could adversely affect our results of operations or financial condition. 14 Table of Contents Due to the nature of our business and our payment terms, we may not be able to collect amounts owed to us by customers, which may adversely affect our sales, earnings, financial condition, and liquidity.
If we are unable to access additional credit at the levels we require, or the cost of credit is greater than expected, it could adversely affect our results of operations or financial condition.
If these efforts are unsuccessful or require us to incur substantial costs, our business, results of operations and financial or competitive condition could be adversely affected. Fluctuations in the price, availability and quality of raw materials could cause delays that could result in our inability to timely provide goods to our customers.
If these efforts are unsuccessful or require us to incur substantial costs, our business, results of operations and financial or competitive condition could be adversely affected. Significant disruptions in our supply chain could negatively affect our business and results of operations.
We rely extensively on information technology systems to process transactions, summarize results, and manage our business and that of certain independent dealers. Disruptions in both our primary and back-up systems could adversely affect our business and results of operations.
Disruptions in both our primary and back-up systems could adversely affect our business and results of operations.
We regularly assess these matters to determine the adequacy of our tax provision, which is subject to significant judgement. Our strategy, goals and disclosures related to Environmental, Social, and Governance ("ESG") matters expose us to numerous risks, including risks to our reputation and stock price.
We regularly assess these matters to determine the adequacy of our tax provision, which is subject to significant judgement.
Although we maintain liability insurance in amounts that we believe are reasonable, in most cases, we are responsible for large, self-insured retentions and defense costs.
Any claims against us, whether meritorious or not, could result in costly litigation that could adversely affect our business and results of operations. 16 Table of Contents Although we maintain liability insurance in amounts that we believe are reasonable, in most cases, we are responsible for large, self-insured retentions and defense costs.
The United States has enacted certain tariffs on many items sourced from China, including certain furniture, accessories, furniture parts, and raw materials which are imported into the United States and that we use in our domestic operations.
As a result, we are subject to risks relating to changes in the domestic or international regulatory environment or trade policies, including new or increased duties, tariffs, retaliatory tariffs, trade limitations, and termination or renegotiation of bilateral and multilateral trade agreements impacting our business. 15 Table of Contents The United States has enacted certain tariffs on many items sourced from China, including certain furniture, accessories, furniture parts, and raw materials that are imported into the United States and that we use in our domestic operations.
Credit evaluations involve significant management diligence and judgment, especially in the current environment.
While we perform credit evaluations of our customers, those evaluations may not prevent uncollectible trade accounts receivable. Credit evaluations involve significant management diligence and judgment, especially in the current environment.
We are unable to identify and predict to what extent such factors may further impact consumer spending on our products in the short and long term.
We are unable to identify and predict to what extent such factors may further impact consumer spending on our products in the short and long term. Loss of market share and other financial or operational difficulties due to competition would likely result in a decrease in our sales, earnings, and liquidity. The residential furniture industry is highly competitive and fragmented.
Because we manufacture components and finished goods in Mexico and the United Kingdom, purchase components and finished goods manufactured in foreign countries, including China and Vietnam, participate in consolidated joint ventures in Thailand, and operate a wholesale and retail business in Canada, we are subject to risks relating to changes in the domestic or international regulatory environment or trade policies, including new or increased duties, tariffs, retaliatory tariffs, trade limitations and termination or renegotiation of bilateral and multilateral trade agreements impacting our business.
We manufacture components and finished goods in the United States, Mexico and the United Kingdom; source raw materials domestically and from foreign countries; purchase components and finished goods manufactured in foreign countries, including China and Vietnam; participate in consolidated joint ventures in Thailand; and operate a wholesale and retail business in Canada.
We grant payment terms to most wholesale customers ranging from 15 to 60 days. Some of our customers have experienced, and may in the future experience, cash flow and credit-related issues.
Due to the nature of our business and our payment terms, we may not be able to collect amounts owed to us by customers, which may adversely affect our sales, earnings, financial condition, and liquidity. We grant payment terms to most wholesale customers ranging from 15 to 60 days.
Removed
Competition in the residential furniture industry is based on, among other factors, quality, style of products, perceived value, price, promotional activities, service to the customer, and advertising. Changes in pricing and promotional activities of competitors may adversely affect our performance.
Added
Additionally, because techniques used to obtain unauthorized access to systems and networks are increasingly sophisticated and constantly evolving, we may not be able to anticipate, detect, or prevent all attacks until after they have already been launched. For example, as artificial intelligence continues to evolve, cyber-attackers could also use artificial intelligence to develop malicious code and sophisticated phishing attempts.
Removed
Despite widespread recognition of the cyber-attack threat and improved data protection methods, cyber-attacks on organizations continue to be sophisticated, persistent, and ever-changing, making it difficult to prevent and detect these attacks.
Added
Fluctuations in the price, availability and quality of raw materials could cause delays that could result in our inability to timely provide goods to our customers. Such fluctuations have increased, and could continue to increase, our cost and therefore decrease our earnings.
Removed
If we do not meet our sales or earnings expectations for these operations, we may incur charges for the impairment of goodwill or the impairment of our intangible assets.
Added
During fiscal 2025 we fully impaired the goodwill and intangible asset related to our businesses in the United Kingdom and therefore the risk of future impairment is minimal. Refer to Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" for additional information on the impairments.
Removed
As a result, product liability and other claims could have a material adverse effect on our business, results of operations and financial condition.
Added
We may be unsuccessful in identifying attractive acquisition opportunities or, to the extent that we pursue attractive acquisition opportunities, we may be unsuccessful in completing or realizing the expected benefits of such acquisitions. From time to time, we may acquire independent La-Z-Boy Furniture Galleries ® stores or other retail businesses or pursue other growth opportunities through strategic acquisitions.
Removed
There has been increased focus from our stakeholders, including consumers, employees, and investors, on our ESG practices. We have established goals and other objectives related to ESG matters. These goals reflect our current plans and are not guarantees that we will be able to achieve them.
Added
We have completed several such acquisitions in recent years. If we choose to acquire businesses in the future, there can be no assurance that we will be able to find suitable businesses to purchase, acquire such businesses on acceptable terms, or realize the benefits of any acquisition we pursue.
Removed
Our efforts to accomplish and accurately report on these goals and objectives present numerous operational, reputational, financial, legal, and other risks, any of which could have a material negative impact, including on our reputation, stock price, and results of operation.
Added
The success of any completed acquisition will depend on our ability to effectively integrate and manage the business after the acquisition. The identification of suitable acquisition or strategic investment candidates, as well as the management and integration of any acquired businesses, can be costly and time-consuming and can distract our leadership team from our current operations.
Removed
We could also incur additional costs and require additional resources to implement various ESG practices to make progress against our public goals and to monitor and track our performance with respect to such goals. The standards for tracking and reporting on ESG matters are relatively new and continue to evolve.
Added
Legal, Tax and Regulatory Risk Factors Changes in the domestic or international regulatory environment could adversely affect our business and results of operations.
Removed
Collecting, measuring, and reporting ESG information and metrics can be difficult and time consuming. Our selected disclosure framework or standards may need to be changed from time to time, which may result in a lack of consistent or meaningful comparative data from period to period.
Added
Changes in trade policy, including trade restrictions, new or increased tariffs or quotas, embargoes, sanctions and countersanctions, safeguards or customs restrictions by the U.S. and/or other foreign governments could have a material adverse impact on our business.
Removed
In addition, our interpretation of reporting frameworks or standards may differ from those of others and such frameworks or standards may change over time, any of which could result in significant revisions to our goals or reported progress in achieving such goals.
Added
The imposition of new tariffs or increases in existing tariffs on products imported from countries where we or our suppliers operate could result in increased costs for raw materials and finished goods. These cost increases may reduce our margins, require us to raise prices, or make our products less competitive in the marketplace.
Removed
Our ability to achieve any ESG-related goal or objective is subject to numerous risks, many of which are outside of our control, including: the availability and cost of low-or non-carbon-based energy sources and technologies, evolving regulatory requirements affecting ESG standards or disclosures, the availability of vendors and suppliers that can meet our sustainability, diversity and other standards, and the availability of raw materials that meet and further our sustainability goals.
