La-Z-Boy Incorporated (NYSE:LZB) Q2 2019 Earnings Conference Call - Final Transcript

Nov 29, 2018 • 08:30 am ET


La-Z-Boy Incorporated (NYSE:LZB) Q2 2019 Earnings Conference Call - Final Transcript


Loading Event

Loading Transcript


Greetings and welcome to the La-Z-Boy Incorporated Fiscal 2019 Second Quarter Results Call. At this time, all participants are in a listen-only-mode. A brief question-and-answer session will follow the formal presentation.

(Operator Instructions) As a reminder, this conference is being recorded. It is now, my pleasure to introduce your host, Kathy Liebmann, Director of IR and Corporate Communications. Thank you, you may begin.

Kathy Liebmann

Thank you, Michelle. Good morning and thank you for joining us to discuss our fiscal 2019 second quarter results. With us today are Kurt Darrow, La-Z-Boy's Chairman, President and CEO, and Melinda Whittington, SVP and CFO. Kurt will open and close the call and Melinda will speak to the financials midway through, we will then open the call to questions.

Slides will accompany this presentation and you may view them through our webcast link, which will be available for one year and the telephone replay of the call will be available for one week beginning this afternoon.

These regular quarterly investor conference calls are one of La-Z-Boy's primary vehicles to communicate with investors about the Company's current operations and future prospects.

(Forward-Looking Cautionary Statements)

And with that, let me turn over the call to Kurt Darrow, La-Z-Boy's Chairman, President and CEO. Kurt?

Kurt Darrow

Thank you, Kathy and good morning. Yesterday afternoon, we reported our results for the fiscal 2019 second quarter. We posted a double-digit consolidated sales increase of 12% fueled by solid base business growth and the consolidation of our recent acquisitions. Sales in our Upholstery business grew 4%, the La-Z-Boy Furniture Galleries network posted its seventh consecutive increase for written same-store sales and the company's owned retail segment, turned in a solid 4% positive comp for delivered same-store sales.

Beyond this solid base, we are pleased with the early performance of our two recent acquisitions. Joybird, an eCommerce retailer and manufacturer of upholstered furniture and the Arizona-based La-Z-Boy Furniture Galleries stores. I will speak in more detail about both of them in a few minutes.

We are presenting our results on both a GAAP and non-GAAP basis to better help you understand the underlying business trends, excluding purchase accounting adjustments on the acquisitions, which Melinda will go into great detail later on.

As such, our GAAP operating margin was 6.5% for the quarter and 7.3% on a non-GAAP basis. Importantly, we are delivering top quartile operating margins for the wholesale furniture industry, with our results exhibiting the power of our brands, world class supply chain and our integrated retail model, even as we were there high input costs and tariff uncertainty. Additionally, we continue to make strategic investments across the business to strengthen our operations and drive long-term results.

Finally, over the past 12-months, we generated $111 million in cash from operating activities and returned $60 million to shareholders through dividends and share purchases. And yesterday, our Board of Directors, voted to increase our quarterly dividend to shareholders to $0.13 per share, representing an 8% increase. We are proud of what we have accomplished to date and