La-Z-Boy’s second quarter was met with a significant negative market reaction, reflecting investor concerns around flat sales and profitability pressures. While management highlighted modest growth in both Retail and Wholesale segments, ongoing weakness in store traffic and a notable decline in the Joybird business weighed on results. CEO Melinda Whittington described the consumer environment as “increasingly challenged,” attributing margin compression to new store investments and promotional activity. The company acknowledged that “de-leverage in same-store sales and investment in new store openings” drove down operating margins.
Is now the time to buy LZB? Find out in our full research report (it’s free).
La-Z-Boy (LZB) Q2 CY2025 Highlights:
- Revenue: $492.2 million vs analyst estimates of $490.4 million (flat year on year, in line)
- Adjusted EPS: $0.47 vs analyst expectations of $0.53 (10.8% miss)
- Adjusted EBITDA: $34.82 million vs analyst estimates of $39.25 million (7.1% margin, 11.3% miss)
- Revenue Guidance for Q3 CY2025 is $520 million at the midpoint, below analyst estimates of $528.4 million
- Operating Margin: 4.5%, down from 6.5% in the same quarter last year
- Locations: 907 at quarter end, up from 892 in the same quarter last year
- Market Capitalization: $1.51 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From La-Z-Boy’s Q2 Earnings Call
- Taylor Zick (KeyBanc Capital Markets) asked about sequential trends and August performance; CEO Melinda Whittington said traffic improvements are “too early to call a trend,” given ongoing consumer headwinds.
- Taylor Zick (KeyBanc Capital Markets) inquired about margin impact from new stores; CFO Taylor Luebke explained margins are pressured in year one, improving by year three as stores mature.
- Taylor Zick (KeyBanc Capital Markets) asked about wholesale customer sentiment amid tariff uncertainty; Whittington noted La-Z-Boy’s North American supply chain lessens tariff impact, keeping wholesale steady.
- Anthony Lebiedzinski (Sidoti) questioned regional differences in sales; Whittington reported no major U.S. geographic shifts but noted Canadian sales volume is pressured by tariffs, offset by price adjustments.
- Robert Griffin (Raymond James) pressed for detail on cadence of written business and margin impacts; Luebke and Whittington described a mix of softer than expected same-store sales, new store drag, and inventory discounting affecting quarterly profitability.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will focus on (1) the pace and profitability of new store openings and the integration of the Southeast acquisition, (2) early evidence of cost savings or operational improvements from the distribution network transformation, and (3) stabilization or recovery in the Joybird segment’s sales and profitability. Execution of these initiatives will be crucial for La-Z-Boy’s ability to offset a soft consumer environment and lay groundwork for future growth.
La-Z-Boy currently trades at $36.97, down from $39.13 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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