La-Z-Boy Incorporated
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
We have prepared this Management’s Discussion and Analysis as an aid to understanding our financial results. It should be read in conjunction with the accompanying Consolidated Financial Statements and related Notes to Consolidated Financial Statements. After a cautionary note regarding forward-looking statements, we begin with an introduction to our key businesses and then provide discussions of our results of operations, liquidity and capital resources, and critical accounting policies.
Cautionary Note Regarding Forward-Looking Statements
La-Z-Boy Incorporated and its subsidiaries (individually and collectively, "we," "our," "us," "La-Z-Boy" or the "Company") make "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, forward-looking statements include information concerning expectations, projections or trends relating to our results of operations, financial results, financial condition, strategic initiatives and plans, acquisitions, expenses, dividends, share repurchases, liquidity, use of cash and cash requirements, borrowing capacity, investments, future economic performance, and our business and industry.
Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements may include words such as "aim," "anticipates," "believes," "continues," "estimates," "expects," "feels," "forecasts," "hopes," "intends," "likely," "non-recurring," "one-time," "outlook," "plans," "projects," "seeks," "short-term," "target," "unusual," or words of similar meaning, or future or conditional verbs, such as "will," "should," "could," or "may." A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. You should not place undue reliance on forward-looking statements, which speak to our views only as of the date of this report. These forward-looking statements are all based on currently available operating, financial, and competitive information and are subject to various risks and uncertainties, many of which are unforeseeable and beyond our control. Additional risks and uncertainties that we do not presently know about or that we currently consider to be immaterial may also affect our business operations and financial performance.
Our actual future results and trends may differ materially from those we anticipate depending on a variety of factors, including, but not limited to, the risks and uncertainties discussed in our Annual Report for the fiscal year ended April 26, 2025, under Item 1A, "Risk Factors" and Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and in our other filings with the Securities and Exchange Commission ("SEC"). Given these risks and uncertainties, you should not rely on forward-looking statements as a prediction of actual results. Any or all of the forward-looking statements contained in our Annual Report for the fiscal year ended April 26, 2025 or any other public statement made by us, including by our management, may turn out to be incorrect. We are including this cautionary note to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or for any other reason.
Introduction
Our Business
We are the leading global producer of reclining chairs and one of the largest manufacturers/distributors of residential furniture in the United States. The La-Z-Boy Stores retail network is the third largest retailer of single-branded furniture in the United States. We manufacture, market, import, export, distribute and retail upholstery furniture products under the La-Z-Boy®, England, Kincaid®, and Joybird® tradenames. In addition, we import, distribute and retail accessories and casegoods (wood) furniture products under the Kincaid®, American Drew®, Hammary®, and Joybird® tradenames.
As of January 24, 2026, our supply chain operations included the following:
•Five major manufacturing locations and 11 distribution centers in the United States and three facilities in Mexico to support our speed-to-market and customization strategy
•A logistics company that distributes a portion of our products in the United States
•An upholstery manufacturing business in the United Kingdom. As of the end of the third quarter of fiscal 2026, we are in the process of closing this business and we expect to cease production by the end of fiscal 2026.
•A wholesale sales office that is responsible for distribution of our product in the United Kingdom and Ireland
•A global trading company in Hong Kong that helps us manage our Asian supply chain by establishing and maintaining relationships with our Asian suppliers, as well as identifying efficiencies and savings opportunities
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We also participate in two consolidated joint ventures in Thailand that support our international businesses: one that operates a manufacturing facility and another that operates a wholesale sales office. Additionally, we have contracts with several suppliers in Asia to produce products that support our pure import model for casegoods.
We sell our products through multiple channels: to furniture retailers or distributors in the United States, Canada, and approximately 50 other countries, including the United Kingdom, China, Australia, South Korea and New Zealand, directly to consumers through retail stores that we own and operate, and through our websites, www.la-z-boy.com and www.joybird.com.
