Upholstery manufacturer La-Z-Boy Incorporated has reported a growth in first quarter sales.
According to its latest trading update for Q1 ended 27 July 2024, total sales rose 3% to $496m from $482m in 2023.
Operating margin was 6.5% for the quarter, down from 7.2%, while net income resulted at $26.8m, slightly down from $27.9m against the same period last year.
Written sales remained “steady”, with first quarter total written sales for the Retail segment (company-owned La-Z-Boy Furniture Galleries®) up 4% versus a year ago, and written same-store sales down 3% versus a year ago. Written same-store sales for the entire La-Z-Boy Furniture Galleries® network also decreased 3% versus the year ago period.
Wholesale revenues increased 5% to $351m, primarily due to higher delivered volume to its external customers, partially offset by lower intercompany sales to its Retail segment and lowered delivered volume in its casegoods business.
Melinda D. Whittington, President and Chief Executive Officer of La-Z-Boy Incorporated, said: “We continue to deliver positive results amidst a challenging macroeconomic backdrop. We were pleased to return to delivered sales growth in the quarter, led by our Wholesale segment, which benefited from higher delivered volume supported by Century Vision’s channel expansion strategy.
“While the Retail business currently continues to wrestle with depressed traffic trends experienced across our industry, we again delivered strong execution. Conversion rates and design average ticket sales both improved again year-over-year and our in-store teams remain laser focused on providing the highest level of customer service and showcasing our industry leading product assortment.
“Over the past five years, our Retail business has grown at an impressive 7% compound annual sales growth. Our high quality offering of comfortable, custom furniture with quick delivery is resonating in a challenging marketplace. And while we expect industry fundamentals to be volatile for the foreseeable future, we remain confident in our ability to outperform the market and gain share longer term.
“We remain committed to investing in our business for the long term, as we navigate the near-term headwinds in the furniture industry. As an iconic brand with a storied near 100-year history, we have the proven ability to adapt, with a strong balance sheet to support our strategy. Near-term market disruptions are likely to continue pressuring the fiscal year, but we are well positioned to disproportionately benefit when industry tailwinds re-emerge.
“With our Century Vision strategy, we are actively investing in growing our core Retail segment through strengthening in-store execution, opening new stores, and acquiring independent La-Z-Boy Furniture Galleries® stores when we are able, as we believe our vertically integrated model offers superior returns over the longer term. This will uniquely position us to continue to outperform the industry and grow share.”