Added
In addition, other countries may change their business and trade policies in anticipation of or in response to increased import tariffs and other changes in trade policy and regulations already enacted or that may be enacted in the future.
Removed
If our ESG practices do not meet evolving consumer, employee, investor or other stakeholder expectations and standards or our publicly-stated goals, then our reputation, our ability to attract or retain employees and our competitiveness, including as an investment and business partner, could be negatively impacted.
Added
If we are unable to mitigate these risks through supply chain adjustments, pricing strategies, or other measures, our financial performance and growth prospects could be negatively affected.
Removed
Furthermore, if our competitors’ ESG performance is perceived to be better than ours, potential or current customers and investors may elect to do business with our competitors instead, and our ability to attract or retain employees could be negatively impacted.
Added
We are subject to income taxes in the United States and numerous foreign jurisdictions.
Removed
Our failure, or perceived failure, to pursue or fulfill our goals, targets, and objectives or to satisfy various reporting standards within the timelines we announce, or at all, could also expose us to government enforcement actions and private litigation.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Each of the business and functional leaders responsible for the management of these identified risks also regularly discuss with the Board changes in assessment of these risks and mitigation plans. The Company (or third parties it relies on) may not be able to fully, continuously, and effectively implement security controls as intended.
Each of the business and functional leaders responsible for the management of these identified risks also regularly discusses with the Board changes in assessment of these risks and mitigation plans. The Company (or third parties it relies on) may not be able to fully, continuously, and effectively implement security controls as intended.
The risk assessment along with risk-based analysis and judgment are used to select security controls to address risks. During this process, the following factors, among others, are considered: likelihood and severity of 17 Table of Contents risk, impact on the Company and others if a risk materializes, feasibility and cost of controls, and impact of controls on operations and others.
The risk assessment along with risk-based analysis and judgment are used to select security controls to address risks. During this process, the following factors, among others, are considered: likelihood and severity of risk, impact on the Company and others if a risk materializes, feasibility and cost of controls, and impact of controls on the Company's operations and others.
Third-party security firms are used by the Company in different capacities to provide or operate some of these controls and technology systems. Third parties are also used to conduct assessments, such as vulnerability scans and penetration testing of the Company and its systems.
We incorporate third-party expertise in various aspects of our cybersecurity program. One or more third-party security firms are used by the Company in different capacities to provide or operate some of these controls and technology systems. Third parties are also used to conduct assessments, such as vulnerability scans and penetration testing of the Company and its systems.
The Company uses a variety of processes to address cybersecurity threats related to the use of third-party technology and services. The Company has a written incident response plan ("IRP") and conducts tabletop exercises to enhance incident response preparedness. Business continuity and disaster recovery plans are used to prepare for the potential for a disruption in technology we rely on.
The Company uses a variety of processes to address cybersecurity threats related to the use of third-party technology and services. The Company has a written incident response plan ("IRP") and conducts annual tabletop exercises to enhance incident response preparedness.
The Company is a member of an industry cybersecurity intelligence and risk sharing organization. Certain employees, including those with access to Company-provided e-mail accounts, undergo security awareness training when hired and annually.
Business continuity and disaster recovery plans are used to prepare for the potential for a disruption in the technology we rely on. The Company is a member of an industry cybersecurity intelligence and risk sharing organization. Certain employees, including those with access to Company-provided e-mail accounts, undergo security awareness training when hired and at least annually thereafter.

Item 2. Properties

Properties — owned and leased real estate

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Properties owned or leased at April 27, 2024 by segment: (Amounts in millions) Square Feet Wholesale 9.2 Retail 3.8 Corporate and Other 0.6 Active manufacturing, warehousing and distribution centers, office, showroom and retail facilities 13.6 Idle facilities 0.1 Total property 13.7 Our active facilities and retail locations are located across the United States and in Mexico, Thailand, Canada, China, Hong Kong, and the United Kingdom.
ITEM 2. PROPERTIES. Properties owned or leased at April 26, 2025 by segment: (Amounts in millions) Square Feet Wholesale 8.6 Retail 3.9 Corporate and Other 0.5 Total property 13.0 Our active facilities and retail locations are located across the United States and in Mexico, Thailand, Canada, China, Hong Kong, and the United Kingdom.
We lease the majority of our retail stores and showrooms, warehouses and distribution centers, certain office space and our manufacturing facilities in Mexico and the United Kingdom. For information on operating lease terms for our properties, refer to Note 6, Leases, to our consolidated financial statements, which is included in Item 8, Financial Statements and Supplementary Data, of this report.
For information on operating lease terms for our properties, refer to Note 5, Leases, to our consolidated financial statements, which is included in Item 8, Financial Statements and Supplementary Data, of this report.
We own our world headquarters building in Monroe, Michigan and all of our domestic manufacturing plants with the exception of our Newton, Mississippi facility, which is leased. A joint venture in which we participate owns our Thailand plant.
We own our world headquarters building in Monroe, Michigan and all of our domestic manufacturing plants. A joint venture in which we participate owns our Thailand plant. We lease the majority of our retail stores and showrooms, warehouses and distribution centers, certain office space and our manufacturing facilities in Mexico and the United Kingdom.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Leggett, age 51 • Senior Vice President and Chief Supply Chain Officer since May 2022 • Vice President and Chief Supply Chain Officer from December 2021 to April 2022 • Vice President Global Supply Chain Operations of Dentsply Sirona Inc., a dental products and technologies manufacturer, from February 2019 to December 2021 Raphael Z.
Leggett, age 52 • Senior Vice President and Chief Supply Chain Officer since May 2022 • Vice President and Chief Supply Chain Officer from December 2021 to April 2022 • Vice President Global Supply Chain Operations of Dentsply Sirona Inc., a dental products and technologies manufacturer, from February 2019 to December 2021 Raphael Z.
Reeder, age 54 • President, Retail La-Z-Boy Furniture Galleries since April 2023 • Senior Vice President, Retail of Chico's FAS, a women's clothing and accessories retailer, from April 2018 to April 2023 Terrence J. (TJ) Linz, age 42 • President, Portfolio Brands since April 2023 • President, La-Z-Boy Retail Division from April 2019 to April 2023 Carol Y.
Reeder, age 55 • President, Retail La-Z-Boy Furniture Galleries since April 2023 • Senior Vice President, Retail of Chico's FAS, a women's clothing and accessories retailer, from April 2018 to April 2023 Terrence J. (TJ) Linz, age 43 • President, Portfolio Brands since April 2023 • President, La-Z-Boy Retail Division from April 2019 to April 2023 Carol Y.
Richmond, age 54 • Vice President, General Counsel and Chief Compliance Officer since April 2021 • Senior Director of Corporate Compliance and Employment Law from April 2019 to April 2021 Katherine E. Vanderjagt, age 42 • Vice President and Chief Human Resources Officer since December 2018 20 Table of Contents PART II
Richmond, age 55 • Vice President, General Counsel and Chief Compliance Officer since April 2021 • Senior Director of Corporate Compliance and Employment Law from April 2019 to April 2021 Katherine E. Vanderjagt, age 43 • Vice President and Chief Human Resources Officer since December 2018 20 Table of Contents PART II
Lee, age 52 • Vice President and Chief Information Officer since June 2022 • VP/CIO, Information Technology of Consolidated Hospitality Supplies, LLC, an operating supplies and equipment provider for hospitality distribution, from August 2021 to June 2022 • Senior Director, Global Digital Technology Solutions of American Hotel Register Company, a supplier brand of hospitality products and services, from July 2019 to August 2021 • Director of Application Development of American Hotel Register Company, a supplier brand of hospitality products and services, from April 2016 to July 2019 Michael A.
Lee, age 53 • Vice President and Chief Information Officer since June 2022 • Vice President/Chief Information Officer, Information Technology of Consolidated Hospitality Supplies, LLC, an operating supplies and equipment provider for hospitality distribution, from August 2021 to June 2022 • Senior Director, Global Digital Technology Solutions of American Hotel Register Company, a supplier brand of hospitality products and services, from July 2019 to August 2021 Michael A.
