La-Z-Boy (LZB) Q3 2026 earnings summary

Executive summary

• Sales rose 4% year-over-year to $542 million, driven by 11% growth in Retail and a 1% increase in Wholesale, partially offset by declines in Joybird and Casegoods.

• Retail expansion included four new company-owned stores and integration of a 15-store acquisition, the largest in company history.

• Operating margin was 5.5% (GAAP) and 6.1% (adjusted), with GAAP diluted EPS at $0.52 and adjusted EPS at $0.61.

• Operating cash flow for the quarter was $89 million, up 57% year-over-year.

• Strategic initiatives included the sale of Kincaid Upholstery, a letter of intent to sell non-core casegoods businesses, and the planned closure of the UK manufacturing facility.

Financial highlights

• Q3 2026 net sales: $541.6M (up from $521.8M in Q3 2025); GAAP operating income: $29.8M (down 15% year-over-year); adjusted operating income: $33.3M (down 6%).

• GAAP net income attributable to shareholders was $21.7M, down 24% year-over-year; adjusted net income was $25.1M, down 12%.

• Gross margin decreased 120 bps to 43.1% in Q3 2026; consolidated adjusted gross margin increased 10 bps year-over-year.

• Operating cash flow was $89M for the quarter; free cash flow for the nine months ended Q3 2026 was $119M, up from $74M prior year.

• Cash and cash equivalents at quarter-end were $306M, with no external debt.

Outlook and guidance

• Fiscal Q4 sales expected between $560M and $580M, with adjusted operating margin of 7.5%-9%.

• Five new company-owned stores to open in Q4, totaling 16 for the year.

• Capital expenditures projected at $80-$90M for the year, focused on store growth, manufacturing, and distribution.

• Full-year tax rate expected in the 27%-29% range; effective tax rate in Q3 2026 was 31.3%.

• Strategic initiatives expected to result in a $30M net sales decrease but 75-100 bps improvement in adjusted operating margin.