•The centerpiece of our retail distribution strategy is our network of 374 La-Z-Boy Stores, over 500 La-Z-Boy Comfort Studio® locations, and nearly 900 La-Z-Boy branded space locations, each dedicated to marketing our La-Z-Boy branded products. We consider this dedicated space to be "proprietary."
◦La-Z-Boy Stores help consumers furnish their homes by combining the style, comfort, and quality of La-Z-Boy furniture with our available design services. We own 226 of the La-Z-Boy Stores, while the remainder are independently owned and operated.
◦La-Z-Boy Comfort Studio® locations are defined spaces within larger independent retailers that are dedicated to displaying and selling La-Z-Boy branded products, while La-Z-Boy branded space locations display a curated selection of La-Z-Boy branded products within larger independent dealers. All La-Z-Boy Comfort Studio® locations and La-Z-Boy branded space locations are independently owned and operated.
◦In total, we have approximately 7.7 million square feet of proprietary floor space dedicated to selling La-Z-Boy branded products in North America within our La-Z-Boy Stores and La-Z-Boy Comfort Studio® locations.
◦We also have approximately 2.6 million square feet of floor space outside of North America dedicated to selling La-Z-Boy branded products.
•Our other brands, England, American Drew, Hammary, and Kincaid enjoy distribution through many of the same outlets, with over half of Hammary’s sales originating through the La-Z-Boy Store network.
◦Kincaid and England have their own dedicated proprietary in-store programs with 685 outlets and approximately 2.0 million square feet of proprietary floor space.
◦During the second quarter of fiscal 2026, the Company committed to a plan to dispose a portion of our Casegoods wholesale business. Refer to Note 4, Assets Held for Sale, to our consolidated financial statements for further information.
•Joybird sells product online and has 15 small-format stores in key markets.
Century Vision Strategy
Our goal is to deliver value to our shareholders over the long term by executing our Century Vision, our strategic plan for growth to our centennial year in 2027, in which we aim to grow sales and market share and strengthen our operating margins. The foundation of our strategic plan is to drive disproportionate growth of our two consumer brands, La-Z-Boy and Joybird, by delivering the transformational power of comfort with a consumer-first approach. We plan to drive growth in the following ways:
Expanding the La-Z-Boy brand reach
•Leveraging our connection to comfort and reinvigorating our brand with a consumer focus and expanded omni-channel presence. Our strategic initiatives to leverage and reinvigorate our iconic La-Z-Boy brand center on a renewed focus on leveraging the compelling La-Z-Boy comfort message, accelerating our omni-channel offering, and identifying additional consumer-base growth opportunities. We leverage our consumer insights to develop and deliver on-trend upholstered furniture, particularly in the motion and reclining categories. We launched our brand campaign and marketing platform in fiscal 2024, Long Live the Lazy, with compelling, consumer inspired, messaging designed to increase recognition and consideration of the brand. We expect that this messaging will enhance the appeal of our brand with a broader consumer base. Further, our goal is to connect with consumers along their purchase journey through multiple means, whether online or in person. We are driving change throughout our digital platforms to improve the user experience, with a specific focus on the ease with which customers browse through our broad product assortment, customize products to their liking, find stores to make a purchase, or purchase at www.la-z-boy.com.
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•Growing our La-Z-Boy Store network. We expect our strategic initiatives in this area to generate growth in our Retail segment through an increased company-owned store count and in our Wholesale segment as our proprietary distribution network expands. We are not only focused on growing the number of locations, but also on upgrading existing store locations to our new concept designs. We are prioritizing growth of our company-owned Retail business by opportunistically acquiring existing La-Z-Boy Stores and opening new La-Z-Boy Stores where we see opportunity for growth, or where we believe we have opportunities for further market penetration.
