การประชุมแถลงผลประกอบการไตรมาส 1 ปีการเงิน 2027 ของ La-Z-Boy (LZB): การเติบโตของธุรกิจค้าปลีก แรงกดดันด้านอัตรากำไร และแนวโน้มผลประกอบการไตรมาส 2

ประเด็นสำคัญ

• ยอดขายในไตรมาสที่ 1 ของปีงบประมาณ 2027 ของ La-Z-Boy ลดลง 3% ตามที่รายงาน และลดลง 1% หากไม่รวมการถอนการลงทุนในธุรกิจค้าส่ง Casegoods ที่เสร็จสมบูรณ์แล้ว
• ขาดทุนจากการดำเนินงานตามมาตรฐาน GAAP อยู่ที่ 2 ล้านดอลลาร์ ขณะที่กำไรจากการดำเนินงานปรับปรุง อยู่ที่ 19 ล้านดอลลาร์ อัตรากำไรจากการดำเนินงานปรับปรุงลดลงสู่ระดับ 3.9% จาก 4.8% โดยมีสาเหตุหลักมาจากปริมาณการขายที่ลดลงในธุรกิจค้าส่งและ Joybird
• ยอดขายส่งมอบของธุรกิจค้าปลีกเพิ่มขึ้น 10% สู่ระดับ 229 ล้านดอลลาร์ ยอดสั่งซื้อ ของธุรกิจค้าปลีกเพิ่มขึ้น 16% ซึ่งรวมถึงยอดสั่งซื้อสาขาเดิมที่เติบโต 3% โดยได้รับปัจจัยหนุน จากยอดขายบริการออกแบบ อัตราการแปลงเป็นลูกค้า และยอดซื้อต่อครั้งเฉลี่ยที่สูงขึ้น
• ยอดขายส่งมอบของธุรกิจค้าส่งลดลง 9% สู่ระดับ 323 ล้านดอลลาร์ หรือลดลง 5% หากไม่รวมการถอนการลงทุนใน Casegoods ผู้บริหารระบุว่าอุปสงค์ปรับตัวดีขึ้น ในระหว่างไตรมาส และยอดขายรอรับรู้รายได้มีความแข็งแกร่งเมื่อเข้าสู่ไตรมาสที่ 2 ของปีงบประมาณ
• บริษัทสิ้นสุดไตรมาสด้วยเงินสด 267 ล้านดอลลาร์ และไม่มีหนี้สินจากการจัดหาเงินทุนภายนอก บริษัทได้คืนเงินให้แก่ผู้ถือหุ้นจำนวน 35 ล้านดอลลาร์ ผ่านการซื้อหุ้นคืน 25 ล้านดอลลาร์ และเงินปันผล 10 ล้านดอลลาร์
• ผู้บริหารคาดการณ์ยอดขายในไตรมาส 2 ของปีงบประมาณที่ 500 ล้านดอลลาร์ ถึง 520 ล้านดอลลาร์ และอัตรากำไรจากการดำเนินงานปรับปรุงที่ 4% ถึง 5.5% พร้อมเตือนว่าอุปสงค์ที่ไม่สม่ำเสมอ การใช้จ่ายเชิงกลยุทธ์ และต้นทุนจากความติดขัดในห่วงโซ่อุปทานจะยังคงกดดัน ความสามารถในการทำกำไรในระยะสั้น

ข้อมูลทางการเงินที่สำคัญ

ผลการดำเนินงานทางธุรกิจ และการดำเนินงาน

แรงส่งในธุรกิจค้าปลีก ช่วยชดเชยผลประกอบการที่อ่อนแอลงของธุรกิจค้าส่งและ Joybird

ธุรกิจค้าปลีกยังคงเป็นธุรกิจที่แข็งแกร่งที่สุดของ La-Z-Boy ยอดขายส่งมอบ เพิ่มขึ้น 10% สู่ระดับ 229 ล้านดอลลาร์ โดยมีสาเหตุหลักมาจากร้านค้าที่เข้าซื้อกิจการและร้านค้าใหม่ ยอดขายส่งมอบสาขาเดิมลดลงเล็กน้อย แต่ยอดสั่งซื้อสาขาเดิมเพิ่มขึ้น 3% อัตรากำไรจากการดำเนินงานปรับปรุงของธุรกิจค้าปลีกปรับตัวดีขึ้นสู่ระดับ 6.5% จาก 6.3% โดยได้รับปัจจัยหนุนจากการเข้าซื้อกิจการ

บริษัทเพิ่มร้านค้าที่บริษัทเป็นเจ้าของ 4 แห่งในระหว่างไตรมาส ได้แก่ สาขาใหม่ 1 แห่ง และสาขาที่เข้าซื้อกิจการ 3 แห่ง สิ้นสุดช่วงเวลาด้วยร้านค้า ที่บริษัทเป็นเจ้าของ 234 แห่ง ซึ่งคิดเป็น 62% ของเครือข่ายในอเมริกาเหนือที่มี ประมาณ 380 แห่ง ผู้บริหารยังคงเป้าหมายเครือข่ายที่ 450 แห่ง และการเปิดสาขาใหม่ ประมาณ 10 แห่งต่อปี ซึ่งส่วนใหญ่เป็นร้านค้าที่บริษัทเป็นเจ้าของ

นอกจากนี้ La-Z-Boy ยังตกลงที่จะเข้าซื้อร้านค้ารายอิสระ 2 แห่งในหลุยเซียนา โดยคาดว่าจะปิดดีลในเดือนตุลาคม ผู้บริหารกล่าวว่ายังมีร้านค้ารายอิสระ เกือบ 150 แห่งที่ดำเนินงานโดยตัวแทนจำหน่ายเกือบ 40 รายอยู่ในเครือข่าย ซึ่งเป็นโอกาสในการเข้าซื้อกิจการในระยะยาว

