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1. Company Snapshot

1.a. Company Description

La-Z-Boy Incorporated manufactures, markets, imports, exports, distributes, and retails upholstery furniture products, accessories, and casegoods furniture products in the United States, Canada, and internationally.It operates through Wholesale, Retail, Corporate and Other segments.The Wholesale segment manufactures and imports upholstered furniture, such as recliners and motion furniture, sofas, loveseats, chairs, sectionals, modulars, ottomans, and sleeper sofas; and imports, distributes, and retails casegoods (wood) furniture, including occasional pieces, bedroom sets, dining room sets, and entertainment centers.


This segment sells its products directly to La-Z-Boy Furniture Galleries stores, operators of La-Z-Boy Comfort Studio locations, England Custom Comfort Center locations, dealers, and other independent retailers.The company's Retail segment sells upholstered furniture, casegoods, and other accessories to the end consumer through its retail network.This segment operates a network of 161 company-owned La-Z-Boy Furniture Galleries stores.


La-Z-Boy Incorporated also produces reclining chairs; and manufactures and distributes residential furniture.Its Corporate and Other segment sells the products through its website.The company was formerly known as La-Z-Boy Chair Company and changed its name to La-Z-Boy Incorporated in 1996.


La-Z-Boy Incorporated was founded in 1927 and is based in Monroe, Michigan.

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1.b. Last Insights on LZB

Declining profit margins and light Q4 guidance are negatively impacting La-Z-Boy's outlook. Despite beating earnings estimates, the company's GAAP operating margin of 5.5% and adjusted operating margin of 6.1% are concerning. Additionally, the planned closure of its U.K. manufacturing facility and sale of wholesale casegoods businesses may lead to restructuring challenges, according to the company's Q3 2026 earnings report.

1.c. Company Highlights

2. La-Z-Boy's Q3 Results: A Strong Performance Amidst Challenging Industry Conditions

La-Z-Boy reported a robust financial performance in its fiscal 2026 third quarter, with total delivered sales increasing 4% year-over-year to $542 million. The company's GAAP operating margin was 5.5%, while the adjusted operating margin was 6.1%, towards the high end of its guidance range. Earnings per share (EPS) came in at $0.61, beating analyst estimates of $0.59. The company's strong cash generation continued, with $89 million in operating cash flow, a 57% increase from the previous year.

Publication Date: Mar -04

📋 Highlights
  • Sales Growth:: Total delivered sales rose to $542 million, a 4% increase from the prior year.
  • Margin Performance:: Adjusted operating margin reached 6.1%, near the high end of guidance, with GAAP margin at 5.5%.
  • Cash Flow Strength:: Operating cash flow surged to $89 million, a 57% rise compared to the prior year.
  • Retail Expansion:: 4 new company-owned stores opened in Q3, totaling 16 new stores in the past 12 months.
  • Balance Sheet Resilience:: Ended the quarter with $306 million in cash and no externally funded debt despite a major acquisition.

Segment Performance

The Retail segment was a key driver of growth, with both written and delivered sales increasing 11% year-over-year. The company opened four new company-owned stores during the quarter, bringing the total to 16 new stores in the last 12 months. The Wholesale business also contributed to the growth, although it was partially offset by lower delivered volume in the Joybird business. As Melinda Whittington noted, "the furniture industry and broader macroeconomic environment continue to be challenging," but the company's iconic brand and vertically integrated model are expected to drive future growth.

Margin Expansion and Cash Generation

The company's adjusted operating margin expansion was driven by its focus on cost savings and operational efficiency. Taylor Luebke mentioned that the company is targeting 75-100 basis points of margin improvement, which is expected to flow through to the bottom line. La-Z-Boy's strong cash generation is supported by its consistent operating model, with $89 million in operating cash flow and a strong balance sheet with $306 million in cash and no externally funded debt.

Valuation and Growth Prospects

La-Z-Boy's current valuation multiples are relatively reasonable, with a P/E Ratio of 17.36 and an EV/EBITDA of 8.76. Analysts estimate revenue growth at 2.1% for the next year, which is relatively modest. However, the company's focus on operational efficiency, strategic partnerships, and its iconic brand position it for potential future growth. The Dividend Yield of 2.61% and Free Cash Flow Yield of 10.85% also make the stock attractive to income investors.

Outlook and Challenges

La-Z-Boy's guidance for the fourth quarter is for an operating margin of 7.5-9%, which is down 100 basis points from last year due to near-term headwinds. However, the company remains confident in its ability to drive growth and margin improvement in the future. The company's strategic partnerships, including Slumberland and Rooms To Go, are expected to continue to drive growth, while the Joybird business is being right-sized to grow profitably.