•Expanding the reach of our wholesale distribution channels. Consumers experience the La-Z-Boy brand in many channels including the La-Z-Boy Store network, the La-Z-Boy Comfort Studio® locations, our store-within-a-store format, and La-Z-Boy branded space locations. While consumers increasingly interact with the brand digitally, our consumers also demonstrate an affinity for visiting our stores to shop, allowing us to frequently deliver the flagship La-Z-Boy Store, La-Z-Boy Comfort Studio®, or La-Z-Boy branded space experience and provide design services. In addition to our branded distribution channels, approximately 1,900 other dealers sell La-Z-Boy products, which include some of the best-known names in the industry, providing us the benefit of multi-channel distribution. We believe there is significant growth potential for our consumer brands through these retail channels.
Profitably growing the Joybird brand
•Profitably growing the Joybird brand with a digital-first consumer experience. Joybird is a leading omni-channel, direct to consumer retailer and manufacturer of upholstered furniture. We believe that Joybird is a brand with significant potential and our strategic initiatives in this area focus on fueling profitable growth through the opening of additional small-format stores in key markets, an increase in digital marketing spend to drive awareness and customer acquisition, ongoing investments in technology, and an expansion of product assortment.
Enhancing our enterprise capabilities
•Enhancing our enterprise capabilities to support the growth of our consumer brands and enable potential acquisitions for growth. Key to successful growth is ensuring we have the capabilities to support that growth, including an agile supply chain, modern technology for consumers and employees, and by delivering a human-centered employee experience. Through our Century Vision strategic plan, we have several initiatives focused on enhancing these capabilities with a consumer-first focus.
Reportable Segments
Our reportable operating segments include the Retail segment and the Wholesale segment.
•Retail Segment. Our Retail segment consists of one operating segment comprised of our 226 company-owned La-Z-Boy Stores. The Retail segment sells primarily upholstered furniture, in addition to some casegoods and other home furnishings accessories, to end consumers through these stores.
•Wholesale Segment. Our Wholesale segment consists primarily of four operating segments: La-Z-Boy, our largest operating segment, our England subsidiary, our Casegoods operating segment that sells furniture under three brands (American Drew®, Hammary®, and Kincaid®), and our international operating segment, which includes our international La-Z-Boy wholesale and manufacturing businesses. We aggregate these operating segments into one reportable segment because they are economically similar and meet the other aggregation criteria for determining reportable segments. Our Wholesale segment manufactures and imports upholstered furniture, such as recliners and motion furniture, sofas, loveseats, chairs, sectionals, modulars, ottomans and sleeper sofas and imports casegoods (wood) furniture such as bedroom sets, dining room sets, entertainment centers and occasional pieces. The Wholesale segment sells directly to La-Z-Boy Stores, operators of La-Z-Boy Comfort Studio® and branded space locations, England Custom Comfort Center locations, major dealers, and a wide cross-section of other independent retailers.
•Corporate and Other. Corporate and Other includes the shared costs for corporate functions, including human resources, information technology, finance and accounting, and legal, in addition to revenue generated through royalty agreements with companies licensed to use the La-Z-Boy® brand name on various products. We consider our corporate functions to be other business activities and have aggregated them with our other insignificant operating segments, including our global trading company in Hong Kong and Joybird, an omni-channel retailer that manufactures upholstered furniture, such as sofas, loveseats, chairs, ottomans, sleeper sofas and beds, and also imports casegoods (wood) furniture, such as occasional tables and other accessories. Joybird sells to the end consumer online through its website, www.joybird.com, and through small-format stores in key markets. None of the operating segments included in Corporate and Other meet the requirements of reportable segments.