ปริมาณการขายและ อัตรากำไรของธุรกิจค้าส่งลดลง

ยอดขายส่งมอบของธุรกิจค้าส่งลดลง 9% สู่ระดับ 323 ล้านดอลลาร์ หรือลดลง 5% หากไม่รวม การถอนการลงทุนใน Casegoods ที่เสร็จสมบูรณ์ในเดือนพฤษภาคม อัตรากำไรจากการดำเนินงานปรับปรุง ลดลงสู่ระดับ 6.8% จาก 7.5% เนื่องจากการลดลงของผลประโยชน์จากต้นทุนคงที่ต่อหน่วย และต้นทุน ที่เกี่ยวข้องกับการลงทุนเชิงกลยุทธ์

แรงกดดันเหล่านี้ได้รับการชดเชยบางส่วนจากผลกระทบด้านภาษีศุลกากรที่เป็นบวก 240 basis points ซึ่งรวมถึงการคืนเงินตาม IEEPA และการดำเนินการด้านราคาหลังหักต้นทุนภาษีศุลกากร บริษัทสิ้นสุดไตรมาสด้วยสถานที่ตั้ง La-Z-Boy Comfort Studio และพื้นที่แบรนด์เฉพาะมากกว่า 1,400 แห่ง

ผู้บริหารเปิดเผยว่าประมาณสองในสามของผลิตภัณฑ์ที่ผลิตโดย La-Z-Boy ถูกจำหน่ายผ่านเครือข่ายร้านค้า La-Z-Boy ขณะที่ประมาณหนึ่งในสาม จัดจำหน่ายผ่านผู้ค้าปลีกหลายแบรนด์ บริษัทกำลังมุ่งเน้นไปที่พันธมิตรเชิงกลยุทธ์และการขยายพื้นที่แบรนด์เฉพาะเพื่อเพิ่มการมองเห็นและการเข้าถึงผู้บริโภค

Joybird ยังคงเป็นปัจจัยฉุดรั้ง

ยอดขายส่งมอบของ Joybird อยู่ที่ 27 ล้านดอลลาร์ ลดลง 4% ขณะที่ ยอดสั่งซื้อลดลง 17% ผู้บริหารระบุว่าความอ่อนแอนี้เกิดจากความผันผวนอย่างมากของผู้บริโภค ปริมาณการขายที่ลดลงยังส่งผลให้ขาดทุนจากการดำเนินงานปรับปรุงในส่วนงานองค์กรและอื่น ๆ เพิ่มขึ้น

La-Z-Boy มีแผนที่จะย้ายการผลิตของ Joybird เข้าสู่เครือข่ายโรงงานในสหรัฐฯ ที่มีอยู่เดิมภายในสิ้นปีงบประมาณ 2027 ผู้บริหารระบุว่าสิ่งนี้สร้างต้นทุนจากความติดขัดในระยะสั้น แต่ควรช่วยให้โครงสร้างต้นทุนของ Joybird ผันแปรได้มากขึ้น และปรับปรุงความยืดหยุ่นของธุรกิจ

การลงทุนในห่วงโซ่อุปทานและ ดิจิทัลยังคงดำเนินต่อไป

มากกว่า 90% ของเฟอร์นิเจอร์บุเบาะของ La-Z-Boy ผลิตภายในประเทศ ซึ่งรองรับการส่งมอบผลิตภัณฑ์สั่งทำพิเศษภายในสี่ถึงหกสัปดาห์ การผลิตยุติลงที่โรงงานแห่งหนึ่งจากสองแห่งที่มีกำหนดควบรวม และมีแผนจะปิดโรงงานแห่งที่สองภายในสิ้นปีงบประมาณ

บริษัทยังลดขนาดพื้นที่จัดจำหน่ายจาก 15 ศูนย์ เหลือเพียงศูนย์กลาง 3 แห่ง ผู้บริหารคาดว่าเครือข่ายที่สมบูรณ์จะลดระยะทางขนส่งลง 20% และใช้พื้นที่ตารางฟุตลดลง 30% ในขณะที่เพิ่มรัศมีการจัดส่งไปยังผู้บริโภคเป็นสองเท่า

การลงทุนด้านดิจิทัลรวมถึงการปรับปรุงภาพสินค้า ภาพประกอบ 3D ความละเอียดสูง คำอธิบายสินค้าที่ยกระดับด้วย AI ฟังก์ชันตะกร้าสินค้าแบบแชร์ร่วมกัน และการค้นหาที่ขับเคลื่อนด้วย AI เว็บไซต์ของ La-Z-Boy มีผู้เข้าชมเกือบ 50 ล้านคนต่อปี ซึ่งหลายคนเริ่มเส้นทางการซื้อทางออนไลน์ ก่อนจะซื้อเสร็จสมบูรณ์ที่ร้านค้า

คาดการณ์โดยผู้บริหาร

สำหรับไตรมาสที่ 2 ของปีงบประมาณ 2027 ผู้บริหารคาดว่า:

ผู้บริหารตั้งข้อสังเกตว่า ไตรมาสที่สองของปีก่อนมีผลประโยชน์ที่ไม่เกิดขึ้นประจำ จำนวน 110 basis points จากการเปลี่ยนแปลงข้อตกลงการรับประกันของตัวแทนจำหน่าย

อัตรากำไรในระยะสั้นยังคาดว่าจะสะท้อนถึงค่าใช้จ่ายโฆษณาที่สูงขึ้น การเปิดตัวเอกลักษณ์ของแบรนด์ใหม่ การปรับเปลี่ยนสู่ดิจิทัล การกำหนดราคาเชิงกลยุทธ์ และต้นทุนจากความติดขัดจากโครงการจัดจำหน่ายและการควบรวมโรงงาน ผู้บริหารคาดว่าต้นทุนจากความติดขัดในห่วงโซ่อุปทานเหล่านี้จะยังคงดำเนินต่อไปในช่วงที่เหลือของปีงบประมาณ

คาดว่ารายจ่ายลงทุนในปีงบประมาณ 2027 จะอยู่ที่ 90 ล้านดอลลาร์ ถึง 110 ล้านดอลลาร์ บริษัทมีแผนเปิดสาขาใหม่ประมาณ 10 แห่งในระหว่างปี และรักษานโยบายที่สมดุลระหว่างการนำเงินไปลงทุนต่อและการคืนผลตอบแทนให้แก่ผู้ถือหุ้น