Lucian, age 61 • Senior Vice President and Chief Financial Officer since April 2021 • Vice President, Finance from January 2019 to April 2021 Robert Sundy, age 48 • President, La-Z-Boy Brand and Chief Commercial Officer since April 2023 • Senior Vice President and Chief Commercial Officer from January 2021 to April 2023 • Head of Brand Marketing, Licensing and Creative Studios – North American Region of Whirlpool Corporation, a manufacturer and marketer of home appliances, from April 2016 to January 2021 Rebecca M.
Luebke, age 43 • Senior Vice President and Chief Financial Officer since January 2025 • Vice President, Finance and Treasurer from January 2023 to January 2025 • Senior Finance Director, Residential Division from January 2021 to January 2023 • Finance Director, Amazon Customer Team at The Proctor & Gamble Company, a multinational consumer goods corporation, from January 2019 to January 2021 Robert Sundy, age 49 • President, La-Z-Boy Brand and Chief Commercial Officer since April 2023 • Senior Vice President and Chief Commercial Officer from January 2021 to April 2023 • Head of Brand Marketing, Licensing and Creative Studios – North American Region of Whirlpool Corporation, a manufacturer and marketer of home appliances, from April 2016 to January 2021 Rebecca M.
Melinda D. Whittington, age 57 • President and Chief Executive Officer since April 2021 • Senior Vice President and Chief Financial Officer from June 2018 to April 2021 Robert G.
Melinda D. Whittington, age 58 • President and Chief Executive Officer since April 2021 and Board Chair since December 2024 • Senior Vice President and Chief Financial Officer from June 2018 to April 2021 Taylor E.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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A substantially greater number of holders of La-Z-Boy common stock are "street name" or beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions.
A substantially greater number of holders of La-Z-Boy Incorporated common stock are "street name" or beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions.
Performance Graph The graph below shows the cumulative total return for our last five fiscal years that would have been realized (assuming reinvestment of dividends) by an investor who invested $100 on April 27, 2019, in our shares of common stock, in the S&P 500 Composite Index, and in the Dow Jones U.S. Furnishings Index.
Performance Graph The graph below shows the cumulative total return for our last five fiscal years that would have been realized (assuming reinvestment of dividends) by an investor who invested $100 on April 25, 2020, in our shares of common stock, in the S&P 500 Composite Index, and in the Dow Jones U.S. Furnishings Index.
Recent Sales of Unregistered Securities There were no sales of unregistered securities during fiscal year 2024.
Recent Sales of Unregistered Securities There were no sales of unregistered securities during fiscal year 2025.
Shareholders Our common stock trades on the New York Stock Exchange under the trading symbol "LZB". We had approximately 1,568 registered holders of record of La-Z-Boy's common stock as of June 10, 2024.
Shareholders Our common stock trades on the New York Stock Exchange under the trading symbol "LZB". We had approximately 1,461 registered holders of record of La-Z-Boy Incorporated's common stock as of June 10, 2025.
With the operating cash flows we anticipate generating in fiscal 2025, we expect to continue repurchasing Company stock, subject to market conditions and other factors as deemed relevant by our board of directors. 21 Table of Contents The following table summarizes our repurchases of Company stock during the quarter ended April 27, 2024 and includes shares purchased from employees to satisfy their withholding tax obligations upon vesting of restricted shares: (Amounts 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 number of shares that may yet be repurchased under the plan Fiscal February (January 28 - March 2, 2024) — $ — — 6,011 Fiscal March (March 3 - March 30, 2024) 346 $ 36.79 346 5,665 Fiscal April (March 31 - April 27, 2024) 1 $ 33.54 — 5,665 Fiscal Fourth Quarter of 2024 347 346 5,665 (1) In addition to the 346,463 shares we repurchased during the quarter as part of our publicly announced, board-authorized plan described above, this column includes 911 shares we repurchased from employees to satisfy their withholding tax obligations upon vesting of restricted shares with an average share price of $34.21.
With the operating cash flows we anticipate generating in fiscal 2026, we expect to continue repurchasing Company stock, subject to market conditions and other factors as deemed relevant by our board of directors. 21 Table of Contents The following table summarizes our repurchases of Company stock during the quarter ended April 26, 2025 and includes shares purchased from employees to satisfy their withholding tax obligations upon vesting of restricted shares: (Amounts 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 number of shares that may yet be repurchased under the plan Fiscal February (January 26 - March 1, 2025) 297 $ 45.79 295 3,699 Fiscal March (March 2 - March 29, 2025) — $ — — 3,699 Fiscal April (March 30 - April 26, 2025) 1 $ 38.61 — 3,699 Fiscal Fourth Quarter of 2025 298 295 3,699 (1) In addition to the 295,646 shares we repurchased during the quarter as part of our publicly announced, board-authorized plan described above, this column includes 2,011 shares we repurchased from employees to satisfy their withholding tax obligations upon vesting of restricted shares with an average share price of $42.86.
During fiscal 2024, we spent $52.8 million to repurchase 1.6 million shares and as of April 27, 2024, 5.7 million shares remained available for repurchase pursuant to the board authorization.
During fiscal 2025, we spent $77.9 million to repurchase 2.0 million shares and as of April 26, 2025, 3.7 million shares remained available for repurchase pursuant to the board authorization.
Company/Index/Market 4/27/2019 4/25/2020 4/24/2021 4/30/2022 4/29/2023 4/27/2024 La-Z-Boy Incorporated $ 100.00 $ 66.09 $ 136.87 $ 84.77 $ 95.14 $ 112.26 S&P 500 Composite Index $ 100.00 $ 98.44 $ 147.49 $ 147.87 $ 151.80 $ 188.57 Dow Jones U.S.
Company/Index/Market 4/25/2020 4/24/2021 4/30/2022 4/29/2023 4/27/2024 4/26/2025 La-Z-Boy Incorporated $ 100.00 $ 207.10 $ 128.27 $ 143.95 $ 169.85 $ 203.90 S&P 500 Composite Index $ 100.00 $ 149.83 $ 150.21 $ 154.21 $ 191.56 $ 210.35 Dow Jones U.S.
Furnishings Index $ 100.00 $ 65.78 $ 164.79 $ 114.92 $ 113.64 $ 121.08 Purchases of Equity Securities by the Issuer and Affiliated Purchasers Our board of directors has authorized the repurchase of Company stock. We spent $12.8 million on discretionary repurchases in the fourth quarter of fiscal 2024 to repurchase 0.3 million shares.
Furnishings Index $ 100.00 $ 250.51 $ 174.70 $ 172.75 $ 184.06 $ 192.81 Purchases of Equity Securities by the Issuer and Affiliated Purchasers Our board of directors has authorized the repurchase of Company stock.
Added
Repurchases under these programs are made at management's discretion from time to time on the open market or in privately negotiated transactions and through Rule 10b5-1. We spent $13.5 million on discretionary repurchases in the fourth quarter of fiscal 2025 to repurchase 0.3 million shares.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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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 22 Table of Contents on-trend upholstered furniture, particularly in the motion and reclining categories.
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 22 Table of Contents identifying additional consumer-base growth opportunities. We leverage our consumer insights to develop and deliver on-trend upholstered furniture, particularly in the motion and reclining categories.
Corporate and Other includes the shared costs for corporate functions, including human resources, information technology, finance and legal, in addition to revenue generated through royalty agreements with companies licensed to use the La-Z-Boy ® brand name on various products.
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.
Through our Century Vision strategic plan, we have several 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 187 company-owned La-Z-Boy Furniture Galleries ® stores.
Through our Century Vision strategic plan, we have several 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 203 company-owned La-Z-Boy Furniture Galleries ® stores.
Over the last five years, as a result of opening new company-owned stores and acquiring independent La-Z-Boy Furniture Galleries ® stores, we increased our ownership percentage in this store network from 44% to 53%. • Expanding the reach of our wholesale distribution channels.
Over the last five years, as a result of opening new company-owned stores and acquiring independent La-Z-Boy Furniture Galleries ® stores, we increased our ownership percentage in this store network from 44% to 55%. • Expanding the reach of our wholesale distribution channels.
