La-Z-Boy Incorporated (NYSE:LZB) Q4 2019 Earnings Conference Call - Final Transcript

Jun 19, 2019 • 08:30 am ET

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La-Z-Boy Incorporated (NYSE:LZB) Q4 2019 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Absolutely. Thank you. The floor is now open for questions. (Operator Instructions) And we'll take our first question from Bradley Thomas with KeyBanc Capital Markets. Please go ahead.

Analyst
Bradley Thomas

Hey. Good morning, Kurt, Melinda and Kathy. Let's see. I wanted to focus on the sales trends and just follow up on the slowdown that you all experienced in the quarter in the Upholstery and Casegood segments. And Kurt, if you could just give us an update about how you're thinking about the health of those two segments going forward, particularly when you contrast it against what's been very strong same-store sales and strong merchandise and an exciting new advertising campaign that's been helping your Retail segment?

Executive
Kurt L. Darrow

Well, I would have a couple of comments on that, Brad. Number one, we reminded people earlier that we are in the furniture business and everybody that reported numbers in the first four months, five months of the year showed a slowdown. And we weren't immune to that. But our US business is fairly healthy.

But then you take the effects for the La-Z-Boy brand, then you take the effects of -- we've got a significant business in Canada which we talked about in the call. We've got a business in the UK. And with what's going on there and when things get a little tougher sometimes, our non-branded companies don't do quite as well as the La-Z-Boy brand. So, it's a mixture of things there that we're dealing with. And similarly, we talked in February about we were pleased with Presidents' Day weekend and things got softer after that. We were very pleased with the Memorial Day weekend, but that's no prediction that the trend is going to continue.

So, we don't think there's anything systemically wrong. I think, you see with our store performance that the core La-Z-Boy brand is holding up real well, but we've got some other parts of that business that have normally, they've been consistent with the La-Z-Boy brand. And for the last few months, that hasn't been the case.

Analyst
Bradley Thomas

And then with respect to the price increases that you are putting through, can you just give us an update as of today, how much are prices up maybe year-over-year? And as you look forward, the next couple of quarters, do we need to put through more price increases, given the timing that raw materials are coming in and goods are coming in that are hit with the tariff? How should we think about that?

Executive
Kurt L. Darrow

I think we outlined that, Brad, pretty well in the call. We took a 2% and 3% increase on the first round of tariffs, which was some time ago. And this next time around, it's --

Executive
Melinda Whittington

We're up to -- with the Chinese tariffs on our portfolio, we're up to about 4% across the portfolio. It depends on if you're a power or a non-power on the Chinese tariffs. Of course, everything's volatile. That's what the adjustment. The first round of Chinese tariffs, we took