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Jan 22, 2022
La-Z-Boy Q3 2022 Earnings Report
Reported a strong increase in consolidated sales, driven by ongoing capacity increases and pricing actions, but faced challenges due to supply chain volatility and COVID-related impacts.
Key Takeaways
La-Z-Boy Incorporated reported a 22% increase in consolidated sales for the fiscal 2022 third quarter, driven by strong demand. However, the quarter was marked by supply chain volatility, COVID absenteeism, and challenges in hiring and training new employees, which impacted manufacturing efficiency and profit margins.
Consolidated sales increased 22% to $572 million.
Written same-store sales for the La-Z-Boy Furniture Galleries® network increased 3%.
GAAP diluted EPS increased to $0.65, while non-GAAP diluted EPS decreased to $0.65.
The company returned $32 million to shareholders through share repurchases and dividends.
Revenue by Segment
Forward Guidance
La-Z-Boy expects delivered sales per week in the fourth quarter to be flat to slightly up versus the third quarter. Consolidated non-GAAP operating margin is expected to strengthen to the range of 7.5% to 8.5%.
Positive Outlook
- Demand trends remain strong.
- Backlog will support strengthening delivered sales as capacity increases.
- Fiscal fourth quarter will benefit from containing 14 weeks compared to the third quarter which contained only 12 weeks.
- Sales and operating margin performance will improve incrementally as increases in capacity allow the company to more fully meet demand.
- Fixed costs will be leveraged with higher volume.
Challenges Ahead
- Near-term production gains will be slower than previously expected.
- Global supply chain disruptions continue and disproportionately impact higher-end products.
- Casegoods import operations are expected to normalize during the first half of fiscal 2023.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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