ความเสี่ยงและจุดที่ต้องจับตา

• ผู้บริหารคาดว่าอุปสงค์ของผู้บริโภคจะยังคงไม่สม่ำเสมอ โดยเฉพาะใน ธุรกิจค้าส่งและ Joybird
• ปริมาณการส่งมอบที่ลดลงกำลังสร้างการลดลงของผลประโยชน์จากต้นทุนคงที่ต่อหน่วย ในธุรกิจค้าส่งและ Joybird
• การปรับโครงสร้างของ Joybird จะยังคงสร้างต้นทุนในระยะสั้น จนกว่าการรวมกระบวนการผลิตจะเสร็จสมบูรณ์ภายในสิ้นปีงบประมาณ
• โครงการห่วงโซ่อุปทานหลายโครงการกำลังดำเนินไปพร้อมกัน ซึ่งเพิ่มความซับซ้อนในการดำเนินงานและต้นทุนจากความติดขัด
• ภาษีศุลกากรตามมาตรา 301 และ 338 ที่เพิ่งประกาศใช้สร้างต้นทุนเพิ่มเติม แม้ว่าผู้บริหารจะอธิบายว่าผลกระทบดังกล่าวอยู่ในระดับที่จัดการได้
• กิจกรรมส่งเสริมการขายทวีความเข้มข้นขึ้นในกลุ่มคู่แข่งธุรกิจค้าส่งบางราย ขณะที่ผู้บริหารกล่าวว่ายังเร็วเกินไปที่จะประเมินอุปสงค์ในช่วงวันแรงงาน

ประเด็นสำคัญจากการถาม-ตอบกับนักวิเคราะห์

ผู้บริหารเปิดเผยว่าไม่มีปัจจัยเดียวที่ผลักดันการปรับตัวดีขึ้นของยอดสั่งซื้อ สาขาเดิมของธุรกิจค้าปลีก แต่มาจากยอดขายบริการออกแบบ อัตราการแปลงเป็นลูกค้า และยอดซื้อต่อครั้งเฉลี่ยที่ปรับตัวดีขึ้นทั้งหมด การเพิ่มจำนวนผู้เข้าชมร้านค้ายังคงเป็นโอกาสสำคัญ โดยความสามารถด้านดิจิทัลมีเป้าหมายเพื่อเปลี่ยนผู้ช้อปออนไลน์ให้มาซื้อสินค้าที่ร้านค้า

สำหรับธุรกิจค้าส่ง ผู้บริหารระบุว่าความผันผวนในรายไตรมาสส่วนหนึ่งเกิดจาก จังหวะเวลาของคำสั่งซื้อ การปิดโรงงานประจำปี และสภาพแวดล้อมของผู้บริโภคที่ไม่สม่ำเสมอ อย่างไรก็ตาม บริษัทอธิบายว่ายอดขายรอรับรู้รายได้ ณ จุดเริ่มต้นไตรมาสยังคงแข็งแกร่ง และย้ำถึงความสำคัญเชิงกลยุทธ์ของพันธมิตรผู้ค้าปลีกหลายแบรนด์

ผู้บริหารชี้แจงถึงจังหวะเวลาของโครงการลงทุน โดยโต้แย้งว่า สภาพแวดล้อมอุตสาหกรรมที่ซบเซาเป็นโอกาสในการเพิ่มประสิทธิภาพธุรกิจก่อนการฟื้นตัว ผลการดำเนินงานของธุรกิจค้าปลีกยังคงเป็นที่น่าพอใจ แต่ธุรกิจค้าส่งยังต้องการการปรับปรุงเพิ่มเติม และ Joybird ยังคงสร้างแรงกดดันต่อผลประกอบการรวม

ในส่วนของ Joybird ผู้บริหารไม่ได้กำหนดกรอบเวลาในการทำกำไร แต่มองว่าการรวมกระบวนการผลิตเข้ากับเครือข่ายการผลิตในสหรัฐฯ ของ La-Z-Boy เป็นขั้นตอนที่ควบคุมได้ที่สำคัญที่สุดในการลดต้นทุนคงที่และปรับปรุงความยืดหยุ่น

บันทึกการประชุมแถลงผลประกอบการ ฉบับเต็ม

บทถอดเสียงฉบับเต็มของการประชุมทางโทรศัพท์ผลประกอบการ

คำชี้แจงจากฝ่ายบริหาร

Operator

Good morning, everyone, and welcome to the La-Z-Boy Fiscal 2027 First Quarter Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the call over to your host, Mark Becks, Director of Investor Relations and Corporate Development at La-Z-Boy, Inc. Mark, the floor is yours.

Mark Becks

Thank you, Jenny. Good morning, everyone, and thanks for joining us to discuss our fiscal 2027 first quarter.

Joining me on today's call are Melinda Whittington, La-Z-Boy Inc. Board Chair, President and Chief Executive Officer; and Taylor Luebke, SVP and CFO.

Melinda will open and close the call, and Taylor will speak to segment performance and the financials midway through. After our prepared remarks, we will open the line for questions. Slides will accompany this presentation, and you may view them through our webcast link, which will be available for 1 year.

And a telephone replay of the call will be available for 1 week beginning this afternoon. I would like to remind you that some statements made in today's call include forward-looking statements about La-Z-Boy's future performance and other matters.

Although we believe these statements to be reasonable, our actual results could vary materially. The most significant risk factors that could affect our future results are described in our annual report on Form 10-K. We encourage you to review those risk factors as well as other key information detailed in our SEC filings. Also, our earnings release is available under the News and Events tab on the Investor Relations page of our website, and it includes reconciliations of certain adjusted measures, which are also included as an appendix at the end of our conference call slide deck. With that, I will now turn the call over to Melinda.

Melinda Whittington

Thank you, Mark. Good morning, everyone. Yesterday, following the close of market, we reported our July ended first quarter results, which reflect driving our own retail momentum, progressing our strategic initiatives and investing in our business while also returning capital to shareholders.

Highlights for our first quarter included written sales for the retail segment increasing 16%, with written same-store sales growing 3%, driven by excellent in-store execution.

