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- **Revenue Growth**: Total delivered sales of $522 million, with Wholesale segment up 2% and Retail segment showing sequential improvement in same-store sales.
- **Strategic Acquisitions**: Completed 15-store acquisition, adding $80 million in annual sales, and exited noncore businesses to focus on core upholstery business.
- **Margin Expansion**: Adjusted operating margin of 7.1%, driven by Wholesale segment efficiency and cost control. Q3 guidance includes 50-75 basis points of margin improvement from supply chain transformation.
- **Cash Flow and Dividends**: Generated $50 million in operating cash flow, triple prior year. Announced 10% dividend increase, marking five consecutive years of growth.
- **Risk Management**: 90% of products manufactured in the U.S., mitigating tariff risks, with nominal pricing adjustments to offset remaining exposure.


**【Management Opening Remarks】**
- Mark Becks provided an overview of the call, emphasizing forward-looking statements and the availability of the earnings release and replay. He highlighted the company's strong financial position and commitment to shareholder returns.

**【CEO Summary Section】**
- **Q2 2026 Results**: Total delivered sales of $522 million, up slightly year-over-year. Retail segment delivered sales increased slightly, with total written sales up 4% and same-store sales improving sequentially. Wholesale segment delivered sales grew 2%, driven by North American La-Z-Boy business.
- **Strategic Initiatives**: Completed acquisition of 15 independent stores, adding $80 million in annual retail sales. Exited noncore businesses (Kincaid casegoods, American Drew casegoods) and announced closure of U.K. manufacturing facility. Consolidated 2 distribution centers as part of a multiyear supply chain transformation.
- **Financial Highlights**: GAAP operating margin of 6.9%, adjusted operating margin of 7.1%. Generated $50 million in operating cash flow, triple the prior year. Announced 10% dividend increase, marking five consecutive years of double-digit growth.
- **Market Positioning**: Named to Forbes' 2026 Best Customer Service list and rolled out new brand identity, generating positive consumer response.

**【CFO Financial Commentary】**
- **Consolidated Results**: GAAP EPS of $0.70, adjusted EPS of $0.71, flat year-over-year. Consolidated adjusted gross margin increased 10 basis points due to lower input costs, partially offset by supply chain friction costs.
- **Segment Performance**: Retail segment margin deleveraged due to lower same-store sales and new store investments. Wholesale segment margin improved 160 basis points, driven by lower warranty expenses and operational efficiency gains.
- **Liquidity and Capital Allocation**: Ended the quarter with $339 million in cash. Generated $50 million in operating cash flow, up from $17 million prior year. Capital expenditures of $20 million for new stores and supply chain investments. Returned $31 million to shareholders via dividends and share repurchases.
- **Q3 Guidance**: Sales expected in the range of $525 million to $545 million (1% to 4% YoY growth). Adjusted operating margin expected to be 5% to 6.5%, reflecting friction costs from portfolio optimization and macroeconomic uncertainty.

**【Q&A Key Highlights】**
- **Geographic Sales**: Canada remains challenging due to trade tariffs, but no significant regional disparities in the U.S.
- **Pricing Strategy**: Implemented nominal pricing adjustments to offset tariffs, with 90% of products manufactured in the U.S. Volume in the North American wholesale business was flat year-over-year.
- **Friction Costs**: Distribution transformation and portfolio optimization initiatives will impact Q3 margins, but long-term benefits include 50-75 basis points of margin improvement.
- **Inventory Management**: Tight working capital management reduced inventory levels, with no impact on in-stock rates.
- **Capital Allocation**: Fiscal 2026 capital spending tilted toward business reinvestment (e.g., distribution transformation, new stores). Dividend increases and share buybacks remain priorities for returning cash to shareholders.


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

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

LZB

LZB fundamentals

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