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 Furniture Galleries ® store, or La-Z-Boy Comfort Studio ® , experience and provide design services.
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 Furniture Galleries ® store, La-Z-Boy Comfort Studio ® , or La-Z-Boy branded space experience and provide design services.
We launched our new brand campaign and marketing platform in fiscal 2024, Long Live the Lazy , with compelling, consumer inspired, messaging designed to increase recognition and consideration of the brand. We expect this new messaging will enhance the appeal of our brand with a broader consumer base.
We launched our brand campaign and marketing platform in fiscal 2024, Long Live the Lazy , with compelling, consumer inspired, messaging designed to increase recognition and consideration of the brand. We expect that this messaging will enhance the appeal of our brand with a broader consumer base.
The Wholesale segment sells directly to La-Z-Boy Furniture Galleries ® stores, operators of La-Z-Boy Comfort Studio ® locations, England Custom Comfort Center locations, major dealers, and a wide cross-section of other independent retailers. • Corporate and Other .
The Wholesale segment sells directly to La-Z-Boy Furniture Galleries ® 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 .
The reporting unit for goodwill arising from the acquisition of Joybird is the Joybird operating segment. 29 Table of Contents We test indefinite-lived intangibles and goodwill for impairment on an annual basis in the fourth quarter of our fiscal year, or more frequently if events or changes in circumstances indicate that the carrying value may be impaired.
The reporting unit for goodwill arising from the acquisition of Joybird is the Joybird operating segment. We test indefinite-lived intangibles and goodwill for impairment on an annual basis in the fourth quarter of our fiscal year, or more frequently if events or changes in circumstances indicate that the carrying value may be impaired.
Determining the probability of award vesting requires judgment, including assumptions about future operating performance. While the assumptions we use to calculate and account for stock-based compensation awards represent management's best estimates, these estimates involve inherent uncertainties and the application of our management's best 30 Table of Contents judgment.
Determining the probability of award vesting requires judgment, including assumptions about future operating performance. While the assumptions we use to calculate and account for stock-based compensation awards represent management's best estimates, these estimates involve inherent uncertainties and the application of our management's best judgment.
Consumers experience the La-Z-Boy brand in many channels including the La-Z-Boy Furniture Galleries ® store network and the La-Z-Boy Comfort Studio ® locations, our store-within-a-store format.
Consumers experience the La-Z-Boy brand in many channels including the La-Z-Boy Furniture Galleries ® store network, the La-Z-Boy Comfort Studio ® locations, our store-within-a-store format, and La-Z-Boy branded space locations.
Results of Operations The following discussion provides an analysis of our results of operations and reasons for material changes therein for fiscal year 2024 as compared with fiscal year 2023.
Results of Operations The following discussion provides an analysis of our results of operations and reasons for material changes therein for fiscal year 2025 as compared with fiscal year 2024.
In addition to our branded distribution channels, approximately 2,200 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.
In addition to our branded distribution channels, approximately 1,900 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.
We use considerable judgment in making our estimates and record differences between our estimated and actual costs when the differences are known. Stock-Based Compensation We measure stock-based compensation cost for both equity-based awards and liability-based awards on the grant date based on the awards' fair value and recognize expense over the vesting period.
We use considerable judgment in making our estimates and record differences between our estimated and actual costs when the differences are known. 29 Table of Contents Stock-Based Compensation We measure stock-based compensation cost for both equity-based awards and liability-based awards on the grant date based on the awards' fair value and recognize expense over the vesting period.
As of April 27, 2024, 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.
As of April 26, 2025, 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.
The Credit Facility will mature on October 15, 2026 and provides us the ability to extend the maturity date for two additional one-year periods, subject to the satisfaction of customary conditions. As of April 27, 2024, we have no borrowings outstanding under the Credit Facility.
The Credit Facility will mature on October 15, 2026 and provides us the ability to extend the maturity date for two additional one-year periods, subject to the satisfaction of customary conditions. As of April 26, 2025, we have no borrowings outstanding under the Credit Facility.
Refer to "Results of Operations" in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s 2023 Annual Report on Form 10-K, filed with the SEC on June 20, 2023, for an analysis of the fiscal year 2023 results as compared to fiscal year 2022.
Refer to "Results of Operations" in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s 2024 Annual Report on Form 10-K, filed with the SEC on June 17, 2024, for an analysis of the fiscal year 2024 results as compared to fiscal year 2023.
Refer to Note 7, Goodwill and Other Intangible Assets, for further information regarding our fiscal 2024 impairment testing. Product Warranties We account for product warranties by accruing an estimated liability when we recognize revenue on the sale of warrantied product.
Refer to Note 6, Goodwill and Other Intangible Assets, for further information regarding our fiscal 2025 impairment testing. Product Warranties We account for product warranties by accruing an estimated liability when we recognize revenue on the sale of warrantied product.
Our Wholesale segment manufactures and imports upholstered furniture, such as recliners and motion 23 Table of Contents 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.
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.
With the operating cash flows we anticipate generating in fiscal 2025, we expect to continue repurchasing Company stock. • Cash paid to our shareholders in quarterly dividends was $32.7 million. Our board of directors has sole authority to determine if and when we will declare future dividends and on what terms.
With the operating cash flows we anticipate generating in fiscal 2026, we expect to continue repurchasing Company stock. • Cash paid to our shareholders in quarterly dividends was $35.0 million. Our board of directors has sole authority to determine if and when we will declare future dividends and on what terms.
Other Our consolidated balance sheet as April 27, 2024 reflected a $1.2 million net liability for uncertain income tax positions. We do not expect that the net liability for uncertain income tax positions will significantly change within the next 12 months.
Other Our consolidated balance sheet as April 26, 2025 reflected a $1.1 million net liability for uncertain income tax positions. We do not expect that the net liability for uncertain income tax positions will significantly change within the next 12 months.
During the second quarter of fiscal 2024, we announced further actions intended to drive efficiencies and optimize our manufacturing capacity in our global supply chain operations.
Fiscal Year 2025 and Fiscal Year 2024 Supply Chain Optimization During the second quarter of fiscal 2024, we announced actions intended to drive efficiencies and optimize our manufacturing capacity in our global supply chain operations.
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. During fiscal 2024, we performed the quantitative impairment test on two reporting units and determined that neither was impaired as discussed below.
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. During fiscal 2025, we performed the quantitative impairment test on two reporting units as discussed below.
We believe that Joybird is a brand with significant potential and our strategic initiatives in this area focus on fueling profitable growth through an increase in digital marketing spend to drive awareness and customer acquisition, ongoing investments in technology, an expansion of product assortment, and providing additional small-format stores in key urban markets to enhance our consumers' omni-channel experience.
We believe that Joybird is a brand with significant potential and our strategic initiatives in this area focus on fueling profitable growth through the opening of additional small-format stores in key urban markets, an increase in digital marketing spend to drive awareness and customer acquisition, ongoing investments in technology, and an expansion of product assortment.
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 2025 contractual obligations. We had cash, cash equivalents and restricted cash of $341.1 million at April 27, 2024, compared with $346.7 million at April 29, 2023.
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 2026 contractual obligations. We had cash and cash equivalents of $328.4 million at April 26, 2025, compared with $341.1 million at April 27, 2024.
Goodwill arising from the acquisition of our wholesale business in the United Kingdom and Ireland and the acquisition of our manufacturing business in the United Kingdom is combined into the United Kingdom reporting unit.
The reporting unit for goodwill arising from retail store acquisitions is our Retail operating segment. Goodwill arising from the acquisition of our wholesale business in the United Kingdom and Ireland and the acquisition of our manufacturing business in the United Kingdom is combined into the United Kingdom reporting unit.
As part of this initiative, we made the decision to shift upholstery production from our Ramos, Mexico operations to our other upholstery plants and relocate our cut and sew operations back to Ramos, Mexico, resulting in the permanent closure of our leased cut and sew facility in Parras, Mexico, which is expected to be completed by the end of the first quarter of fiscal 2025.