Delivered sales for the retail segment increased 10%, led by acquisitions and new stores with same-store sales down just slightly. We added 4 company-owned stores during the quarter, including 1 new and 3 acquired, bringing our total to 234 company-owned stores or 62% of the total network. And we announced another 2-store acquisition now underway.

We have concluded production at 1 of our 2 announced plant consolidations during the quarter. We returned $35 million to shareholders through share repurchase and dividends, a 62% increase versus prior year.

And finally, we ended the quarter with $267 million in cash and no external debt, maintaining our strong balance sheet. Our first quarter results reinforce our strategic focus on driving our retail business, where we control the full end-to-end consumer experience and where we have significant growth potential as we continue to expand our base and drive positive same-store sales. We are pleased with our first quarter execution in retail, including positive written same-store sales growth, and our performance continues to demonstrate the strength of our iconic brand and our ability to drive our own momentum even as the broader furniture market experiences challenges.

At the same time, on a consolidated basis, the quarter was mixed as we navigate near-term headwinds while still investing to advance our strategic initiatives.

Total delivered sales for the entire enterprise were down 1% versus prior year when excluding the impact of the Casegoods divestitures. Our strong 10% delivered sales growth on retail was more than offset by lower wholesale delivered sales, which were impacted by flow-through of choppier-than-expected order patterns and continued pressure on our Joybird business. The deleverage on Wholesale and Joybird sales in what is already the slowest season for our industry, [indiscernible] with friction costs for investing for the long term negatively impacted our margins for the quarter.

Moving on to forward-looking trends. First quarter total written sales for our company-owned retail segment increased 16% versus last year's first quarter, driven by acquired and new stores and importantly, positive written same-store sales. Written same-store sales, which exclude the benefit of new and acquired stores, grew 3% for the quarter, which is also a significant sequential improvement versus fourth quarter.

This performance was driven by continued excellence in execution across marketing, product innovation and in-store inspiration with increases in design sales, conversion rates and average ticket. Trends were strongest in May and July around key holiday selling periods. On Wholesale, demand patterns improved throughout the first quarter, and our backlog is solid entering the second quarter against what we expect to be a continued uneven demand environment.

Our Joybird business continues to experience the most significant consumer volatility with written sales decreasing 17% in the quarter. We continue to work on improving the resiliency of this business, including transitioning manufacturing into our established U.S. plant network by the end of the fiscal year. Across our enterprise, despite sector-wide softness as reported in the Census Bureau data, we continue to capture market share through the strength of our iconic La-Z-Boy brand, agile U.S.-centered supply chain, consumer-led insights and most significantly, excellent execution in our La-Z-Boy retail stores. Now in our 100th year, I want to take a few minutes to highlight progress against our Century Vision strategic framework.

Our goal remains to grow sales at twice the industry rate, gaining share while strengthening margins. Last year, we proactively made structural changes in our business to focus on our core La-Z-Boy brand and build an even more agile supply chain. Achievements included the wholesale Casegoods exit, which was completed in May, the first year of our distribution and home delivery transformation project, our U.K. supply chain restructuring and significantly expanding our retail footprint.

During fiscal '27, our strategic work continues. In retail, during the first quarter, we added 4 company-owned stores, including 1 new and 3 acquired, bringing our total to 234 company-owned stores or 62% of the total network. This compares to only 127 company-owned stores 10 years ago and reflects our aggressive yet disciplined store expansion strategy with new stores across our network as well as acquisitions.

Our total La-Z-Boy store network, including company-owned stores and independently owned stores, now stands at approximately 380 stores across North America and progress continues. The strength of our brand and productivity of our store network supports further expansion of the La-Z-Boy footprint to 450 locations with expectations for approximately 10 new stores annually, primarily company-owned.

And independent dealer acquisitions also remain a key opportunity as these transactions are immediately sales and profit accretive and often offer additional growth opportunities to underpenetrated markets. I am pleased to note that during the quarter, we signed an agreement to acquire another 2 independent La-Z-Boy stores in Louisiana, expected to close in October.

And there remains a solid pipeline potential over time with almost 40 independent dealers and nearly 150 independent stores still in the network. Another important focus is our digital transformation, which is a critical enabler to our direct-to-consumer growth strategy, consumer engagement objectives and ability to appeal to a younger and broader consumer audience.

Most of our consumers choose to complete their purchase journey in store where they can experience the personalized service and comfort of our La-Z-Boy brand. But we know that today's purchase journey begins online for most consumers, and we are driving meaningful improvements to our consumer experience on our e-commerce platform. We have added several expanded features, including a new content management system, which showcases product imagery and visuals with enhanced viewing and high-definition 3D illustrations. We've also incorporated AI-enriched product descriptions to drive a more seamless discovery process.

Additionally, we are now offering shared cart functionality where a shopper can share product ideas and inspirations with a loved one or an in-store retail consultant to augment the connected omnichannel experience. And we have added advanced technologies, including AI-powered search capabilities to accelerate engagement and conversion.

Our website attracts almost 50 million annual visitors seeking inspiration and product guidance as they begin their shopping journey. And these are just a few of the examples of our ongoing enhancements to support our vision of delivering a unified omnichannel experience and meeting our consumers wherever they want to shop.

In the Wholesale segment, we continue to grow our business with compatible strategic partners who appreciate our La-Z-Boy brand equity and the comfort and quality our products offer. During the quarter, we continued to expand our dealer base and our relationship with existing strategic partners. We ended the quarter with over 1,400 La-Z-Boy Comfort Studio and branded space locations, each with dedicated space for La-Z-Boy branded products. We remain focused on organic expansion with existing partners while also evaluating new compatible distribution opportunities.

Our final Century Vision strategic pillar involves driving enterprise agility and optimizing our foundational infrastructure in supply chain, technology and talent. Our vertically integrated model with more than 90% of upholstered furniture produced domestically represents a powerful competitive advantage. This footprint enables us to deliver customized products with 4 to 6 weeks delivery time and positions us amongst the very best in our industry to manage the volatile tariff environment.