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Results of Operations
Fiscal 2026 Third Quarter Compared with Fiscal 2025 Third Quarter
La-Z-Boy Incorporated
| Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||
| (Unaudited, amounts in thousands, except percentages) | 1/24/2026 | 1/25/2025 | % Change | 1/24/2026 | 1/25/2025 | % Change | ||||||||||||||||||||||||||||
| Sales | $ | 541,588 | $ | 521,777 | 3.8% | $ | 1,556,297 | $ | 1,538,336 | 1.2 | % | |||||||||||||||||||||||
| Operating income | 29,811 | 35,168 | (15.2)% | 87,977 | 106,310 | (17.2) | % | |||||||||||||||||||||||||||
| Operating margin | 5.5% | 6.7% | 5.7% | 6.9% | ||||||||||||||||||||||||||||||
Sales
Consolidated sales increased $19.8 million, or 3.8%, and $18.0 million, or 1.2% in the third quarter and first nine months of fiscal 2026, respectively, compared with the same periods a year ago, led by incremental sales from our retail store acquisitions that occurred in fiscal 2025 and 2026 along with sales from our retail store expansion. Sales during the first nine months of fiscal 2026 further benefitted from growth in our core North America La-Z-Boy branded wholesale business driven by strategic pricing and surcharge actions. These increases were partially offset by lower delivered same-store sales in our Retail segment, along with lower delivered volume in our Casegoods and Joybird businesses.
Operating Margin
Operating margin, which is calculated as operating income as a percentage of sales, decreased 120 basis points in both the third quarter and first nine months of fiscal 2026, respectively, compared with the same periods a year ago.
•Gross margin, which is calculated as gross profit as a percentage of sales, decreased 120 basis points and 60 basis points in the third quarter and first nine months of fiscal 2026, respectively, compared with the same periods a year ago.
◦During the third quarter of fiscal 2026, we recorded $3.4 million of severance expense in connection with the planned closure of the United Kingdom manufacturing business and a $3.0 million impairment charge to adjust inventory held for sale to its fair value on the upholstery portion of our Casegoods business, both of which reduced gross margin in the third quarter and first nine months of fiscal 2026, compared with the same periods a year ago.
◦Higher distribution costs, primarily related to our distribution and home delivery transformation, drove an additional decrease in gross margin in the third quarter and first nine months of fiscal 2026, compared with the same periods a year ago.
◦Partially offsetting the items above, changes in our consolidated mix drove an increase in gross margin in the third quarter and first nine months of fiscal 2026, respectively, due to growth in our Retail segment, which has a higher gross margin than our Wholesale segment.
•SG&A expenses as a percentage of sales was flat and increased 60 basis points in the third quarter and first nine months of fiscal 2026, respectively, compared with the same periods a year ago.
◦In the third quarter and first nine months of fiscal 2026, SG&A expense as a percentage of sales:
▪Increased due to fixed cost deleverage in our Retail segment from lower delivered same-store sales combined with higher selling expenses and fixed costs resulting from our retail store expansion in support of our long-term strategy of growing our Retail segment.
▪Decreased due to a $3.9 million gain recognized in the third quarter of fiscal 2026, as we completed the sale of our Casegoods headquarters building and related fixed assets.
◦In the third quarter of fiscal 2026, changes in our consolidated mix also drove an increase in SG&A expense as a percentage of sales compared with the same period a year ago, due to growth in our Retail segment, which has a higher SG&A expense as a percentage of sales than our Wholesale segment.
◦In the first nine months of fiscal 2026, SG&A expense as a percentage of sales also benefited from lower warranty expense due to a reduction in our warranty liability driven by a change in which we provide our external dealers an upfront service allowance for certain labor and delivery costs that they provide under our Wholesale warranty program for La-Z-Boy products that they sell and have previously sold.
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We discuss each segment’s results in the following section.
Retail Segment
| Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||
| (Unaudited, amounts in thousands, except percentages) | 1/24/2026 | 1/25/2025 | % Change | 1/24/2026 | 1/25/2025 | % Change | ||||||||||||||||||||||||||||
| Sales | $ | 251,934 | $ | 227,667 | 10.7 | % | $ | 681,127 | $ | 651,601 | 4.5 | % | ||||||||||||||||||||||
| Operating income | 26,522 | 24,457 | 8.4 | % | 63,463 | 73,003 | (13.1) | % | ||||||||||||||||||||||||||
| Operating margin | 10.5% | 10.7% | 9.3% | 11.2% | ||||||||||||||||||||||||||||||
Sales
The Retail segment’s sales increased $24.3 million, or 11%, and $29.5 million, or, 5% in the third quarter and first nine months of fiscal 2026, respectively, compared with the same periods a year ago. The increase was primarily due to $23.4 million and $37.7 million of incremental sales in the third quarter and first nine months of fiscal 2026, respectively, resulting from our retail store acquisitions that occurred in fiscal 2025 and 2026, along with increased sales from our retail store expansion, net of closed stores. These increases were partially offset by a decline in delivered same-store sales during the third quarter and first nine months of fiscal 2026.
