La-Z-Boy Incorporated LZB reported fourth-quarter sales growth of 31.8% year-over-year to $684.57 million, beating the consensus of $664.91 million. The increase is attributable to higher production, pricing and surcharge actions, and an extra week.
Retail segment sales increased by 20% Y/Y to $233 million, and same-store sales increased 16% Y/Y. Joybird sales were up 40% Y/Y to $53 million. Wholesale segment sales increased by 33.6% Y/Y to $512.97 million.
Adjusted EPS was $1.07, above the consensus of $0.92.
The gross margin contracted by 313 bps to 39.6%. The operating margin expanded by 187 bps to 11.5%, with an operating income increase of 57.4% Y/Y.
The adjusted operating margin for the quarter was 9.4%, down by 56 bps.
During the quarter, LZB returned $22 million to shareholders via share repurchases and dividend payments. For FY22, LZB generated $79 million in cash from operating activities, compared to $309.92 million in FY21. La-Z-Boy ended FY22 with $249 million in cash.
“We expect current macroeconomic and geopolitical uncertainty and its effect on consumer sentiment will likely cause demand trends to remain volatile for the foreseeable future. We are beginning to increase investments in marketing to drive demand for our strong brands to leverage their power in the marketplace, controlling the controllables, and improving our agility to navigate global supply chain disruptions,” commented Bob Lucian, Chief Financial Officer.
1Q23 Outlook: La-Z-Boy expects sales of $560 million to $575 million (up 7% to 10% year-over-year) versus a consensus of $554.19 million and a consolidated non-GAAP operating margin of 6.5% to 7.5%.
Price Action: LZB shares are trading higher by 11.79% at $25.41 during the post-market session on Tuesday.