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La-Z-Boy posts 22% sales increase for Q3 of fiscal 2022
MONROE, Mich. — La-Z-Boy Inc. reported a 22% sales increase of $572 million compared with the third quarter of fiscal 2021 and consolidated operating margin of 6.9% vs. the prior year’s 7.3% for its fiscal 2022 third quarter ended Jan. 22.
“While delivering an improved top line, the quarter was marked by greater-than-expected supply chain volatility, which had significant near-term impact on the efficiency of our manufacturing capacity ramp plans, dampening delivered sales growth and profit margins,” said Melinda D. Whittington, president and CEO. “A shortage of component parts, record levels of COVID absenteeism in January and the challenge of hiring and training new employees at manufacturing facilities all contributed to the issues we faced as the quarter progressed.”
Whittington noted the COVID-related delays lasting 14 weeks in Vietnam impacted the company’s case goods production along with added freight costs.
The DTC Joybird’s delivered sales figures were a record $45 million in the third quarter 2022, representing a 56% increase compared with the same quarter last year. The company invested significantly in marketing to grow the brand, and this affected profit margins.
“Demand trends remain strong, and our backlog will support strengthening delivered sales as we increase capacity over time, but near-term production gains will be slower than previously expected,” said Bob Lucian, chief financial officer. “Global supply chain disruptions continue and disproportionately impact our higher-end products, which sell at a greater level in our La-Z-Boy Furniture Galleries stores, including our company-owned retail stores.”
The company anticipates case goods production to normalize in the first half of 2023.
Emphasizing the importance of La-Z-Boy’s customer and shareholder satisfaction, Whittington added, “Our No. 1 priority is to improve the agility of our supply chain in this high-demand environment to increase production more quickly and efficiently. While the challenges faced during the quarter were significant, we are managing through them to improve efficiencies, work down our backlog and service customers and consumers while achieving greater profitability.
“I remain very optimistic about the future of La-Z-Boy Inc. as we continue to make strategic investments to increase our market share and drive long-term profitable growth and returns for all stakeholders.”