Total written sales increased 11% and 7% in the third quarter and first nine months of fiscal 2026, respectively, compared with the same periods a year ago. Written same-store sales decreased 4% and 3% over the same periods, primarily due to lower consumer demand as a result of a challenging macroeconomic environment. Same-store sales include the sales of all currently active stores that have been open and company-owned for each comparable period and excludes the benefit of net new stores and acquired stores.
Operating Margin
The Retail segment's operating margin decreased 20 basis points and 190 basis points in the third quarter and first nine months of fiscal 2026, respectively, compared with the same periods a year ago.
•Gross margin increased 20 basis points and 30 basis points in the third quarter and first nine months of fiscal 2026, respectively, compared with the same periods a year ago, primarily due to a favorable shift in product mix towards higher margin upholstery products.
•SG&A expenses as a percentage of sales increased 40 basis points and 220 basis points in the third quarter and first nine months of fiscal 2026, respectively, compared with the same periods a year ago, primarily due to fixed cost deleverage from lower delivered same-store sales combined with increased selling expenses and fixed costs resulting from our retail store expansion of 12 net new stores over the last 12 months, supporting our long-term strategy of growing our Retail segment.
Wholesale Segment
| Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||
| (Unaudited, amounts in thousands, except percentages) | 1/24/2026 | 1/25/2025 | % Change | 1/24/2026 | 1/25/2025 | % Change | ||||||||||||||||||||||||||||
| Sales to external customers | $ | 252,378 | $ | 255,028 | $ | 771,279 | $ | 770,031 | ||||||||||||||||||||||||||
| Intersegment sales | 114,214 | 107,970 | 317,709 | 307,764 | ||||||||||||||||||||||||||||||
| Total Sales | 366,592 | 362,998 | 1.0 | % | 1,088,988 | 1,077,795 | 1.0 | % | ||||||||||||||||||||||||||
| Operating income | 19,114 | 23,565 | (18.9) | % | 73,345 | 72,093 | 1.7 | % | ||||||||||||||||||||||||||
| Operating margin | 5.2% | 6.5% | 6.7% | 6.7% | ||||||||||||||||||||||||||||||
Sales
The Wholesale segment’s sales increased $3.6 million, or 1%, and $11.2 million, or 1% in the third quarter and first nine months of fiscal 2026, respectively, compared with the same periods a year ago, driven by modest growth across the majority of our wholesale businesses, partially offset by lower delivered volume in our Casegoods business. Additionally, sales in the first nine months of fiscal 2026 were negatively impacted by lower delivered volume in our international wholesale businesses, due in part to a significant customer transition that began in the second quarter fiscal 2025.
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Operating Margin
The Wholesale segment's operating margin decreased 130 basis points and was flat in the third quarter and first nine months of fiscal 2026, respectively, compared with the same periods a year ago.
•Gross margin decreased 280 basis points and 120 basis points in the third quarter and first nine months of fiscal 2026, respectively, compared with the same periods a year ago.
◦During the third quarter of fiscal 2026, we recorded $3.4 million of severance expense in connection with the planned closure of the United Kingdom manufacturing business resulting in a 90 basis point and 30 basis point reduction in gross margin in the third quarter and first nine months of fiscal 2026, respectively, compared with the same periods a year ago.
◦During the third quarter of fiscal 2026, we recorded a $3.0 million impairment charge to adjust inventory held for sale to its fair value on the upholstery portion of our Casegoods business, resulting in an 80 basis point and 30 basis point reduction in gross margin in the third quarter and first nine months of fiscal 2026, respectively, compared with the same periods a year ago.