We continue to optimize our manufacturing footprint by consolidating 2 of our smallest upholstery plants into our established U.S. network with production concluded in 1 plant during the first quarter and the second to be closed by the end of the fiscal year and still leaving us with ample capacity in our U.S. footprint to support future growth as we fully integrate and optimize these consolidations.

Fiscal '27 is also a foundational year for our distribution and home delivery transformation project as the remaining 2 of our 3 centralized hubs will be completed and opened by fiscal year-end. This 4-year project will optimize our footprint from 15 distribution centers to 3 centralized hubs, enabling 20% less mileage traveled, 30% less square footage and doubling our delivery radius to consumers. As we look ahead, we're focused on making our own momentum, managing the variables within our control and driving value for all stakeholders. While the timing for an industry recovery remains uncertain, we possess distinct levers to drive growth and reinforce our competitive position across our Century Vision pillars.

We are well positioned to continue to gain share now and ongoing. And now I'll turn the call over to Taylor to review the financial results in more detail.

Taylor Luebke

Thank you, Melinda, and good morning, everyone. As a reminder, we present our results on both a GAAP and adjusted basis. We believe the adjusted presentation better reflects underlying operating trends and performance of the business.

Adjusted results exclude items, which are detailed in our press release and in the appendix section of our conference call slides. On a consolidated basis, fiscal 2027 first quarter sales were down 3% as reported and down 1% adjusting for the wholesale case goods divestiture, which was completed in May. Consolidated GAAP operating income was a loss of $2 million, including onetime charges of plant exits and adjusted operating income was a positive $19 million. Consolidated GAAP operating margin was minus 0.4% and adjusted operating margin was 3.9% versus 4.8% last year, with the change primarily driven by expense deleverage on lower wholesale and Joybird delivered sales.

Diluted earnings per share totaled minus $0.06 on a GAAP basis and adjusted diluted EPS was $0.43. A reminder, our first quarter is generally our lowest sales and operating margin quarter in the fiscal year due to seasonally lower industry sales and our annual week-long plant shutdown. Now as I move to the segment discussion, my comments from here will focus on our adjusted reporting unless specifically stated otherwise. Starting with the Retail segment for the first quarter, delivered sales increased 10% to $229 million, primarily due to growth from acquired and new stores with delivered same-store sales down slightly versus a year ago.

Retail adjusted operating margin increased to 6.5% versus 6.3% last year, driven by the positive impact of acquisitions. For our Wholesale segment, delivered sales decreased 9% to $323 million versus last year on a reported basis, which is down 5%, adjusting for the divestiture of our Casegoods businesses completed in May.

Sales were impacted by flow-through of uneven order patterns throughout the quarter, and we expect that choppiness to continue. However, order backlog is solid as we enter the second quarter. Adjusted operating margin for the Wholesale segment decreased to 6.8% in the first quarter versus 7.5% last year, driven by fixed cost deleverage on our lower delivered volume and friction costs related to our strategic investments, partially offset by 240 basis point favorable tariff impact, including IEEPA refunds and pricing actions net of tariff costs.

For Joybird reported in Corporate and Other, delivered sales were $27 million, down 4% on lower delivered sales volume as this consumer segment continues to be particularly volatile against the current macroeconomic backdrop. Corporate and Other adjusted operating loss increased versus the prior year, primarily due to expense deleverage on lower Joybird delivered sales.

We are in the process of fully integrating Joybird into our existing U.S. plant network, which drives near-term friction costs, but will improve the cost structure of this business once complete at the end of our fiscal year. Moving on to our consolidated adjusted gross margin and SG&A performance for fiscal 2027 first quarter.

Consolidated adjusted gross margin for the entire company increased 290 basis points versus the prior year first quarter. The increase in gross margin was primarily driven by the shift in consolidated mix towards our retail segment, which has a higher gross margin rate than our wholesale segment. Favorable tariff impacts, including IEEPA refunds and pricing actions net of tariff costs drove an additional increase in gross margin in the first quarter of fiscal 2027 compared with the same period a year ago.

Adjusted SG&A as a percent of sales for the quarter increased by 380 basis points compared with last year, also due to the shift in consolidated mix towards our retail segment, which carries a higher fixed cost structure relative to wholesale as well as fixed cost deleverage on lower delivered volume in our wholesale and Joybird business. Our effective income tax rate on a GAAP basis for the quarter was a 45.8% benefit versus a 25% expense for the prior period.

The change in the effective tax rate was disproportionately impacted by onetime impacts of certain nondeductible supply chain optimization charges, along with the tax benefits from the vesting of stock awards and state refunds. We continue to expect a more normalized effective income tax rate for the full year in the range of 26% to 27%. Our balance sheet remains strong with $267 million in cash and no externally funded debt.

We generated $16 million in cash from operating activities in the quarter or $27 million, excluding an $11 million payment to terminate a legacy retirement plan. The retirement plan termination is a net zero cash impact with the offset in investing activities with proceeds from sale of investments.

We deployed $39 million back into the business, more than double a year ago behind $23 million in capital expenditures related to our distribution and home delivery transformation, manufacturing-related investments and new La-Z-Boy stores and remodels and invested $16 million for a 3-store acquisition.

We also returned approximately $35 million to shareholders, a 62% increase versus the prior year, including $25 million in share repurchases and $10 million in dividends. We have $291 million remaining on this authorization and continue to view share repurchases as an important vehicle of delivering shareholder returns.

Our capital allocation target remains consistent to reinvest 50% of operating cash flow back into the business and return 50% to shareholders in share repurchases and dividends. Before turning the call back to Melinda, let me highlight several important items for our second quarter and fiscal year.

We entered our second quarter with strong written retail sales and a solid wholesale backlog balanced by a cautious view of the macro backdrop, which is driving uneven demand patterns. We expect second quarter sales to be in the range of $500 million to $520 million, reflecting sales growth of down 1% to positive 2%, excluding the impact of the wholesale Casegoods divestitures.

We expect second quarter adjusted operating margin in the range of 4% to 5.5% as we navigate the volatility while driving our strategic investments. Adjusted operating margin will be impacted in the near term by several factors. For comparability, recall, last year's second quarter included a favorable onetime 110 basis point benefit due to a change in dealer warranty arrangements, which does not repeat this year.