As part of this initiative, we made the decision to shift upholstery production from our Ramos, Mexico operations to our other upholstery plants and relocate our cut and sew operations back to Ramos, Mexico, resulting in the permanent closure of our leased cut and sew facility in Parras, Mexico.
Joybird Reporting Unit The Joybird reporting unit, which has goodwill of $55.4 million at April 27, 2024, has an estimated fair value that exceeds is carrying value by approximately 6%.
Joybird Reporting Unit The Joybird reporting unit, which has goodwill of $55.4 million at April 26, 2025, has an estimated fair value that exceeds its carrying value by approximately 16%.
Investing Activities During fiscal 2024, net cash used for investing activities was $81.6 million, an increase of $11.4 million c ompared with the prior year primarily due to an increase in La-Z-Boy Furniture Galleries ® acquisitions and lower proceeds from the sale of investments, net of investment purchases, all partially offset by lower capital expenditures.
Investing Activities During fiscal 2025, net cash used for investing activities was $98.4 million, an increase of $16.8 million c ompared with the prior year primarily due to an increase in capital expenditures partially offset by lower cash payments for La-Z-Boy Furniture Galleries ® acquisitions.
Cash used for investing activities in fiscal 2024 included the following: • Cash used for capital expenditures in the period was $53.6 million compared with $68.8 million during fiscal 2023, which is primarily related to upgrades at our manufacturing and distribution facilities, La-Z-Boy Furniture Galleries ® (new stores and remodels) and Joybird store projects.
Cash used for investing activities in fiscal 2025 included the following: • Cash used for capital expenditures in the period was $74.3 million compared with $53.6 million during fiscal 2024, which was primarily related to La-Z-Boy Furniture Galleries ® (new stores and remodels), manufacturing-related investments, and market showroom upgrades.
The reacquired rights to own and operate La-Z-Boy Furniture Galleries ® stores are indefinite-lived because our retailer agreements are perpetual agreements that have no specific expiration date and no renewal options. A retailer agreement remains in effect as long as the independent retailer is not in default under the terms of the agreement.
The reacquired rights to own and operate La-Z-Boy Furniture Galleries ® stores are indefinite-lived because our retailer agreements are perpetual agreements that have no specific expiration date and no renewal options.
Cash used for financing activities in fiscal 2024 included the following: • Our board of directors has authorized the repurchase of Company stock and we spent $52.8 million during fiscal 2024 to repurchase 1.6 million shares. As of April 27, 2024, 5.7 million shares remained available for repurchase pursuant to this authorization.
Cash used for financing activities in fiscal 2025 included the following: • Our board of directors has authorized the repurchase of Company stock and we spent $77.9 million during fiscal 2025 to repurchase 2.0 million shares. As of April 26, 2025, 3.7 million shares remained available for repurchase pursuant to this auth 27 Table of Contents orization.
Profitably growing the Joybird brand • Profitably growing the Joybird brand with a digital-first consumer experience. During fiscal 2019, we purchased Joybird, a leading e-commerce retailer and manufacturer of upholstered furniture with a direct-to-consumer model.
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 had purchase obligations of $181.7 million, all payable within 12 months, related to open purchase orders, primarily with foreign and domestic casegoods, leather, and fabric suppliers, which are generally cancellable if production has not begun. Open purchase orders also include contracts for indirect services, which are generally cancellable before services commence.
We had open purchase orders of $197.7 million, the majority of which are payable within 12 months, primarily related to contracts for indirect services, which are generally cancellable before services commence, along with orders from suppliers of raw materials and finished goods, which are generally cancellable if production has not begun.
Non-Operating Income (Expense) Interest Income Interest income was $8.8 million higher in fiscal 2024 compared with fiscal 2023. The increase in interest income was primarily driven by higher interest rates on higher cash balances. Other Income (Expense), Net Other income (expense), net was $0.1 million of expense in fiscal 2024 compared with $11.8 million of expense in fiscal 2023.
Non-Operating Income (Expense) Interest Income Interest income was $0.6 million lower in fiscal 2025 compared with fiscal 2024. The decrease in interest income was primarily driven by lower interest rates. Other Income (Expense), Net Other income (expense), net was $3.0 million of expense in fiscal 2025 compared with $0.1 million of expense in fiscal 2024.
Note that our 2024 and 2023 fiscal years included 52 weeks, whereas fiscal year 2022 included 53 weeks. Introduction Our Business We are the leading global producer of reclining chairs and one of the largest manufacturer/distributors of residential furniture in the United States .
Note that our 2025, 2024 and 2023 fiscal years all included 52 weeks. 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 Furniture Galleries ® stores retail network is the third largest retailer of single-branded furniture in the United States .
We have no material contractual commitments outstanding for future capital expenditures. • Cash used for acquisitions was $39.4 million, related to the acquisition of the Bradenton and Sarasota, Florida, Illinois and Indiana, Colorado Springs, Colorado and Lafayette, Louisiana retail businesses. • Proceeds from the sale of investments, net of investment purchases, was $6.5 million.
We have no material contractual commitments outstanding for future capital expenditures. • Cash used for acquisitions was $29.5 million, related to the acquisition of the Davenport, Iowa, Melbourne and Cocoa, Florida, Toledo, Ohio, and Lansing and Portage, Michigan retail businesses. • Proceeds from the sale of investments, net of investment purchases, was $5.0 million.
We performed a sensitivity analysis on the discount rate and terminal growth rate and using a range of reasonable inputs, the fair value of the Joybird reporting unit either exceeded its carrying value or did not exceed its carrying value by an immaterial amount, for each of the various scenarios analyzed.
We performed a sensitivity analysis on the discount rate and terminal growth rate and using a range of reasonable inputs, the fair value of the Joybird reporting unit exceeded its carrying value for each of the various scenarios analyzed. The key assumption that factored into the valuation under the market approach was the market multiples applied to revenue.
Our goodwill relates to the acquisitions of La-Z-Boy Furniture Galleries ® stores, the La-Z-Boy wholesale business in the United Kingdom and Ireland, the La-Z-Boy manufacturing business in the United Kingdom, and Joybird ® , an e-commerce retailer and manufacturer of upholstered furniture. The reporting unit for goodwill arising from retail store acquisitions is our Retail operating segment.
A retailer agreement remains in effect as long as the independent retailer is not in default under the terms of the agreement. 28 Table of Contents Our goodwill relates to the acquisitions of La-Z-Boy Furniture Galleries ® stores, the La-Z-Boy wholesale business in the United Kingdom and Ireland, the La-Z-Boy manufacturing business in the United Kingdom, and Joybird ® , an e-commerce retailer and manufacturer of upholstered furniture.
During fiscal 2024, net cash used for financing activities was $81.2 million, an increase of $44.1 million compared with the prior year, primarily due to higher share repurchases, partially offset by proceeds from exercised stock options.
During fiscal 2025, net cash used for financing activities was $102.6 million, an increase of $21.4 million compared with the prior year, primarily due to higher share repurchases and dividends, partially offset by cash paid in fiscal 2024 for holdback payments made on prior-period acquisitions.
The La-Z-Boy Furniture Galleries ® stores retail network is the third 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, Kincaid ® , and Joybird ® tradenames.
We manufacture, market, import, export, distribute and retail upholstery furniture products under the La-Z-Boy ® , England, Kincaid ® , and Joybird ® tradenames. In addition, we import, distribute and retail accessories and casegoods (wood) furniture products under the Kincaid ® , American Drew ® , Hammary ® , and Joybird ® tradenames.
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. • Proceeds from exercised stock options, net of stock issued and taxes withheld as part of our employee benefit plans, was $10.9 million. • Cash paid for holdback payments made on prior-period acquisitions was $5.0 million for a guaranteed payment related to the acquisition of Joybird, which was the final payment related to this acquisition. 28 Table of Contents Exchange Rate Changes Due to changes in exchange rates, our cash, cash equivalents, and restricted cash decreased by $0.9 million from the end of fiscal year 2023 to the end of fiscal year 2024.
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. • Proceeds from exercised stock options, net of stock issued and taxes withheld as part of our employee benefit plans, was $12.4 million.