◦Higher distribution costs, primarily related to our distribution and home delivery transformation drove an 80 basis point decrease in gross margin in both the third quarter and first nine months of fiscal 2026, compared with the same periods a year ago.
◦Gross margin in the third quarter of fiscal 2026 also decreased 50 basis points as the Mexican peso strengthened relative to the U.S. dollar, driving higher production-related costs compared with the same period a year ago.
•SG&A expense as a percentage of sales decreased 150 basis points and 120 basis points in the third quarter and first nine months of fiscal 2026, respectively, compared with the same periods a year ago
◦During the third quarter of fiscal 2026, we completed the sale of our Casegoods headquarters building and related fixed assets, resulting in a $3.9 million gain and a comparative 110 basis point and 40 basis point improvement in SG&A as a percentage of sales in third quarter and first nine months of fiscal 2026, respectively, compared with the same periods a year ago.
◦The remaining decrease in SG&A expense as a percentage of sales in the third quarter of fiscal 2026 was primarily due to fixed cost leverage on higher sales.
◦SG&A expense as a percentage of sales also decreased 80 basis points in the first nine months of fiscal 2026, compared with the same period a year ago, due to a reduction in our warranty liability as a result of the change described above, along with lower warranty expense led by improved warranty trends.
Corporate and Other
| Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||
| (Unaudited, amounts in thousands, except percentages) | 1/24/2026 | 1/25/2025 | % Change | 1/24/2026 | 1/25/2025 | % Change | ||||||||||||||||||||||||||||
| Sales | $ | 39,077 | $ | 40,662 | (3.9)% | $ | 109,001 | $ | 121,457 | (10.3) | % | |||||||||||||||||||||||
| Intercompany eliminations | (116,015) | (109,550) | (5.9)% | (322,819) | (312,517) | (3.3) | % | |||||||||||||||||||||||||||
| Operating loss | (15,825) | (12,854) | (23.1)% | (48,831) | (38,786) | (25.9) | % | |||||||||||||||||||||||||||
Sales
Corporate and Other sales decreased $1.6 million and $12.5 million in the third quarter and first nine months of fiscal 2026, respectively, compared with the same periods a year ago. The change in sales was primarily attributable to Joybird sales which decreased $1.1 million to $35.9 million and $11.8 million to $98.5 million in the third quarter and first nine months of fiscal 2026, respectively, compared with the same periods a year ago, primarily due to lower delivered volume partially offset by a favorable shift in product mix. Written sales for Joybird decreased 13% and 9% in the third quarter and first nine months of fiscal 2026, respectively, compared with the same periods a year ago, as this consumer segment continues to be particularly volatile in the current macroeconomic environment.
Intercompany eliminations increased in the third quarter and first nine months of fiscal 2026 compared with the same periods a year ago due to higher sales from our Wholesale segment to our Retail segment.
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Operating Loss
Our Corporate and Other operating loss increased $3.0 million and $10.0 million in the third quarter and first nine months of fiscal 2026, respectively, compared with the same periods a year ago, primarily due to Joybird's operating loss resulting from lower delivered sales volume.
Non-Operating Income (Expense)
Interest Income
Interest income was $0.8 million and $2.3 million lower in the third quarter and first nine months of fiscal 2026, respectively, compared with the same periods a year ago. The decrease in the third quarter and first nine months of fiscal 2026 was primarily driven by lower interest rates along with lower interest-bearing cash balances.
Other Income, (Expense), Net
Other income, expense, net was $0.6 million and $1.2 million of expense in the third quarter and first nine months of fiscal 2026, respectively, compared with $0.1 million of income and $2.4 million of expense in the same periods a year ago. The expense in the first nine months of fiscal 2026 and fiscal 2025 were primarily due to changes in exchange rates related to our operations in Mexico and Thailand.
