La-Z-Boy Q4 2020 Earnings Report
Key Takeaways
La-Z-Boy's Q4 2020 sales decreased by 19.1% to $367.3 million due to COVID-19 impacts, which were partially offset by a one-time rebate of previously paid China tariffs. GAAP EPS was $0.05, while non-GAAP EPS was $0.49. The company responded to the pandemic with a decisive action plan by temporarily furloughing 70% of their workforce and dramatically reducing all other cash expenditures to preserve liquidity.
Consolidated sales decreased 19.1% to $367.3 million due to the COVID-19 pandemic.
GAAP diluted EPS was $0.05, while non-GAAP diluted EPS was $0.49.
The company generated $44.5 million in cash from operating activities.
La-Z-Boy closed its Newton, Mississippi manufacturing facility and reduced its global workforce by approximately 10%.
La-Z-Boy
La-Z-Boy
La-Z-Boy Revenue by Segment
Forward Guidance
La-Z-Boy is seeing strong early demand as furniture retailers and La-Z-Boy Furniture Galleries® stores have reopened. Manufacturing facilities have ramped from zero production at the end of April and are moving toward 80% of prior-year production as we head into July.
Positive Outlook
- Strong early demand as retailers and La-Z-Boy Furniture Galleries® stores have reopened
- Manufacturing facilities have ramped up production
- The company has a solid cash position
- Successful management through the early stages of the crisis
- Potential for market share gains as the demand environment improves
Challenges Ahead
- The trajectory of sales and earnings growth for the last two months of the year were significantly impacted by COVID-19 and mandated retail closures across North America.
- Majority of retailers, including company-owned La-Z-Boy Furniture Galleries® stores, closed for at least the last four weeks of our quarter, and most closures extended into the first quarter of fiscal 2021.
- The company temporarily closed the majority of our manufacturing operations, and managed all other expenses, including temporarily furloughing 70% of our workforce and dramatically reducing all other cash expenditures to preserve liquidity.
- Decision to permanently close Newton, Mississippi manufacturing facility
- Reduction of the global workforce by approximately 10%
Revenue & Expenses
Visualization of income flow from segment revenue to net income