La-Z-Boy Incorporated (NYSE:LZB) Q1 2020 Earnings Conference Call - Final Transcript

Aug 21, 2019 • 08:30 am ET


La-Z-Boy Incorporated (NYSE:LZB) Q1 2020 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen, and welcome to your La-Z-Boy Fiscal 2020 First Quarter Results Conference Call. [Operator Instructions]

At this time, it is my pleasure to turn the floor over to Ms. Kathy Liebmann, Director of Investor Relations. Ma'am, the floor is yours.

Kathy Liebmann

Thank you, Cynthia, and good morning. Thank you for joining us to discuss our fiscal 2020 first quarter results. With us this morning are Kurt Darrow, La-Z-Boy's Chairman, President, and Chief Executive Officer; and Melinda Whittington, CFO.

Kurt will open and close the call, and Melinda will speak to the financials midway through. We'll 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.

Before we begin the presentation, I'd like to remind you that some statements made in today's call include forward-looking statements about La-Z-Boy's future performance. Although we believe these statements to be reasonable, our actual results could differ materially. The most significant risk factors that could affect our future results are described in our annual report on Form 10-K. We encourage you to review those risk factors as well as other key information detailed in our SEC filings. Also, our earnings release is available under the News and Events tab on the Investor Relations page of our website, and it includes reconciliations of certain non-GAAP measures, which are also included as an Appendix at the end of our conference call Slide deck.

With that, I will now turn over the call to Kurt Darrow, La-Z-Boy's Chairman, President, and CEO. Kurt?

Kurt L. Darrow

Thank you, Kathy, and good morning, everyone. After yesterday's market closed, we released solid fiscal 2020 first quarter results, demonstrating the strength of the La-Z-Boy brand within today's challenging home furnishings environment as well as the power of our global supply chain.

Our retail segment delivered strong sales momentum and also nearly doubled operating profit. The broader La-Z-Boy Furniture Galleries network posted increases in the first quarter written same-store sales on a one, two and three-year basis. Within wholesale upholstery, while sales were flat, we still delivered GAAP operating margin of 9% and a non-GAAP operating margin of 9.5%. Additionally, we generated $19 million in cash from operating activities and returned $18 million to shareholders, who share purchases and dividends. But before getting into a discussion of each operating segment, I would like to take a few minutes to share some of the highlights of our La-Z-Boy branded business.

With respect to the brand platform, the launch of our advertising campaign featuring new brand ambassador Christian -- Kristen Bell is on track. While early in the process, market research reveals that once customers have seen the campaign, they are more interested in, and more likely to consider La-Z-Boy. Additionally, the research highlights an uptick in those indicating the La-Z-Boy brand is relevant to them and fits their style. During the quarter, we increased