Additionally, for the second quarter and the balance of our fiscal year, we are incrementally investing and absorbing some near-term friction costs as we focus on driving strategic priorities. We are laser-focused on growing our core La-Z-Boy retail and wholesale businesses against a challenged backdrop and are incrementally investing in advertising, the rollout of our new brand identity, digital transformation and strategic pricing.

We will open approximately 10 new stores during the year as we continue to expand our retail footprint. Additionally, Joybird continues to be a drag on our enterprise results, and we are actively retooling this business to improve profitability with the largest initiative being the plant consolidation by the end of the fiscal year. And lastly, this is a significant investment year across our supply chain to advance our distribution transformation and 2 manufacturing plant consolidations, and we continue to absorb friction costs as we work these large supply chain projects in parallel.

We remain committed to these important initiatives. Separately, we continue to monitor the evolving tariff and trade policy environment and adjust accordingly. As a reminder, over 90% of our upholstery production is based in the U.S., which continues to be a competitive advantage as we are able to deliver customized upholstery with speed to market and positions us amongst the best in our industry to mitigate trade volatility.

Trade policy continues to evolve, including recently issued Section 301 and 338 tariffs, adding incremental but manageable impacts to the company. We continue to be in process for our IEEPA refunds, which of note are significantly less than others in our industry. We expect capital expenditures to be in the range of $90 million to $110 million for the year, with this being the largest investment year for our distribution and home delivery transformation as well as ongoing investments in manufacturing and related retail stores, including new stores and remodels.

We expect capital allocation to be balanced between investments back into the business and return to shareholders, including normalized pace of share repurchases. And with that, I will turn the call back to Melinda.

Melinda Whittington

Thanks, Taylor. We're creating our own momentum through retail expansion, accelerating our direct-to-consumer capabilities and strategically strengthening our supply chain, all investments that position us to drive sustainable growth and margin expansion well into our next 100 years.

Even as we face near-term headwinds, we possess distinct levers to outperform the market, capture share and disproportionately grow sales and expand margins. Before I conclude, I want to thank our entire La-Z-Boy team and our many partners for their commitment to our mission of delivering the transformational power of comfort to more homes.

Our iconic brand, retail expansion, vertically integrated operations, strong balance sheet and cash position and talented workforce provide us with a powerful foundation to not only navigate today's environment but emerge even stronger. We are well positioned for the future, confident in our strategic direction and truly excited about the opportunities ahead. And now I'll turn the call back to Mark.

Mark Becks

Thank you, Melinda. We will begin the question-and-answer period now. Jenny, please review the instructions for getting into the queue to ask questions.

Operator

[Operator Instructions] Our first question is coming from Brad Thomas of KeyBanc Capital.

ช่วงถาม-ตอบ

Taylor Zick

This is Taylor Zick on for Brad. Maybe, Melinda, can we start on the improvement in the retail written sales in the quarter? You talked about a bunch of factors kind of contributing to the positive written comp here in the quarter.

But can you kind of just rank order some of those factors in terms of how much they're contributing to the overall improvement? And then maybe how should we think about those factors kind of contributing into the current quarter fiscal 2Q? And maybe any insights on how August is trending so far?

Melinda Whittington

Sure. I... First of all, good morning. I would say no individual factor stands out, but really, as I called out, really across sort of all of our KPIs in retail, each one was incrementally better, right? And so that's a good thing, right, in that it speaks to just really sound execution across the board.

As you know, within Century Vision, our strategy is expanding retail and that flywheel really works for retail when we have positive same-store sales. And so that's been a real focus for us. Very pleased to see that come through here in the first quarter, and that is our focus on making our own momentum, which is, frankly, a lot of blocking and tackling at every level.

And maybe the -- the newer piece to that, that we're highlighting a little bit more even in this session is making sure that we are strengthening that digital transformation piece to ensure that when the consumer starts online, we're capturing them sort of in both inspiration and tactically.

And then in most cases, that drives traffic into the store, which remains probably our biggest opportunity is to have more footsteps into stores so that we can give them -- give the consumer that incredible experience that they get once they come into our stores that we see so much.

As far as going into quarter 2, as we've said, our goal is around driving same-store sales while we expand that footprint as well to reach more consumers. It's -- we continue to see tentpole events being the big drivers of the quarter. We certainly saw that with Memorial Day and even 4th of July in Q1. But it's too early to say anything about Labor Day at this point.

Taylor Zick

Sure. Yes, that's helpful. And then maybe if I can ask on the wholesale side, it kind of continues to be impacted by some choppier order trends, even top line down relative to 1Q when you exclude some of the divestiture. I guess as you talk to your retail partners here, what's kind of driving some of this choppiness? -- their inventory levels too high? And I guess, how should we be thinking about that segment here in the quarters ahead given the still difficult industry backdrop?

Melinda Whittington

Yes. A couple of things. First one is while our primary strategic focus is on retail because we can control the entire consumer experience and meeting that consumer need, Wholesale is still a super important part of our business.

And main driver being that it just reaches multi-branded retailers reach consumers that likely in an incredibly fragmented marketplace are never going to come into a La-Z-Boy store. Across that very fragmented marketplace where there are more privately held players than publicly held players, performance is pretty -- ranges pretty dramatically on how folks are weathering a fairly choppy consumer environment.

And as you know, our focus is on expanding our ability to win with those strategic partners that are winning in this time. That said, the environment, as I said, we use a lot of words, choppy, uneven, but the environment is challenging, and we're seeing different levels of performance there. Q1 being already particularly seasonally low, right, for demand for our industry.

And then with a little bit of bumpiness of even timing in orders. And then we have our plant closed for a week as well. You just saw a particular level of choppiness in servicing those orders in Q1. And so we have a cautious outlook. It's still a really important -- as we go into Q2, it's a very important channel for us. We are -- we feel really good about our strategic partners.

We feel good about the solid backlog that we have entering Q2. But I think this is just the -- that's going to be the area where we experienced more of the choppiness in our own retail because there's less of that we can control at any given moment.

