Download PDF

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.

Show Full description

1.b. Last Insights on LZB

La-Z-Boy's recent performance was driven by strong Q2 earnings, with revenue reaching $522.5 million, slightly above analyst estimates. The company's retail segment written sales increased 4%, while same-store sales trends improved sequentially. A 15-store acquisition in the southeast U.S. region added an estimated $80 million in annual retail sales. The company also announced a 10% increase in quarterly dividend to $0.242, marking the 5th consecutive year of double-digit increases. According to a recent report, La-Z-Boy has minimal tariff exposure, which shields its margins, and a consensus price target of $41, implying significant upside potential.

1.c. Company Highlights

2. La-Z-Boy's Q2 FY2026 Earnings: A Strong Performance Amidst Strategic Transformation

La-Z-Boy Incorporated reported a solid fiscal 2026 second quarter, with total delivered sales of $522 million, up slightly from the prior year. The company's GAAP operating margin was 6.9%, and adjusted operating margin was 7.1%. Earnings per share (EPS) came in at $0.71, beating analyst estimates of $0.52. The strong financial performance was driven by growth in the core North American La-Z-Boy Wholesale business, with the Wholesale segment delivering sales growing 2% year-over-year.

Publication Date: Nov -24

📋 Highlights
  • Total Delivered Sales Growth: Revenues rose to $522 million, reflecting a slight increase over the prior year, driven by a 2% growth in the Wholesale segment.
  • Operating Margin Strength: GAAP operating margin stabilized at 6.9%, while adjusted operating margin improved to 7.1%, supported by cost efficiencies.
  • Strong Cash Flow and Dividend Growth: Generated $50 million in operating cash flow (triple prior year), funding a 10% dividend increase for the fifth consecutive year.
  • Strategic Expansion and Acquisitions: Opened 5 new stores (15 total in 12 months) and acquired a 15-store network, projected to add $80 million in annual sales.
  • Margin Improvement Initiatives: Strategic actions, including store acquisitions and supply chain optimization, expected to boost adjusted operating margins by 75–100 basis points despite a $30 million sales decrease.

Operational Highlights

The company continued to expand its retail presence, opening 5 new company-owned stores in the quarter and closing 3, bringing the total to 15 new stores opened in the last 12 months. La-Z-Boy also completed the acquisition of a 15-store network in the Southeast U.S. region, which is expected to add $80 million in annual retail sales. The company remains committed to its Century Vision strategy, focusing on its core, vertically integrated North American upholstery business.

Financial Performance

La-Z-Boy generated strong operating cash flow of $50 million for the quarter, triple the comparable period last year. The company's effective tax rate was 26.7%, and it ended the quarter with $339 million in cash and no externally-funded debt. Consolidated adjusted gross margin increased 10 basis points versus the prior year, driven by lower input costs and improved sourcing.

Outlook and Valuation

Looking ahead, La-Z-Boy expects fiscal third quarter sales to be in the range of $525 million to $545 million, a growth of 1% to 4% year-over-year. The company's current valuation metrics, including a P/E Ratio of 17.2 and an EV/EBITDA of 7.77, suggest that the market is pricing in moderate growth expectations. Analysts estimate next year's revenue growth at 2.1%, which is slightly higher than the current year's growth rate.

Strategic Initiatives

La-Z-Boy is undergoing strategic initiatives to transform its distribution network, home delivery program, and manufacturing investments. These efforts are expected to result in a $30 million net sales decrease but a significant adjusted operating margin improvement of 75 to 100 basis points. The company is also exploring partnerships to provide casegoods products to its customers, as it believes that owning the entire design and creation of casegoods is not its core competency.

Capital Allocation

The company remains committed to its capital allocation target, reinvesting 50% of operating cash flow back into the business and returning 50% to shareholders through dividends and share repurchases. La-Z-Boy has returned a double-digit increase to its dividend for the fifth consecutive year, demonstrating strong financial footing and confidence in the business.

3. NewsRoom

Card image cap

Bull of the Day: LaZBoy (LZB)

Nov -25

Source: zacks.com

Card image cap

Best Momentum Stocks to Buy for Nov. 24

Nov -24

Source: zacks.com

Card image cap

La-Z-Boy Holdings: A Tariff Arbitrage Breakout With Double-Digit Upside Ahead

Nov -19

Source: seekingalpha.com

Card image cap

La-Z-Boy Incorporated (LZB) Q2 2026 Earnings Call Transcript

Nov -19

Source: seekingalpha.com

Card image cap

La-Z-Boy shares surge on strong quarterly report

Nov -19

Source: proactiveinvestors.com

Card image cap

La-Z-Boy (LZB) Q2 Earnings and Revenues Top Estimates

Nov -18

Source: zacks.com

Card image cap

La-Z-Boy Second-Quarter Sales Rise on Retail, Wholesale Growth

Nov -18

Source: wsj.com

Card image cap

La-Z-Boy Incorporated Reports Solid Second Quarter Results; Advances Largest Ever Retail Acquisition And Transformative Strategic Initiatives

Nov -18

Source: globenewswire.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: 6.2/10

Value: 6.1

Growth: 3.8

Quality: 6.4

Yield: 10.0

Momentum: 4.0

Volatility: 6.7

1-Year Total Return ->

View Full Report
Stock-Card
Flexsteel

A-Score: 5.8/10

Value: 8.4

Growth: 7.1

Quality: 6.0

Yield: 4.0

Momentum: 6.5

Volatility: 2.7

1-Year Total Return ->

View Full Report
Stock-Card
Crown Crafts

A-Score: 5.7/10

Value: 9.1

Growth: 2.8

Quality: 3.6

Yield: 10.0

Momentum: 1.0

Volatility: 8.0

1-Year Total Return ->

View Full Report
Stock-Card
La-Z-Boy

A-Score: 5.3/10

Value: 6.8

Growth: 5.2

Quality: 5.4

Yield: 5.0

Momentum: 3.0

Volatility: 6.3

1-Year Total Return ->

View Full Report
Stock-Card
Virco Mfg

A-Score: 4.2/10

Value: 6.7

Growth: 8.3

Quality: 5.5

Yield: 1.0

Momentum: 0.0

Volatility: 3.7

1-Year Total Return ->

View Full Report
Stock-Card
Hamilton Beach Brands

A-Score: 4.2/10

Value: 6.2

Growth: 5.6

Quality: 5.0

Yield: 6.0

Momentum: 0.0

Volatility: 2.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

38.63$

Current Price

38.63$

Potential

-0.00%

Expected Cash-Flows