Upholstery manufacturer La-Z-Boy Incorporated has reported a record full year of retail sales supported by a strong fourth quarter finish.
According to its results for the period ended 29 April 2023, total sales remained static at $2.3bn year-on-year, with operating income up 2% to $211.4m. Net income resulted at $151m.
Within its retail segment, sales increased 22% to $982m, a record result, alongside operating profit growth of 2%.
Q4 sales decreased overall by 18% to $561m, although retail segment sales rose 4% to $243m. Wholesale sales during the quarter were down 23% to $395m.
Commenting on the results, Melinda D. Whittington, President and Chief Executive Officer of La-Z-Boy Incorporated, said: “I would like to congratulate and thank our entire organization for delivering another strong year, with record Retail segment sales and operating profit, and record consolidated diluted EPS.
“We achieved these results through disciplined supply chain investments and solid execution in our company owned retail stores, reflecting the strength of our vertically integrated Retail and Wholesale model. We are pleased with our strong finish in the fourth quarter, where we were able to maintain roughly flat written same-store sales despite the declining macro environment.
“Our results were enabled by our strong portfolio of iconic brands, collaboration and leadership of our talented employees, and execution of our value proposition – comfortable custom furniture with quick delivery – as our backlog has returned to more normalized historical levels. Our playbook is working, with our Retail penetration increasing through new store growth and independent Furniture Galleries® store acquisitions.
“We are confident in our ability to advance our business in an uncertain macro environment with our strong debt free balance sheet allowing us to invest in our Century Vision strategy to drive future growth. The foundation is set through Century Vision to expand brand reach and we continue to target sales growth exceeding the industry growth rate and double-digit operating margins over the long term. We look forward to executing this business strategy to create long-term shareholder value.”
Looking ahead, Bob Lucian, Chief Financial Officer of La-Z-Boy Incorporated, added: “Excluding the impact of delivering backlog sales (approximately $300m), normalized La-Z-Boy consumer demand in fiscal 2023 was 17% higher that it was in pre-pandemic fiscal 2019. In fiscal 2024, we expect to grow ahead of the industry from this normalized base, with the back half of our fiscal year stronger than the front half, in line with pre-pandemic seasonality trends.
“For our first quarter of fiscal 2024, which is generally the lowest sales quarter in the fiscal year, we expect sales to be in the range of $470 to $490m and operating margin to be in the range of 6.5% to 7.5%.”