La-Z-Boy Inc (LZB), a leading furniture company, is grappling with the impact of international regulatory changes and trade policies, leaving their supply chain facing increased challenges. The COVID-19 pandemic has also added strain to the global supply chain and consumer demand. As a result, the company’s revenue and overall cost of goods sold are significantly affected.
The company primarily sources its components and finished goods from Mexico, China, and Vietnam. As a result of new or increased duties, tariffs, and retaliatory tariffs imposed by the United States, La-Z-Boy has seen a significant increase in the price of furniture, accessories, and raw materials used in its domestic operation. Although the company is making efforts to mitigate the impact of these tariffs, they may not be able to sufficiently pass price increases onto their customers or find alternative sources for their products and materials.
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USMCA and Regulatory Risks
Additionally, as a participant in the US-Mexico-Canada Agreement (USMCA), La-Z-Boy is exposed to risks associated with changes in domestic and international regulatory environments concerning various laws and regulations relating to labor and employment, customs, sanctions, truth-in-advertising, consumer protection, e-commerce, privacy, health and safety, real estate, environmental and zoning and occupancy, intellectual property, anti-corruption laws, and other laws that regulate retailers and manufacturers.
If certain tariffs were to be eliminated or reduced, more foreign manufacturers could enter the US market and potentially put pressure on La-Z-Boy’s prices and margins, ultimately leading to a negative effect on the company’s results of operations. Moreover, the company’s business in the United Kingdom could potentially be impacted by the country’s exit from the European Union, leading to adverse effects on their sales and margins in both the UK and other foreign countries due to the imposition of import bans, quotas, and increased tariffs.
Compliance and Reputational Risks
La-Z-Boy has implemented stringent policies and procedures to ensure compliance with international laws and regulations. However, employees, contractors, or agents may still violate these policies and expose the company to potential legal liability and reputational damage. Given that La-Z-Boy’s reputation and brand are crucial to its operations, any lapse in compliance could incur substantial costs, including litigation expenses, and lead to a reduction in customers and revenue.
Other Risks and Challenges
Beyond regulatory challenges, La-Z-Boy also faces risks associated with unsettled political conditions, natural or man-made disasters, adverse weather, climate change, acts of war or terrorism, pandemics, and other public health concerns. These factors may cause disruptions to the company’s manufacturing plants, distribution facilities, or retail stores, making it more difficult to service customers and resulting in potential loss of sales and customers.
Overall, La-Z-Boy has been contending with several operational and financial challenges stemming from global tariffs and regulatory changes. The company continues to adapt itself and mitigate these risks through updated policies, supply chain management, and strategic decisions. However, the impact of these challenges on La-Z-Boy Inc’s future performance remains uncertain, as the global economic and regulatory environment continues to evolve.
Income Statement
Financials in millions USD. Fiscal year is May – April. source
| Year | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 – 1997 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 0 | Revenue | 2349.43 | 2356.81 | 1734.24 | 1703.98 | 1745.4 | 1583.95 | 1520.06 | 1525.4 | 1425.4 | 1357.32 | Upgrade |
| 1 | Revenue Growth (YoY) | -0.31% | 35.90% | 1.78% | -2.37% | 10.19% | 4.20% | -0.35% | 7.02% | 5.02% | 6.55% | Upgrade |