3. NewsRoom

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La-Z-Boy Incorporated (NYSE:LZB) Receives $42.50 Consensus PT from Analysts

Mar -05

Source: defenseworld.net

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La-Z-Boy Incorporated to Present at Raymond James 47th Annual Institutional Investors Conference

Feb -26

Source: globenewswire.com

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Michael Adam Leggett Sells 2,200 Shares of La-Z-Boy (NYSE:LZB) Stock

Feb -25

Source: defenseworld.net

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La-Z-Boy Is Relaxed And Comfortable Despite Uncomfortable Market Conditions

Feb -19

Source: seekingalpha.com

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La-Z-Boy Incorporated (LZB) Q3 2026 Earnings Call Transcript

Feb -18

Source: seekingalpha.com

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Why La-Z-Boy Stock Just Dropped

Feb -18

Source: fool.com

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La-Z-Boy (LZB) Q3 Earnings and Revenues Surpass Estimates

Feb -17

Source: zacks.com

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La-Z-Boy Expects Adverse Weather to Hurt Quarterly Results

Feb -17

Source: wsj.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (0.85%)

6. Segments

Wholesale

Expected Growth: 1%

La-Z-Boy's wholesale segment growth is driven by increasing demand for comfortable and stylish furniture, strategic partnerships with retailers, and expansion into new markets. Additionally, the company's focus on product innovation, quality, and customer service has led to higher sales volumes and market share gains.

Retail

Expected Growth: 1%

La-Z-Boy's Retail segment growth is driven by increasing consumer spending on home furnishings, strategic store openings and remodels, and a focus on e-commerce and digital marketing. Additionally, the company's efforts to enhance the customer experience, expand its product offerings, and improve operational efficiency are contributing to its growth.

Eliminations

Expected Growth: 0%

La-Z-Boy Incorporated's eliminations with 0% growth are driven by stagnant sales, flat operating margins, and lack of significant acquisitions or divestitures. The company's focus on cost-cutting initiatives and supply chain optimization has not yielded significant growth. Additionally, intense competition in the furniture industry and flat consumer spending have contributed to the stagnant eliminations.

Corporate and Other

Expected Growth: 1%

La-Z-Boy's Corporate and Other segment growth is driven by strategic investments in e-commerce and digital marketing, expansion of its retail footprint, and increased demand for its luxury and outdoor furniture products, resulting in a 1% growth rate.

7. Detailed Products

La-Z-Boy Recliners

La-Z-Boy recliners are designed for comfort and relaxation, offering a range of styles, fabrics, and features to fit any home decor.

La-Z-Boy Sofas and Loveseats

La-Z-Boy sofas and loveseats offer stylish comfort and versatility, available in a variety of styles, fabrics, and configurations.

La-Z-Boy Sectionals

La-Z-Boy sectionals provide ample seating and comfort, customizable to fit any room size or shape.

La-Z-Boy Sleepers

La-Z-Boy sleepers offer comfortable seating by day and a comfortable bed by night, perfect for small spaces or guest rooms.

Hampton Furniture

Hampton furniture offers stylish, affordable, and quality-driven furniture for the whole home, including living rooms, dining rooms, and bedrooms.

England Furniture

England Furniture offers high-quality, affordable, and stylish furniture for the whole home, with a focus on comfort and durability.

American Drew Furniture

American Drew furniture offers high-end, stylish, and quality-driven furniture for the whole home, with a focus on craftsmanship and design.

8. La-Z-Boy Incorporated's Porter Forces

Forces Ranking

Threat Of Substitutes

La-Z-Boy faces moderate threat from substitutes, as consumers have alternative options for furniture and home decor. However, the company's strong brand reputation and quality products help mitigate this threat.

Bargaining Power Of Customers

La-Z-Boy's customers have limited bargaining power due to the company's strong brand presence and wide distribution network. This reduces the likelihood of customers negotiating prices or demanding customized products.

Bargaining Power Of Suppliers

La-Z-Boy's suppliers have moderate bargaining power, as the company relies on a few key suppliers for raw materials. However, the company's large scale of operations and long-term contracts help mitigate this risk.

Threat Of New Entrants

The threat of new entrants is low for La-Z-Boy, as the company has a strong brand presence and established distribution network. New entrants would face significant barriers to entry, including high capital expenditures and marketing costs.

Intensity Of Rivalry

The furniture industry is highly competitive, with many established players vying for market share. La-Z-Boy faces intense rivalry from competitors such as Ashley Furniture and Restoration Hardware, which can lead to pricing pressures and advertising wars.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 32.13%
Debt Cost 3.95%
Equity Weight 67.87%
Equity Cost 9.99%
WACC 8.04%
Leverage 47.35%

11. Quality Control: La-Z-Boy Incorporated passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Ethan Allen

A-Score: 6.1/10

Value: 6.8

Growth: 3.8

Quality: 6.5

Yield: 10.0

Momentum: 2.5

Volatility: 7.0

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Crown Crafts

A-Score: 5.9/10

Value: 9.6

Growth: 2.7

Quality: 3.8

Yield: 10.0

Momentum: 0.5

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La-Z-Boy

A-Score: 5.0/10

Value: 6.2

Growth: 5.2

Quality: 5.4

Yield: 4.0

Momentum: 3.5

Volatility: 5.7

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Flexsteel

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Growth: 7.1

Quality: 6.0

Yield: 4.0

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Hamilton Beach Brands

A-Score: 4.8/10

Value: 7.7

Growth: 5.4

Quality: 6.1

Yield: 6.0

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Virco Mfg

A-Score: 3.9/10

Value: 5.1

Growth: 8.2

Quality: 3.6

Yield: 2.0

Momentum: 0.0

Volatility: 4.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

31.6$

Current Price

31.6$

Potential

-0.00%

Expected Cash-Flows