Taylor Zick

Sure. And then if I could squeeze one more in for Taylor here. Maybe just the 2Q guidance, expecting adjusted operating margins 4% to 5.5%. You called out some -- both some near-term investments and some friction costs here.

But as we just kind of look at the operating margins compared to prior year 2Qs, I think even going back pre-pandemic, it's a fairly sharp decline. I guess, can you kind of unpack some of those investments? How much are some of these near-term investments versus kind of these temporary friction costs? And then you kind of noticed some strategic pricing and advertising as well. So how should we think about the impact of these factors in 2Q and the quarters ahead?

Taylor Luebke

Yes. Thanks for the question, Taylor. So let me try to hit this from a couple of different angles. One, at a high level, to reiterate what Melinda had mentioned and through the script is really proud of where retail is and how that's performing both on delivered sales, written sales, same-store sales as well as margin accretion and wholesale continues to be choppy and particularly Joybird continues to be a drag in the first quarter and it continues to be a drag in the second quarter.

So overall, mixed results, feel good about the channel we can control, but have some cautious outlook on some of the others. On margin guide for 2Q, I'd just remind you, I want to reiterate, 110 basis points of, call it, warranty benefit was in last year's numbers, you kind of need to strip that out for a true apples-to-apples.

And secondarily, we have talked in the script on some incremental investments we're making in the near term and then some of that will be throughout the year. So one, we are incrementally investing particularly in quarter 2 on advertising as we really are putting all of our assets into play to win Labor Day with the consumer as well as Melinda mentioned, even through this year on the digital transformation, which is really important to that consumer who starts their journey online as well as where needed, particularly in the wholesale channel or even our retail, like we take strategic pricing, sorry, where the opportunity presents itself.

In some cases, that's been we've taken prices up to offset inflationary costs. In some cases, we've been sharper on price points or promotional activity to call it win with that bifurcated consumer. So we continue to use all the tools that we have to really meet the consumer where they're at and get our La-Z-Boy products into their homes.

Secondarily, this is a very significant investment year on our supply chain. So we have, call it, 3 big projects running in parallel. We have year 2, which is the largest and most heavy investment year of our distribution transformation projects.

And then we also have the 2 plant consolidations into our U.S. network. So significant initiatives that will put the company even more optimized as we progress through them. But what we're experiencing is we're doing all of those in parallel is some incremental friction cost versus expectations, which we expect to remain for the balance of the year.

Operator

Our next question is coming from Bobby Griffin of Raymond James.

Robert Griffin

I guess, first, Melinda, I wanted to touch back on the wholesale side of things. Can you remind us again the portion of wholesale that goes to the non-La-Z-Boy galleries? I believe it's about 50%, but I don't know if that is still the correct percentage today.

And then as you look out in that channel being more challenged than the La-Z-Boy galleries, is there anything you guys can do on your end to help that channel more from a -- maybe it's a new customer base to diversify it? Or is there a marketing message or is there partnerships? Or anything there to help kind of that channel that clearly has not -- or has faced, I guess, a better way to say is faced a little bit more pressure than what you've been able to navigate with your La-Z-Boy stores.

Melinda Whittington

Bob, thanks for the question. Yes, just to recap, of everything that we manufacture and sell as La-Z-Boy, in rough numbers, 2/3 of that goes through our La-Z-Boy network, of which over half of that is owned by the company.

And that leaves about 1/3 of what we manufacture, and that's decreasing a bit, but rough numbers, about 1/3 is going through those multi-branded retailers, which, again, are super important to us expanding our brand reach and getting to consumers that we wouldn't otherwise reach.

I think as I look at both of those buckets, we are working more closely today with our independently held La-Z-Boy stores than ever before as we strengthen our execution in retail, to make sure that, that consumer experience is consistent across all stores, whether they're independently held or company-owned.

And we're seeing some nice early wins in that space to really drive that independently owned base, which is a part of our wholesale customer, right, although they're very near and dear to us. To the multi-branded retailers, the strength of our brand and the fact that we are marketing the La-Z-Boy brand and can drive traffic into their stores is important.

And our pivot over recent years to really be partnered with strategic customers, multi-branded retailers who appreciate that and understand that and want to drive our brand for value creation for each of us is a big part of what we're doing. We are doubling down on making sure we've got the right assets in store to help those multi-branded retailers bring our brand alive. That's why our focus has been on things like our Comfort Studios and our branded space executions.

And certainly, as we're seeing some more challenging times, we are evaluating what more we can do to be the best partners we can be with those multi-branded retailers to make sure that our brand is coming through and creating value for them and for us.

Robert Griffin

Okay. That's helpful. And then I guess another strategic or high-level question, but have you found the current pricing environment more challenged to have kind of your value equation resonate given that you're more domestic-based and you just don't have as many -- as much tariff refunds to throw back into promotions. And that's a temporary but a notable headwind in kind of this period where tariff refunds are flowing back across the space?

Melinda Whittington

Sure. Great question. So a couple of things just on pricing and promotions overall. First thing is our North America footprint, as you say, has been -- that's core to our 100-year history and our ability to provide personalized, customized products in consumers' homes in a matter of weeks and so we're proud of that. It's core to our business, over -- well over half of what we sell is customized products.

So that's a model that's important. And it positions us well in that tariffs are relatively a small factor to us. But to your point, then tariff refunds are a small factor to us as well. That said, it's a model we've worked with for a long time, and we believe in it.

If I look at pricing overall, because of our customization, because of our quality, because of our comfort, we do command a premium. But at the same time, as you say, and we've talked about this one for a bet, that bifurcating consumer is real. So we still see very strong design sales.

We still see large tickets. We see folks willing to invest in whole room solutions and upgrades and leathers and power and are still spending, and we're seeing that channel grow. At the same time, we've been transparent around, we've worked to sharpen some opening price points, again, not deep discount relative to some in our industry, but to enable people that it's aspirational to get into the La-Z-Boy quality to give them that opportunity and some pared-down offerings.

So we continue to work on both ends of that spectrum of that bifurcated consumer, and we'll continue to stay close to that. Specifically to promotions, what I'd say is as we went through 4th of July, it's been pretty consistent with what we saw the last couple of holidays where there's been a sharpening of individual price points to maybe drive some traffic into stores, but overall, not a dramatic increase in spending.

