La-Z-Boy Reports Decline in Sales and Net Loss in First Quarter of Fiscal 2027

La-Z-Boy Incorporated reported a significant decline in financial performance for the first quarter of fiscal 2027, ending July 25, 2026. The company recorded total sales of $475.7 million, a decrease of 3.4% from $492.2 million in the same quarter of the previous year. The decline in revenue was attributed to lower delivered volumes in the wholesale segment, particularly due to the divestiture of the Casegoods business, which negatively impacted overall sales figures. The company also reported a net loss of $2.3 million, compared to a net income of $18.2 million in the prior year, resulting in a basic loss per share of $0.06.

Operating income turned negative, with a loss of $2.1 million compared to an operating income of $22 million in the previous year, marking a 109.6% decline. The operating margin fell to -0.4%, down from 4.5% in the same quarter last year. The gross profit remained relatively stable at $208.7 million, but the gross margin improved by 140 basis points due to a favorable product mix and tariff impacts. However, selling, general, and administrative (SG&A) expenses increased significantly, rising to $210.8 million from $187.2 million, which contributed to the overall operating loss.

In terms of strategic developments, La-Z-Boy completed the acquisition of three independently owned La-Z-Boy Stores in the Gulf Coast region for $17.2 million, which is expected to enhance its retail presence. The company also announced the planned closure of its upholstery assembly plant in San Luis Rio Colorado, Mexico, and the Joybird manufacturing plant in Tijuana, Mexico, with operations expected to transfer to U.S. facilities by the end of fiscal 2027. These supply chain optimization actions resulted in significant impairment charges and severance expenses.

The Retail segment showed some resilience, with sales increasing by 10.3% to $228.6 million, driven by acquisitions and new store openings. However, the Wholesale segment experienced an 8.5% decline in sales to $322.9 million, primarily due to the absence of sales from the divested Casegoods business. The company reported a total of 234 company-owned La-Z-Boy Stores, with plans to continue expanding its retail footprint.

Looking ahead, La-Z-Boy remains focused on its Century Vision strategy, which aims to grow sales and market share through brand expansion and digital transformation. The company anticipates continued investment in its retail operations and expects to maintain adequate liquidity to support its growth initiatives. Despite the challenges faced in the first quarter, La-Z-Boy is committed to enhancing its operational capabilities and leveraging its brand to drive future growth.