We explain these items further when we discuss each segment's results later in this Management's Discussion and Analysis.
Refer to Note 6, Goodwill and Other Intangible Assets, for further information regarding our fiscal 2025 impairment testing. We explain these items further when we discuss each segment's results later in this Management's Discussion and Analysis.
Included in our cash, cash equivalents and restricted cash at April 27, 2024, is $80.7 million held by foreign subsidiaries, the majority of which we have determined to be permanently reinvested. In addition, we had investments to enhance our returns on cash of $6.8 million at April 27, 2024, compared with $11.6 million at April 29, 2023.
Included in our cash and cash equivalents at April 26, 2025, was $58.2 million held by foreign subsidiaries, the majority of which we have determined to be permanently reinvested.
Corporate and Other (52 weeks) (52 weeks) (FY24 vs FY23) (Amounts in thousands, except percentages) 4/27/2024 4/29/2023 % Change Sales $ 153,769 $ 166,190 (7.5) % Intercompany eliminations (409,146) (489,048) (16.3) % Operating loss (60,259) (65,347) (7.8) % Sales Corporate and Other sales decreased $12.4 million in fiscal 2024 compared with fiscal 2023, primarily due to a $7.8 million, or 5% decrease from Joybird, which contributed $138.6 million in sales in fiscal 2024.
Refer to Note 6, Goodwill and Other Intangible Assets, for further information regarding our fiscal 2025 impairment testing. 25 Table of Contents Corporate and Other (52 weeks) (52 weeks) (FY25 vs FY24) (Amounts in thousands, except percentages) 4/26/2025 4/27/2024 % Change Sales $ 160,475 $ 153,769 4.4 % Intercompany eliminations (429,457) (409,146) 5.0 % Operating loss (51,793) (60,259) (14.0) % Sales Corporate and Other sales increased $6.7 million in fiscal 2025 compared with fiscal 2024, primarily due to a $7.5 million, or 5%, increase from Joybird, which contributed $146.1 million in sales in fiscal 2025.
The following table illustrates the main components of our cash flows: Fiscal Year Ended (52 weeks) (52 weeks) (Amounts in thousands) 4/27/2024 4/29/2023 Cash Flows Provided By (Used For) Net cash provided by operating activities $ 158,127 $ 205,167 Net cash used for investing activities (81,554) (70,120) Net cash used for financing activities (81,227) (37,139) Exchange rate changes (926) (86) Change in cash, cash equivalents and restricted cash $ (5,580) $ 97,822 Operating Activities During fiscal 2024, net cash provided by operating activities was $158.1 million, a decrease of $47.0 million compared with the prior year mainly due to lower net income and less favorable changes in working capital relative to the prior year, partially 27 Table of Contents offset by smaller reduction in customer deposits, reflecting a reduced backlog.
In addition, we had investments to enhance our returns on cash of $2.6 million at April 26, 2025, compared with $6.8 million at April 27, 2024. 26 Table of Contents The following table illustrates the main components of our cash flows: Fiscal Year Ended (52 weeks) (52 weeks) (Amounts in thousands) 4/26/2025 4/27/2024 Cash Flows Provided By (Used For) Net cash provided by operating activities $ 187,271 $ 158,127 Net cash used for investing activities (98,389) (81,554) Net cash used for financing activities (102,612) (81,227) Exchange rate changes 1,081 (926) Change in cash and cash equivalents $ (12,649) $ (5,580) Operating Activities During fiscal 2025, net cash provided by operating activities was $187.3 million, an increase of $29.1 million compared with the same period a year ago.
Our cash provided by operating activities in fiscal 2024 was primarily attributable to net income, adjusted for non-cash items and a $19.9 million decrease in inventory.
The year over year increase was primarily due to lower receivables, a lower incentive compensation payout in fiscal 2025 relative to the prior year, and a smaller reduction of customer deposits. Our cash provided by operating activities in fiscal 2025 was primarily attributable to net income, adjusted for non-cash items.
This decrease in sales was partially offset by a $25.2 million increase in sales related to our fiscal 2024 retail store acquisitions and the full-year impact of our fiscal 2023 retail store acquisitions. Written same-store sales decreased 3% in fiscal 2024 compared with fiscal 2023, primarily due to softer industry-wide demand as a result of a challenging macroeconomic environment.
These increases were partially offset by a decline in delivered same-store sales. Written same-store sales decreased 1% in fiscal 2025 compared with fiscal 2024, primarily due to lower consumer demand as a result of a challenging macroeconomic environment.
Written sales for Joybird were down 8% in fiscal 2024 compared with fiscal 2023, reflecting the industry-wide demand challenges noted above. 26 Table of Contents Intercompany eliminations decreased in fiscal 2024 compared with fiscal 2023 due to lower sales from our Wholesale segment to our Retail segment, driven by lower sales in the Retail segment.
Intercompany eliminations increased in fiscal 2025 compared with fiscal 2024 due to higher sales from our Wholesale segment to our Retail segment, driven by higher sales in the Retail segment.
In addition, we import, distribute and retail accessories and casegoods (wood) furniture products under the Kincaid ® , American Drew ® , Hammary ® , and Joybird ® tradenames. For additional information about our business, refer to Part I, Item 1, Business of this report.
For additional information about our business, refer to Part I, Item 1, Business of this report.
We expect capital expenditures to be in the range of $70 to $80 million for fiscal 2025, primarily related to improvements and expansion of our Retail stores, replacement of machinery and equipment for various manufacturing and distribution facilities, and technology upgrades.
We expect capital expenditures to be in the range of $90 to $100 million for fiscal 2026, primarily related to investments in our La-Z-Boy Furniture Galleries ® (new stores and remodels), distribution network redesign, and manufacturing operations.
The expense in fiscal 2023 was primarily due to a $10.3 million impairment of our investments in a privately held start-up company combined with exchange rate losses. Income Taxes Our effective income tax rate was 24.8% for fiscal 2024 and 26.2% for fiscal 2023. Refer to Note 18, Income Taxes, for additional information.
The expense in fiscal 2025 was primarily due to exchange rate losses related to our operations in Mexico and Thailand. Income Taxes Our effective income tax rate was 31.4% for fiscal 2025 and 24.8% for fiscal 2024.
As a result of this action, charges were recorded within the Wholesale segment in the third and fourth quarters of fiscal 2023, totaling $9.2 million in selling, general, and administrative ("SG&A") expense for the impairment of various assets, primarily long-lived assets, and $1.6 million in cost of sales, primarily related to severance.
Additionally, as result of a significant customer transition and a challenging consumer demand environment in the United Kingdom, during the fourth quarter of fiscal 2025, we recorded charges within the Wholesale segment of $20.6 million for the full impairment of the United Kingdom reporting unit's goodwill and $2.1 million in SG&A expense for the impairment of various long-lived assets in the United Kingdom.
Operating Margin The Wholesale segment's operating margin increased 10 basis points in fiscal 2024 compared with fiscal 2023. • Gross margin increased 210 basis points during fiscal 2024 compared with fiscal 2023. ◦ Lower input costs, led by reduced commodity prices and improved sourcing, drove a 390 basis point increase in gross margin during fiscal 2024 compared with the prior year. ◦ Partially offsetting the item above, plant inefficiencies resulting from lower production volume and transition costs related to our supply chain optimization initiative in Mexico led to a 90 basis point decrease in gross margin during fiscal 2024 compared with the prior year. ◦ Gross margin further decreased 90 basis points in fiscal 2024 compared with the prior year, from selective pricing and promotional actions taken to maintain competitiveness. • SG&A expense as a percentage of sales increased 200 basis points during fiscal 2024 compared with fiscal 2023. ◦ While SG&A expenses decreased in fiscal 2024 compared with the prior year, SG&A expenses as a percentage of sales increased, primarily due to reduced fixed cost leverage from lower delivered sales. ◦ Additionally, higher marketing expense in support of our Long Live the Lazy campaign launch drove a 60 basis point increase in SG&A expense as a percentage of sales in fiscal 2024 compared with the prior year.
