La-Z-Boy beats analyst estimates with record sales of $ 2.4B for fiscal 2022

MONROE, Mich. – In results for its fourth quarter and fiscal year ended April 30, La-Z-Boy Inc. reported total sales for the quarter increased 32% to a record $ 685 million (up 22% adjusting for an additional week in fiscal 2022). For fiscal year 2022, total sales increased 36% to a record $ 2.4 billion (up 33% adjusting for an additional week in fiscal 2022).

“In what was a dynamic and volatile year marked by strong consumer demand for home furnishings, significant global supply chain challenges, and now macroeconomic and geopolitical uncertainty, La-Z-Boy Incorporated delivered record sales and operating income driven by powerful consumer brands, vast distribution, and the hard work of our passionate team, ”said Melinda D. Whittington, president and CEO.

Fourth quarter 2022 vs. fourth quarter 2021 highlights:

  • Consolidated sales increased 32% (up 22% adjusting for the additional week) to a record $ 685 million, driven by realized pricing and surcharge actions as well as increased volume.
  • Retail sales increased 20% to $ 233 million.
  • Joybird (online) sales increased 40% to a record $ 53 million.
  • Consolidated operating margin of 11.5% vs. 9.6%.

Fiscal 2022 full year vs. Fiscal 2021 full year highlights:

  • Consolidated sales increased 36% (up 33% adjusting for the additional week) to a record $ 2.4 billion.
  • Retail sales increased 31% to $ 804 million.
  • Joybird (online) sales increased 62% to a record $ 176 million.
  • Consolidated operating margin of 8.8% vs. 7.9%.

“Our company-owned retail segment posted record sales for the year, in addition to record operating profit, which more than doubled, while sales for direct-to-consumer Joybird increased 62% to a record $ 176 million,” Whittington said. “Our wholesale segment delivered record sales, with strong sequential improvement on production execution and margins. We had a great finish to the year, including sequential quarterly improvement in operating margin. ”

La-Z-Boy intends to work on its backlog in the short run and a longer-term focus on its Century Vision strategic investments even in the midst of “macroeconomic volatility.”

Consolidated sales in the fourth quarter of fiscal 2022 reflected higher production, pricing and surcharge actions. The extra week in the fiscal 2022 quarter increased sales by approximately $ 49 million based on the average weekly sales for the quarter.

Operating margin for the current-year period was impacted by raw material inflation and plant inefficiencies related to increasing manufacturing capacity, partially offset by pricing and surcharge actions, and fixed-cost leverage at higher volumes.

La-Z-Boy reported a decline of 9% in written same-store sales for its company-owned La-Z-Boy Furniture Galleries for the fourth quarter, reflecting near-term consumer impacts of inflation and geopolitical concerns, according to the company .

Joybird the DTC company La-Z-Boy acquired in 2018, continued its upward trajectory. The company attributed Joybird’s profit increase to improved gross margin and continued increased marketing investments as the company builds brand awareness and works to increase web conversion, retail store traffic, average order value and average sales price

During fiscal year 2022, La-Z-Boy invested $ 72 million in higher inventory levels to protect against supply chain disruptions and to support increased production and delivered sales.

The company invested $ 77 million in capital expenditures for the year for store remodels, new upholstery manufacturing capacity in Mexico and plant and technology upgrades.

La-Z-Boy executives remain bullish, despite overall economic headwinds.

“We expect current macroeconomic and geopolitical uncertainty and its effect on consumer sentiment will likely cause demand trends to remain volatile for the foreseeable future,” said Bob Lucian, chief financial officer. “We are beginning to increase investment in marketing to drive demand for our strong brands to leverage their power in the marketplace, controlling controllables, and improving our agility to navigate global supply chain disruptions.

Taking all known factors into consideration, we expect delivered sales for the fiscal 2023 first quarter to be up 7% to 10% vs. the first quarter of fiscal 2022, in a range of $ 560 million to $ 575 million, and consolidated non-GAAP operating margin to be in a range of 6.5% to 7.5%. ”

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