La-Z-Boy 2026 Q2 Earnings Beats Revenue Estimates, EPS Declines 2.8%

La-Z-Boy (LZB) reported mixed results in its fiscal 2026 Q2 earnings, with revenue exceeding expectations but earnings falling short. The company raised its quarterly dividend by 10%, signaling confidence in its strategic initiatives despite macroeconomic challenges.

La-Z-Boy’s total revenue rose 0.3% year-over-year to $522.48 million, surpassing the consensus estimate. This modest growth was driven by the Wholesale segment, which generated $369.44 million in revenue, while the Retail segment contributed $222.04 million. Corporate & Other revenue added $38.69 million, offset by a $107.69 million reduction from intersegment eliminations. The performance highlights the company’s focus on optimizing its business mix, with the Wholesale segment showing margin expansion amid a challenging market environment.

Earnings per share (EPS) declined 2.8% to $0.70 in Q2 2026, down from $0.72 in the prior year. Net income also fell by 2.9% to $28.99 million. The decline reflects margin pressures from strategic investments, including new store openings and supply chain optimizations, which temporarily impacted profitability. Despite these challenges, the company’s adjusted operating margin for the Wholesale segment improved by 130 basis points, driven by lower warranty costs and operational efficiencies.

The stock price of La-Z-Boy edged up 1.93% on the day of the earnings release but faced broader volatility, dropping 4.98% for the week and 8.11% month-to-date. A backtest of the strategy to buy shares following a revenue beat showed a 5.6% gain over 30 days, supported by the company’s dividend growth and positive guidance. The 10% dividend increase, now the fifth consecutive double-digit raise, enhances total returns for long-term investors.

The strategy of buying La-Z-Boy (LZB) shares when revenue beats and holding for 30 days has shown favorable performance. Recent results revealed a revenue beat of $522.48 million, surpassing estimates, and a 5.6% stock price surge post-earnings. The dividend hike and third-quarter guidance of $525–$545 million sales align with market expectations, reflecting confidence in the company’s Century Vision initiatives. Strategic moves, such as acquiring 15 stores and exiting non-core businesses, are expected to strengthen margins and market position. Analysts remain cautiously optimistic, rating the stock as a “Hold” but acknowledging growth potential.

CEO Commentary

Melinda D. Whittington, CEO of La-Z-Boy, emphasized progress in the Wholesale segment and margin expansion despite a “choppy landscape.” She highlighted investments in 15 new stores, distribution transformation, and the southeast U.S. acquisition as part of the Century Vision strategy. The CEO also noted proactive steps to close the UK facility and exit non-core businesses, aiming to boost operating efficiency.

Guidance

La-Z-Boy projected fiscal third-quarter sales of $525–$545 million, reflecting 1–4% year-over-year growth. Adjusted operating margin is expected to range between 5.0–6.5%, accounting for friction costs from portfolio optimizations and macroeconomic uncertainty. The guidance underscores the company’s focus on long-term margin improvement through strategic realignments.

Additional News

1. Dividend Hike: La-Z-Boy raised its quarterly dividend by 10%, the fifth consecutive double-digit increase, to $0.242 per share, payable December 15.

2. Acquisition Activity: The company completed the acquisition of a 15-store network in the southeastern U.S., part of its Century Vision strategy to expand retail reach.

3. Portfolio Optimization: Plans to exit non-core wholesale casegoods and upholstery businesses and close its UK manufacturing facility were announced, expected to reduce sales by $30 million but improve margins by 75–100 basis points.