Too early to tell on Labor Day. What we are seeing is just recently at the wholesale level, a little bit more deeper discounting in some cases. So as always, we watch those closely, both at the wholesale and the retail level. And we'll make sure that we are appropriately priced for the quality and service that we deliver, but at the same time, make sure we're competitive so that we can reach as many consumers with our brand as possible.

Robert Griffin

Helpful. And then I guess lastly for me, Taylor, a question for you. I mean, understanding there's a lot of moving parts right now between weak industry, strategic investments on your end with the supply chain as well as strategic investments for store growth and advertising.

But like when you strip back some of this aspect, like is there anything you can help us better understand kind of what's going on with the underlying margin performance of the business or just the core operating margin performance and I guess I'm just asking the context of like, is there too much going on right now in terms of all these initiatives hitting at once? Or do you kind of see the underlying performance of the business actually getting better, and we're just not able to really kind of see it through what we look at because it's masked by a lot of these transitory costs.

Taylor Luebke

So thanks for the question, Bobby. So let me try to distill it down probably in a couple of key chunks and we can iterate to make sure I get to the heart of your question. One is, yes, there is a lot going on which we are cognizant of.

But if anything, this is the right time for La-Z-Boy to have a lot going on when the industry is a little bit softer to make sure we're setting ourselves up as an optimized enterprise to really disproportionately gain whenever a recovery of some tail and emerges.

So it is a stress and friction on the organization, but the timing is right, and we're really supportive and aggressively going after these initiatives. On the different businesses, I'll just maybe comment in a couple of ways. One, retail, we continue to feel really, really positive about.

Hopefully, that came through in the release and the script and everything we've talked is both on sales as well as margin over the last year and even through the first quarter. So our Century Vision strategy is to disproportionately grow our retail business, and I think you see that coming through in the metrics. Wholesale, at least in the near term, particularly in the first quarter and even in the cautious outlook for the second quarter is a bit uneven and choppy right now. We're seeing those lower sales really having deleverage impacts.

Again, it's still a really important business for us, but we have some work to do again to make sure we're competitive but also driving value on that business. And then Joybird, I think I put in prepared remarks, it continues to be a drag. Our big -- our goal is to make that business more resilient. It's been more volatile than any of our other business, particularly over the last 1.5 years.

And our goal this year is to improve the cost structure, stabilize and consolidate the plant. So overall, I think really positive about our retail business, still positive on our La-Z-Boy wholesale business, although we have some work to do to just work through this kind of uneven backdrop.

Joybird, obviously, still more work to do as well. But overall, as we exit this year, down 2 less plants, as we work through our distribution transformation with the benefits to come from that, I feel good about, call it, the future sales growth and sustainable earnings growth of La-Z-Boy.

Operator

[Operator Instructions] Our next question is coming from Anthony Lebiedzinski of Sidoti.

Anthony Lebiedzinski

So first, I just wanted to follow up. Melinda, you said that you're working closely -- more closely with the dealer stores, and you said that there are some nice early wins as a result of that.

So is it possible for you to maybe share some examples of what you've done so far? And what do you expect to accomplish as you continue to work closer with your dealer stores?

Melinda Whittington

Sure, Anthony. If you think about our dealer relationships, these are 30-, 40-year-old relationships. And many of these folks were doing retail before our company was.

And so if I think about where those relationships have evolved over time, if I go back 10 years, we were still learning our way through really strong performance of retail. And much of where we are today is from what we've learned from them.

As examples, when we, gosh, 8 years ago, bought the Arizona franchise, they were one of our -- they were a group of our most -- our strongest performing stores in the entire network. And some of their performance metrics for -- or some of their assessments for how they hired people, we've used across our entire La-Z-Boy retail over time and some of their tools and trades.

So with each acquisition, we get stronger. And now we feel really good about our execution in retail. And so this chapter is a little bit more for many of our stores of giving back on what we've learned across all of those networks. It's a lot of -- it's blocking and tackling. It's learning -- it's our learnings across what's working and not in localized marketing. It's staffing takeaways and commission structures, it's selling model and training models. And so it's really just a very open sharing and partnership where sort of a rising tide lifts all boats.

Anthony Lebiedzinski

That's very helpful color. And then you noted a couple of times that you entered the quarter here with a solid backlog. Any way you can share more details about it? I don't know if you're prepared to give a number on that, but if you could just help us contextualize as far as the meaning of the solid backlog.

Melinda Whittington

No, I think importantly, it's just that we wanted to reinforce that we feel good about our wholesale business. It's been choppier, the throughput of Memorial Day sales coming in, our plant shutdown through Memorial Day week and then just disruptions through the summer took time for some of those orders to come through.

And we just wanted to reinforce with the solid backlog, the fact that the wholesale business remains very important to us. We think the consumer choppiness is going to just make those orders more lumpy and timing can drive a little bit of difference on any individual quarter of when those sales come in and then the throughput through our supply chain. But we -- again, we feel good about La-Z-Boy's performance across our wholesale channels.

Anthony Lebiedzinski

Got it. And then -- so as you move Joybird manufacturing to the U.S., can Joybird be profitable or at least breakeven if current sales levels remain stable?

Melinda Whittington

The journey for profitability on Joybird takes -- is multipronged, right, for sure. It's getting the marketing mix right and the investment levels right. It's a slightly less choppy consumer, and it's managing all the costs.

Really, the biggest single driver within our control is to be able to create -- is to make more of the cost variable than fixed and leveraging our established U.S. plants that are able to manage the volatility of throughput on a variable basis a little more effectively, a lot more effectively than a stand-alone single plant is a significant contributor for sure.

Operator

Well, we appear to have reached the end of our question-and-answer session. I will now turn the call back over to Mark for any closing comments.

Mark Becks

Thanks, Jenny. Melinda, Taylor and I will be in our offices for the remainder of the day to answer any follow-up questions. Thanks, and have a great day.

Operator

Thank you very much, everybody. This does conclude today's conference. You may disconnect your phone lines at this time, and have a wonderful day. We thank you for your participation.