During the Lazy Boy fiscal 2025 fourth quarter conference call, the company announces it will concentrate on company-owned retail metrics due to their dominance in the total network, discontinuing written same-store sales reports for the entire network. Additionally, non-GAAP financial measures are being renamed to adjusted financial measures for consistency with industry practice.

Despite ongoing economic and industry volatility, the company reported strong Q4 and fiscal year results, with consolidated delivered sales growth of 3% and 5% respectively. The retail segment saw an 8% sales increase in the quarter, driven by new stores and acquisitions, and the wholesale segment grew by 2%, led by the core North American Lazy Boy Wholesale business. The company maintained a robust balance sheet with $320 million in cash and no external debt, generating $187 million in operating cash flow and returning $113 million to shareholders. The success is attributed to the execution of the Century Vision strategy, controlling what can be controlled to drive growth, and the company's vertically integrated model and agile supply chain, which allow it to navigate the challenging environment.

The company is embarking on a multi-year project to revamp its distribution network and home delivery program to improve efficiency and consumer experience, aiming for double-digit wholesale margins. Despite facing challenges like severe storm damage to a manufacturing facility, agility and teamwork minimized customer delays. Amidst macroeconomic uncertainty, the focus shifts to leveraging brand strength, innovative marketing, and product offerings to maintain growth in the fragmented furniture and home furnishings industry. Joybird, a digitally native brand, experiences pressure but sees stronger sales trends in physical stores.

The company has made significant progress on its Century Vision strategic framework, aiming for double market growth and double-digit operating margins. Key achievements include expanding the Total Furniture Galleries network to 366 stores, with a target of over 400 stores, and growing the company-owned store footprint to 65% of the total network. The brand continues to expand through strategic partnerships and investments in comfort studios. A new brand identity is set to launch, focusing on relevance and digital applicability. Additionally, the Joy Bird brand saw a 5% sales increase, with plans for 3 to 4 new store openings. The company is strengthening its foundational capabilities across supply chain, technology, and people, anticipating an industry rebound facilitated by addressing housing shortages and potential interest rate cuts.

The company reported a 3% growth in sales to $571 million in the fourth quarter of fiscal 2025, driven by acquisitions, new stores, and momentum in the core North America Lazy Boy wholesale business. Adjusted operating income stood at $54 million, with an operating margin flat compared to the previous year due to various offsetting factors. The retail segment saw an 8% sales increase to $247 million, primarily due to new and acquired stores, while the wholesale segment's sales rose 2% to $402 million, influenced by growth in the core North America market. Full-year sales grew 3% to $2.1 billion, with adjusted operating income increasing by 1% to $161 million. The company also highlighted its robust balance sheet, strong cash generation, and capital allocation strategy focused on reinvestment and shareholder returns.

The company aims to achieve sales growth double the industry rate and double-digit operating margins, expecting consumers to face challenges from a volatile macroeconomic environment. For the fiscal first quarter, sales and an adjusted operating margin of 5.5 to 7% are anticipated, accounting for pressures from specific businesses and investments in distribution and delivery projects. Plans include opening around 15 new stores and mitigating global trade dynamics through strategic inventory, sourcing adjustments, vendor diversification, and potential pricing actions.

Lazy Boy Incorporated outlines its capital expenditure plans for fiscal 2026, focusing on the redesign of its distribution network, home delivery program, and manufacturing investments. The company aims to reinvest 50% of operating cash into the business and return the other 50% to shareholders through share repurchases and dividends. Emphasizing its century vision strategy, Lazy Boy Incorporated highlights its strong brand, vertical integration, agile supply chain, and robust balance sheet as foundations for continued growth. The company also celebrates being named to Newsweek's list of America's most loved brands and most trustworthy companies for 2025, attributing this recognition to its brand relevance and iconic status.

The company aims to increase its wholesale segment's margin to double digits over the long term, with initiatives including a multi-year distribution network project to reduce overheads, optimize routes, and improve service levels. The project is driven by the need for efficiency and support for the growing business following recent acquisitions. Despite challenges, the company saw a solid start to the year post-Memorial Day, emphasizing the importance of active engagement with consumers amid current market conditions.

The discussion highlights the company's sales outperformance for the quarter compared to the guidance issued in February, exploring the main reasons behind this success despite a softer start.

Following a challenging President's Day due to emerging macroeconomic news, the industry faced significant year-on-year growth struggles, particularly in February. Despite these challenges, the company focused on executing strategies to delight consumers and maintain strong B2B relationships, resulting in a stronger-than-expected end to the quarter. Amidst tariff expenses and potential pricing actions, the company has been proactive in planning for various trade policy scenarios, implementing nominal pricing increases and strategic inventory moves to mitigate impacts on the company and consumers.

The company discusses its plans for Joybird, emphasizing a cautious approach to expanding its physical store presence amidst challenging times for its urban, younger consumer base. While aiming to open 3 to 4 stores this year, the long-term goal remains to potentially exceed the initial 25 store target, prioritizing brand optimization and consumer experience.

In response to tariffs and rising input costs, Lazy Boy emphasizes its strong manufacturing footprint in the United States, positioning it well to navigate challenges. The company aims to deliver personalized furniture quickly to consumers while managing increased costs through strategic sourcing and timing of buys, with minimal concern for significant price hikes.

The discussion focuses on the company's fiscal year performance, with an emphasis on margin expansion and the impact of industry health and consumer behavior. Despite uncertain times, the company aims to outperform the industry and expand margins, adopting an agile approach to control internal factors and respond to external volatility.

The question and answer session concludes, with the management team offering their availability for the rest of the day to address any additional inquiries. Participants are thanked for their involvement and reminded to disconnect their phone lines.