Operating Margin The Wholesale segment's operating margin decreased 130 basis points in fiscal 2025 compared with fiscal 2024. • Gross margin increased 30 basis points during fiscal 2025 compared with fiscal 2024. ◦ Lower input costs, led by reduced commodity prices and improved sourcing, drove a 90 basis point increase in gross margin during fiscal 2025 compared with the prior year. ◦ The comparative impact of the Supply Chain Optimization charges noted above in Mexico and the United Kingdom resulted in a net 20 basis point increase in gross margin in fiscal 2025 compared with fiscal 2024. ◦ Gross margin decreased 50 basis points in fiscal 2025 due to an unfavorable shift in product mix towards products that have a lower gross margin. ◦ Higher tariff expense in fiscal 2025, which accelerated in the fourth quarter due to changes in tariff policies, combined with favorable tariff expense in fiscal 2024 resulted in a comparative 40 basis point decrease in gross in margin in fiscal 2025. • SG&A expense as a percentage of sales increased 10 basis points during fiscal 2025 compared with fiscal 2024. ◦ SG&A expense as a percentage of sales increased 40 basis points in fiscal 2025 compared with fiscal 2024 from fixed cost deleverage on lower sales in our international wholesale business due to a significant customer transition. ◦ Marketing expense in fiscal 2025 decreased relative to the prior year, as during fiscal 2024 we launched our Long Live the Lazy campaign, resulting in a 30 basis point comparative decrease in SG&A expense as a percentage of sales. • Operating margin decreased 150 basis points due to a $20.6 million non-cash impairment charge to reduce the carrying value of goodwill associated with our wholesale and manufacturing businesses in the United Kingdom.
Retail Segment (52 weeks) (52 weeks) (FY24 vs FY23) (Amounts in thousands, except percentages) 4/27/2024 4/29/2023 % Change Sales $ 855,126 $ 982,043 (12.9) % Operating income 111,682 161,571 (30.9) % Operating margin 13.1% 16.5% Sales The Retail segment's sales decreased $126.9 million, or 13%, in fiscal 2024 compared with fiscal 2023, primarily due to the adverse comparison to historic sales levels in fiscal 2023, which were fueled by the delivery of previously built backlog.
Retail Segment (52 weeks) (52 weeks) (FY25 vs FY24) (Amounts in thousands, except percentages) 4/26/2025 4/27/2024 % Change Sales $ 898,370 $ 855,126 5.1 % Operating income 105,417 111,682 (5.6) % Operating margin 11.7% 13.1% Sales The Retail segment's sales increased $43.2 million, or 5%, in fiscal 2025 compared with fiscal 2024, primarily due to $42.4 million of incremental sales resulting from our fiscal 2025 retail store acquisitions and the full-year impact of our fiscal 2024 retail store acquisitions, along with $15.3 million of sales from our retail store expansion, net of closed stores.
This was partially offset by unfavorable intercompany inventory profit elimination adjustments, lower operating profit from our global trading company in Hong Kong and a comparative decrease in fiscal 2024 related to an $0.8 million gain recognized in fiscal 2023 to reduce the fair value of the Joybird contingent consideration liability based on our projections at that time.
Operating Loss Our Corporate and Other operating loss decreased $8.5 million in fiscal 2025 compared with fiscal 2024, primarily from improved Joybird operating performance, resulting in breakeven profit, and favorable intercompany profit elimination adjustments relative to the same period a year ago. This was partially offset by lower intercompany operating profit from our global trading company in Hong Kong.
These changes impacted our cash balances held in Canada, Thailand, and the United Kingdom. Contractual Obligations Lease Obligations. We lease real estate for retail stores, distribution centers, warehouses, plants, showrooms and office space and also have equipment leases for tractors/trailers, IT and office equipment, and vehicles.
We lease real estate for retail stores, distribution centers, warehouses, plants, showrooms and office space and also have equipment leases for tractors/trailers, IT and office equipment, and vehicles. As of April 26, 2025, we had operating and finance lease payment obligations of $568.1 million and $3.0 million, respectively, with $99.2 million and $1.0 million, payable within 12 months, respectively.
Operating Margin The Retail segment's operating margin decreased 340 basis points in fiscal 2024 compared with fiscal 2023. • Gross margin increased 120 basis points during fiscal 2024 compared with the prior year, primarily due to favorable shift in product mix towards higher margin products. • While SG&A expenses decreased during fiscal 2024 compared with the prior year, SG&A expenses as a percentage of sales increased 460 basis points over the same period, primarily due to lower delivered sales relative to selling expenses and fixed costs, mainly occupancy expenses. 25 Table of Contents Wholesale Segment (52 weeks) (52 weeks) (FY24 vs FY23) (Amounts in thousands, except percentages) 4/27/2024 4/29/2023 % Change Sales $ 1,048,431 $ 1,215,429 Intersegment sales 398,847 474,819 Total sales 1,447,278 1,690,248 (14.4) % Operating income 99,373 115,215 (13.7) % Operating margin 6.9% 6.8% Sales The Wholesale segment's sales decreased 14%, or $243.0 million, in fiscal 2024 compared with fiscal 2023.
Wholesale Segment (52 weeks) (52 weeks) (FY25 vs FY24) (Amounts in thousands, except percentages) 4/26/2025 4/27/2024 % Change Sales $ 1,056,914 $ 1,048,431 Intersegment sales 422,905 398,847 Total sales 1,479,819 1,447,278 2.2 % Operating income 82,213 99,373 (17.3) % Operating margin 5.6% 6.9% Sales The Wholesale segment's sales increased 2%, or $32.5 million, in fiscal 2025 compared with fiscal 2024, primarily due to increased volume in our core North America La-Z-Boy branded upholstery business, mainly driven by sales to our Retail segment along with growth from our major wholesale dealers, combined with a favorable shift in product mix toward higher price products.
Removed
Fiscal Year 2024 and Fiscal Year 2023 Supply Chain Optimization During the third quarter of fiscal 2023, we made the decision to close our manufacturing facility in Torreón, Mexico as part of our initiative to drive improved efficiencies through optimized staffing levels within our plants.
Added
Refer to Note 6, Goodwill and Other Intangible Assets, for further information regarding our fiscal 2025 impairment testing. Further, as we continue to drive efficiencies and optimize our manufacturing capacity in the United Kingdom to meet current demand, during the fourth quarter of fiscal 2025 we recorded severance-related charges of $1.1 million in cost of sales within the Wholesale segment.
Removed
During the first quarter of fiscal 2024, we terminated our lease on the Torreón facility and recognized a $1.2 million gain in SG&A expense within the Wholesale segment related to the settlement of our lease obligation on the previously impaired long-lived assets.
Added
La-Z-Boy Incorporated (52 weeks) (52 weeks) (FY25 vs FY24) (Amounts in thousands, except percentages) 4/26/2025 4/27/2024 % Change Sales $ 2,109,207 $ 2,047,027 3.0 % Operating income 135,837 150,796 (9.9) % Operating margin 6.4% 7.4% Sales Consolidated sales in fiscal 2025 increased $62.2 million, or 3%, compared with the prior year, primarily driven by incremental sales resulting from our Retail acquisitions and new store expansion, higher delivered wholesale volume in our core North America La-Z-Boy branded upholstery business, including growth from our major wholesale dealers, and higher delivered volume in our Joybird business. 23 Table of Contents Operating Margin Operating margin, which is calculated as operating income as a percentage of sales, decreased 100 basis points in fiscal 2025 compared with the prior year. • Gross margin increased 80 basis points during fiscal 2025 compared with fiscal 2024. ◦ Changes in our consolidated mix led to a 40 basis point increase in gross margin in fiscal 2025 compared with fiscal 2024 driven by growth of our Retail segment, which has higher gross margin than our Wholesale segment. ◦ Lower input costs, led by reduced commodity prices and improved sourcing, drove an increase in gross margin during fiscal 2025 compared with the prior year. ◦ Partially offsetting the items above, higher tariff expense in fiscal 2025, which accelerated in the fourth quarter due to changes in tariff policies, combined with favorable tariff expense in fiscal 2024 resulted in a comparative decrease in gross margin in fiscal 2025. • Selling, general, and administrative ("SG&A") expenses increased 80 basis points during fiscal 2025 compared with fiscal 2024. ◦ Changes in our consolidated mix led to a 40 basis point increase in SG&A expense as a percentage of sales in fiscal 2025 compared with fiscal 2024 driven by growth of our Retail segment, which has a higher SG&A expense as a percentage of sales than our Wholesale segment. ◦ SG&A expense as a percentage of sales increased in fiscal 2025 compared with fiscal 2024 due to fixed cost deleverage on lower sales in our international wholesale business due to a significant customer transition. ◦ SG&A expense as a percentage of sales in fiscal 2025 also increased due to higher selling expenses and fixed costs resulting from acquisitions of independently owned La-Z-Boy Furniture Galleries ® and retail store expansion, both to support our long-term strategy of growing our Retail segment. • Operating margin decreased 100 basis points due to a $20.6 million non-cash impairment charge to reduce the carrying value of goodwill associated with our wholesale and manufacturing businesses in the United Kingdom.