| 2 | Cost of Revenue | 1340.73 | 1440.84 | 993.98 | 982.54 | 1042.83 | 961.2 | 910.76 | 940.42 | 920.9 | 892.86 | Upgrade |
| 3 | Gross Profit | 1008.7 | 915.97 | 740.26 | 721.45 | 702.57 | 622.75 | 609.3 | 584.98 | 504.49 | 464.45 | Upgrade |
| 4 | Selling, General & Admin | 797.26 | 709.21 | 603.52 | 575.82 | 572.9 | 493.38 | 475.96 | 459.65 | 401.33 | 375.16 | Upgrade |
| 5 | Other Operating Expenses | 0 | 0 | 0 | 26.86 | 0 | 0 | 2.51 | 0 | 0 | 0 | Upgrade |
| 6 | Operating Expenses | 797.26 | 709.21 | 603.52 | 602.68 | 572.9 | 493.38 | 478.47 | 459.65 | 401.33 | 375.16 | Upgrade |
| 7 | Operating Income | 211.44 | 206.76 | 136.74 | 118.76 | 129.67 | 129.37 | 130.83 | 125.33 | 103.17 | 89.3 | Upgrade |
| 8 | Interest Expense / Income | 0.54 | 0.9 | 1.39 | 1.29 | 1.54 | 0.54 | 1.07 | 0.49 | 0.52 | 0.55 | Upgrade |
| 9 | Other Expense / Income | 6.39 | 2.68 | -9.5 | 3.81 | 34.37 | 0.67 | 0.08 | 1.51 | -5.09 | 2.31 | Upgrade |
| 10 | Pretax Income | 204.51 | 203.18 | 144.85 | 113.66 | 93.76 | 128.16 | 129.68 | 123.33 | 107.73 | 86.44 | Upgrade |
| 11 | Income Tax | 53.85 | 53.16 | 38.38 | 36.19 | 25.19 | 47.3 | 43.76 | 44.08 | 36.95 | 31.38 | Upgrade |
| 12 | Net Income | 150.66 | 150.02 | 106.46 | 77.47 | 68.57 | 80.87 | 85.92 | 79.25 | 70.77 | 55.06 | Upgrade |
| 13 | Net Income Growth | 0.43% | 40.91% | 37.42% | 12.97% | -15.20% | -5.88% | 8.42% | 11.98% | 28.55% | 18.68% | Upgrade |
| 14 | Shares Outstanding (Basic) | 43 | 44 | 46 | 46 | 47 | 48 | 49 | 50 | 52 | 52 | Upgrade |
| 15 | Shares Outstanding (Diluted) | 43 | 44 | 46 | 47 | 47 | 48 | 49 | 51 | 52 | 54 | Upgrade |
| 16 | Shares Change | -2.38% | -4.47% | -0.79% | -1.26% | -1.67% | -2.70% | -2.55% | -3.02% | -2.76% | 0.27% | Upgrade |
| 17 | EPS (Basic) | 3.49 | 3.41 | 2.31 | 1.67 | 1.46 | 1.69 | 1.75 | 1.57 | 1.36 | 1.04 | Upgrade |
| 18 | EPS (Diluted) | 3.48 | 3.39 | 2.30 | 1.66 | 1.44 | 1.67 | 1.73 | 1.55 | 1.34 | 1.02 | Upgrade |
| 19 | EPS Growth | 2.65% | 47.39% | 38.55% | 15.28% | -13.77% | -3.47% | 11.61% | 15.67% | 31.37% | 20.00% | Upgrade |
| 20 | Free Cash Flow Per Share | 3.16 | 0.06 | 5.91 | 2.55 | 2.19 | 1.67 | 2.61 | 1.79 | 0.32 | 1.09 | Upgrade |
| 21 | Dividend Per Share | 0.693 | 0.630 | 0.360 | 0.540 | 0.500 | 0.460 | 0.420 | 0.360 | 0.280 | 0.200 | Upgrade |
| 22 | Dividend Growth | 10.00% | 75.00% | -33.33% | 8.00% | 8.70% | 9.52% | 16.67% | 28.57% | 40.00% | 150.00% | Upgrade |
| 23 | Gross Margin | 42.93% | 38.86% | 42.68% | 42.34% | 40.25% | 39.32% | 40.08% | 38.35% | 35.39% | 34.22% | Upgrade |
| 24 | Operating Margin | 9.00% | 8.77% | 7.88% | 6.97% | 7.43% | 8.17% | 8.61% | 8.22% | 7.24% | 6.58% | Upgrade |
| 25 | Profit Margin | 6.41% | 6.37% | 6.14% | 4.55% | 3.93% | 5.11% | 5.65% | 5.20% | 4.97% | 4.06% | Upgrade |
| 26 | Free Cash Flow Margin | 5.80% | 0.10% | 15.68% | 6.94% | 5.86% | 5.01% | 8.40% | 5.89% | 1.15% | 4.21% | Upgrade |
| 27 | Effective Tax Rate | 26.33% | 26.17% | 26.50% | 31.84% | 26.86% | 36.90% | 33.74% | 35.74% | 34.30% | 36.31% | Upgrade |
| 28 | EBITDA | 321.75 | 316.79 | 244.83 | 213.81 | 126.45 | 160.47 | 159.88 | 150.34 | 130.53 | 110.17 | Upgrade |
| 29 | EBITDA Margin | 13.69% | 13.44% | 14.12% | 12.55% | 7.24% | 10.13% | 10.52% | 9.86% | 9.16% | 8.12% | Upgrade |
| 30 | Depreciation & Amortization | 116.7 | 112.71 | 98.59 | 98.87 | 31.15 | 31.77 | 29.13 | 26.52 | 22.28 | 23.18 | Upgrade |
| 31 | EBIT | 205.05 | 204.08 | 146.24 | 114.95 | 95.3 | 128.7 | 130.75 | 123.82 | 108.25 | 86.99 | Upgrade |
| 32 | EBIT Margin | 8.73% | 8.66% | 8.43% | 6.75% | 5.46% | 8.13% | 8.60% | 8.12% | 7.59% | 6.41% | Upgrade |
Note that we may hold securities mentioned in this article. All data is based on recent SEC filings. Even though we have implemented various manual and automatic fact-checking and data acquisition processes, some incorrect information may have slipped through (false positive). Let us know if you find any inconsistencies!