Income Taxes
Our effective tax rate was 31.3% and 27.8% for the third quarter and first nine months of fiscal 2026, respectively, compared with 25.1% and 25.6% for the third quarter and first nine months of fiscal 2025, respectively. The year-over-year increases were primarily due to operating losses and charges related to our supply chain optimization actions in our United Kingdom business. Our effective tax rate varies from the 21% federal statutory rate primarily due to state and foreign taxes.
Liquidity and Capital Resources
Our sources of liquidity include cash and cash equivalents, short-term and long-term investments, cash from operations, and amounts available under our credit facility. We believe these sources remain adequate to meet our short-term and long-term liquidity requirements, finance our long-term growth plans, and fulfill other cash requirements for day-to-day operations and capital expenditures, including fiscal 2026 contractual obligations.
We had cash and cash equivalents of $306.1 million at January 24, 2026, compared with $328.4 million at April 26, 2025. In addition, we had investments to enhance our returns on cash of $2.8 million at January 24, 2026, compared with $2.6 million at April 26, 2025.
The following table illustrates the main components of our cash flows:
| Nine Months Ended | |||||||||||||
| (Unaudited, amounts in thousands) | 1/24/2026 | 1/25/2025 | |||||||||||
| Cash Flows Provided By (Used For) | |||||||||||||
| Net cash provided by operating activities | $ | 175,690 | $ | 125,269 | |||||||||
| Net cash used for investing activities | (137,739) | (71,190) | |||||||||||
| Net cash used for financing activities | (60,989) | (81,208) | |||||||||||
| Exchange rate changes | 706 | 620 | |||||||||||
| Change in cash and cash equivalents | $ | (22,332) | $ | (26,509) | |||||||||
Operating Activities
During the first nine months of fiscal 2026, net cash provided by operating activities was $175.7 million, primarily attributable to net income, adjusted for non-cash items, favorable changes to working capital, and higher customer deposits. Net cash provided by operating activities in the first nine months of fiscal 2026 was $50.4 million higher than the same period a year ago primarily due to favorable changes in inventory and payables combined with higher customer deposits, all partially offset by lower net income, adjusted for non-cash items.
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Investing Activities
During the first nine months of fiscal 2026, net cash used for investing activities was $137.7 million, an increase of $66.5 million compared with the same period a year ago, due to increased cash paid for acquisitions and higher capital expenditures, partially offset by higher proceeds from the sale of assets. Cash used for investing activities in fiscal 2026 included the following:
•Cash used for acquisitions was $86.4 million, primarily related to the acquisition of the Atlanta, Georgia, central/northeast Florida, and Knoxville, Tennessee retail business.
•Cash used for capital expenditures was $56.7 million, which were primarily related to La-Z-Boy Stores (new stores and remodels), manufacturing-related investments, and spending related to our distribution and home delivery transformation. We anticipate that spending on these items will continue throughout the remainder of fiscal 2026, with full year fiscal 2026 capital expenditures expected to be in the range of $80 to $90 million. We have no material contractual commitments outstanding for future capital expenditures.
•Proceeds from the sale of assets were $4.8 million, primarily related to the sale of the Casegoods headquarters building and related fixed assets.
Financing Activities
During the first nine months of fiscal 2026, net cash used for financing activities was $61.0 million, a decrease of $20.2 million compared with the same period a year ago, primarily due to lower share repurchases, partially offset by reduced proceeds from exercised stock options. Cash used for financing activities in the first nine months of fiscal 2026 included the following:
•Cash paid to our shareholders in quarterly dividends was $28.1 million. Our board of directors has sole authority to determine if and when we will declare future dividends and on what terms. We expect the board to continue declaring regular quarterly cash dividends for the foreseeable future, but it may discontinue doing so at any time at the board's discretion.
•Cash paid to repurchase 0.7 million shares of company stock was $27.1 million. Our board of directors has authorized the repurchase of Company stock and as of January 24, 2026, 3.0 million shares remained available for repurchase pursuant to this authorization.