Removed
La-Z-Boy Incorporated (52 weeks) (52 weeks) (FY24 vs FY23) (Amounts in thousands, except percentages) 4/27/2024 4/29/2023 % Change Sales $ 2,047,027 $ 2,349,433 (12.9) % Operating income 150,796 211,439 (28.7) % Operating margin 7.4% 9.0% Sales Consolidated sales in fiscal 2024 decreased $302.4 million, or 13%, compared with the prior year.
Added
Same-store sales include the sales of all currently active stores which have been open and company-owned for each comparable period. 24 Table of Contents Operating Margin The Retail segment's operating margin decreased 140 basis points in fiscal 2025 compared with fiscal 2024. • Gross margin increased 10 basis points during fiscal 2025 compared with the prior year, primarily due to a slight shift in product mix towards higher margin products. • SG&A expenses as a percentage of sales increased 150 basis points during fiscal 2025 compared with the prior year, primarily due to increased selling expenses and fixed costs resulting from our acquisitions of independently owned La-Z-Boy Furniture Galleries ® and retail store expansion, both to support our long-term strategy of growing our Retail segment.
Removed
Sales in fiscal 2023 were fueled by the delivery of a significant backlog resulting from heightened demand in prior periods.
Added
The increase in sales was partially offset by a significant customer transition in our international wholesale business.
Removed
Absent this backlog, sales were relatively flat in fiscal 2024 compared with fiscal 2023, as incremental sales from our Retail acquisitions and the addition of new major wholesale dealers were essentially offset by selective pricing taken on products and delivery services, along with promotional actions, to maintain competitiveness. 24 Table of Contents Operating Margin Operating margin, which is calculated as operating income as a percentage of sales, decreased 160 basis points in fiscal 2024 compared with the prior year. • Gross margin increased 200 basis points during fiscal 2024 compared with fiscal 2023. ◦ Lower input costs, led by reduced commodity prices and improved sourcing, drove an increase in gross margin in fiscal 2024 compared with the prior year. ◦ Gross margin further benefited from a favorable shift in product mix within our Retail segment toward higher margin products. ◦ Partially offsetting the benefits above, plant inefficiencies resulting from lower production volume and transition costs related to our supply chain optimization initiative in Mexico drove a decline in gross margin during fiscal 2024 compared with the prior year ◦ Gross margin further decreased from selective pricing and promotional actions taken in fiscal 2024 to maintain competitiveness. • While selling, general, and administrative ("SG&A") expenses were down $22.4 million in fiscal 2024 compared with the prior year, SG&A expenses as a percentage of sales increased 360 basis points over the same period, primarily due to lower delivered sales relative to fixed costs.
Added
The increase in Joybird sales was driven by higher delivered volume partially offset by increased promotional activity relative to the prior year. Written sales for Joybird were flat in fiscal 2025 compared with fiscal 2024.
Removed
Same-store sales include the sales of all currently active stores which have been open and company-owned for each comparable period.
Added
The increase in the effective tax rate in fiscal 2025 compared with the prior year was primarily the result of the one-time tax effect of a non-deductible goodwill impairment charge related to the United Kingdom reporting unit along with unfavorable changes in the valuation allowance. Refer to Note 17, Income Taxes, for additional information.
Removed
The decrease in sales primarily reflects a decline in delivered unit volume reflecting the absence of the significant backlog built from prior periods that delivered throughout fiscal 2023, combined with lower furniture demand across the entire industry due to a challenging macroeconomic environment.
Added
Exchange Rate Changes Due to changes in exchange rates, our cash and cash equivalents increased by $1.1 million from the end of fiscal year 2024 to the end of fiscal year 2025. These changes impacted our cash balances held in Canada, Thailand, and the United Kingdom. Contractual Obligations Lease Obligations.
Removed
To a lesser extent, sales also decreased in fiscal 2024 compared with fiscal 2023 as a result of selective pricing on products and delivery services, along with promotional actions, taken to maintain competitiveness.
Added
Refer to Note 5, Leases, for additional information. Purchase Obligations.
Removed
Investments in this campaign support all La-Z-Boy branded products, including those sold through our Retail segment.
Added
United Kingdom Reporting Unit The United Kingdom reporting unit, which had goodwill of $20.1 million at April 27, 2024, and $20.6 million at the time of the impairment test, was deemed to be impaired and was reduced to zero during the fourth quarter of fiscal 2025 as the carrying value of the reporting unit exceeded its fair value by an amount greater than the goodwill existing at the time of the impairment test.
Removed
Joybird's overall delivered volume declined in fiscal 2024, largely due to softer demand in the furniture and home furnishings industry experienced over the last year.
Removed
Operating Loss Our Corporate and Other operating loss decreased $5.1 million in fiscal 2024 compared with fiscal 2023, primarily from improved Joybird operating performance.
Removed
This was partially offset by a $22.7 million decrease in customer deposits, reflecting the reduced backlog, and a $16.8 million increase in receivables, reflecting higher sales from our Wholesale business to external dealers during the fourth quarter of fiscal 2024 compared with same period a year ago.
Removed
As of April 27, 2024, we had operating and finance lease payment obligations of $557.8 million and $2.0 million, respectively, with $94.6 million and $0.7 million, payable within 12 months, respectively. Refer to Note 6, Leases, for additional information. Purchase Obligations.
Removed
The key assumption that factored into the valuation under the market approach was the market multiples applied to revenue. United Kingdom Reporting Unit The United Kingdom reporting unit, which has goodwill of $20.1 million at April 27, 2024, has an estimated fair value that exceeds is carrying value by approximately 28%.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+0 added−0 removed7 unchanged
We are exposed to market risk with respect to commodity and transportation costs, principally related to commodities we use in producing our products, including steel, wood and polyurethane foam, in addition to transportation costs for delivering our products. As commodity prices and transportation costs rise, we determine whether a price increase to our customers to offset these costs is warranted.
We are exposed to market risk with respect to commodity and transportation costs, principally related to commodities we use in producing our products, including steel, wood and polyurethane foam, in addition to transportation costs for delivering our products. If commodity prices and transportation costs rise, we determine whether a price increase to our customers to offset these costs is warranted.
Based on our current and expected levels of exposed liabilities, management estimates that a one percentage point change in interest rates would not have had a material impact on our results of operations for fiscal 2024.
Based on our current and expected levels of exposed liabilities, management estimates that a one percentage point change in interest rates would not have had a material impact on our results of operations for fiscal 2025.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. While we had no variable rate borrowings at April 27, 2024, we could be exposed to market risk from changes in risk-free interest rates if we incur variable rate debt in the future.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. While we had no variable rate borrowings at April 26, 2025, we could be exposed to market risk from changes in risk-free interest rates if we incur variable rate debt in the future.
Additionally, we are exposed to duties and tariffs on our finished goods that we export from our assembly plants to other countries. As these tariffs and duties increase, we determine whether a price increase to our customers to offset these costs is warranted.
Additionally, we are exposed to duties and tariffs on our finished goods that we export from our assembly plants to other countries. As these tariffs and duties increase, we determine whether a price increase 30 Table of Contents to our customers to offset these costs is warranted.

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