•Cash paid for tax withholding on stock issued as part of our employee benefit plans, net of proceeds from exercised stock options, was $4.4 million.
On October 15, 2021, we entered into a credit agreement with Wells Fargo Bank, National Association, as administrative agent, the other agents and lenders named therein and the other parties thereto (as amended prior to July 1, 2025, the "Credit Agreement"). The Credit Agreement provides for an unsecured revolving credit facility in an aggregate principal amount of $200 million, which includes a $50 million letter of credit sub-limit (the "Credit Facility").
On July 1, 2025, we entered into an amendment to the Credit Agreement (the "Credit Agreement Amendment"). The Credit Agreement Amendment, among other things, (i) extended the maturity date of the Credit Facility from October 15, 2026 to July 1, 2030, (ii) increased the accordion basket for additional revolving commitments and/or incremental term loans from $100 million to $125 million, (iii) removed the secured overnight financing rate ("SOFR") credit spread adjustment, and (iv) decreased the consolidated fixed charge coverage ratio required to be satisfied under the Company’s financial covenant.
Borrowings under the Credit Facility may be used by the Company for general corporate purposes. The Credit Facility will mature on July 1, 2030, and provides us the ability to extend the maturity date for two additional one-year periods, subject to the satisfaction of customary conditions.
The Credit Facility contains certain restrictive loan covenants, including, among others, financial covenants requiring a maximum consolidated net lease adjusted leverage ratio and a minimum consolidated fixed charge coverage ratio, as well as customary covenants limiting our ability to incur indebtedness, grant liens, make acquisitions, merge or consolidate, and dispose of certain assets.
As of January 24, 2026, we have no borrowings outstanding under the Credit Facility and we were in compliance with our financial covenants under the Credit Facility. We believe our cash and cash equivalents, short-term investments, and cash from operations, in addition to our available Credit Facility, will provide adequate liquidity for our business operations over the next 12 months.
31
Exchange Rate Changes
Due to changes in exchange rates, our cash and cash equivalents increased by $0.7 million for the nine months ended January 24, 2026. These changes impacted our cash balances held in Canada, Thailand, and the United Kingdom.
Other
During the third quarter of fiscal 2026, there were no material changes to the information about our contractual obligations and commitments disclosed in our Annual Report on Form 10-K for the fiscal year ended April 26, 2025. We do not expect our continuing compliance with existing federal, state and local statutes dealing with protection of the environment to have a material effect on our capital expenditures, earnings, competitive position or liquidity.
Critical Accounting Policies
We disclosed our critical accounting policies in our Annual Report on Form 10-K for the fiscal year ended April 26, 2025. There were no material changes to our critical accounting policies or estimates during the nine months ended January 24, 2026.
Recent Accounting Pronouncements
See Note 1, Basis of Presentation, to the consolidated financial statements included in this Quarterly Report on Form 10-Q for a discussion of recently adopted accounting standards and other new accounting standards.
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-06-18 | McCurry Jennifer Lynn | Chief Accounting Officer | Sell | -3,410 | $40.60 | -$138,453 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-08-18 10-Q expected by 2026-09-03 (in 55 days)
- ~2026-11-17 10-Q expected by 2026-12-03 (in 146 days)
- ~2027-02-16 10-Q expected by 2027-03-04 (in 237 days)
- ~2027-06-15 10-K expected by 2027-06-23 (in 356 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-06-16 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-06-16 10-K Annual Report
- 2026-02-17 10-Q Quarterly Report
- 2026-02-17 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-12-09 8-K Officer/Director Change; Financial Statements and Exhibits
- 2025-11-18 10-Q Quarterly Report
- 2025-11-18 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-08-19 10-Q Quarterly Report
- 2025-08-19 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-07-02 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
- 2025-06-20 8-K Officer/Director Change
- 2025-06-17 10-K Annual Report
- 2025-06-17 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-02-18 10-Q Quarterly Report
- 2025-02-18 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits