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Item 1. Financial Statements

2024-08-20 compared with 2024-02-20 · 83 added, 179 removed, 430 unchanged (38% of the section changed)

2 unchanged sentences

CONSOLIDATED STATEMENT OF INCOME

Quarter Ended Nine Months Ended

Quarter Ended

(Unaudited, amounts in thousands, except per share data) 7/27/2024 7/29/2023

10 unchanged sentences

Net income 26,804 27,926

Net (income) loss attributable to noncontrolling interests ( 44 ) 149 ( 986 ) ( 1,005 )

Net (income) attributable to noncontrolling interests ( 645 ) ( 447 )

Net income attributable to La-Z-Boy Incorporated $ 26,159 $ 27,479

4 unchanged sentences

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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LA-Z-BOY INCORPORATED

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Quarter Ended Nine Months Ended

Quarter Ended

(Unaudited, amounts in thousands) 7/27/2024 7/29/2023

Net income $ 26,804 $ 27,926

Other comprehensive income (loss)

Other comprehensive income

Currency translation adjustment 1,533 1,047

6 unchanged sentences

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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LA-Z-BOY INCORPORATED

3 unchanged sentences

Cash and equivalents $ 342,270 $ 341,098

Restricted cash 3,855 3,304

Receivables, net of allowance of $ 5,181 at 7/27/2024 and $ 5,076 at 4/27/2024

30 unchanged sentences

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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LA-Z-BOY INCORPORATED

CONSOLIDATED STATEMENT OF CASH FLOWS

Nine Months Ended

Quarter Ended

(Unaudited, amounts in thousands) 7/27/2024 7/29/2023

25 unchanged sentences

Cash flows from financing activities

Payments on debt and finance lease liabilities ( 346 ) ( 92 )

Holdback payments for acquisitions ( 5,000 ) ( 5,000 )

Payments on finance lease liabilities ( 145 ) ( 67 )

Stock issued for stock and employee benefit plans, net of shares withheld for taxes 7,874 ( 1,978 )

1 unchanged sentence

Dividends paid to shareholders ( 8,371 ) ( 7,852 )

Dividends paid to minority interest joint venture partners (1) ( 1,172 ) —

Net cash used for financing activities ( 34,315 ) ( 19,904 )

5 unchanged sentences

Capital expenditures included in payables $ 2,583 $ 7,188

(1) Includes dividends paid to joint venture minority partners resulting from the repatriation of dividends from our foreign earnings that we no longer consider permanently reinvested

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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LA-Z-BOY INCORPORATED

9 unchanged sentences

Net income — — 26,159 — 645 26,804

Other comprehensive income (loss) — — — 1,330 ( 40 ) 1,290

Stock issued for stock and employee benefit plans, net of cancellations and withholding tax 149 ( 221 ) ( 1,906 ) — — ( 1,978 )

Repurchases of 357 shares of common stock

( 357 ) ( 4,512 ) ( 5,138 ) — — ( 10,007 )

Stock option and restricted stock expense — 2,526 — — — 2,526

Dividends declared and paid ($ 0.1815 /share)

— — ( 7,852 ) — — ( 7,852 )

Dividends declared not paid ($ 0.1815 /share)

— — ( 72 ) — — ( 72 )

At July 29, 2023 $ 43,110 $ 356,684 $ 557,666 $ ( 4,198 ) $ 10,668 $ 963,930

Net income — — 27,199 — 495 27,694

Other comprehensive income (loss) — — — ( 3,194 ) ( 484 ) ( 3,678 )

Stock issued for stock and employee benefit plans, net of cancellations and withholding tax 91 32 ( 4 ) — — 119

Repurchases of 326 shares of common stock

( 326 ) ( 118 ) ( 9,561 ) — — ( 10,005 )

Stock option and restricted stock expense — 4,811 — — — 4,811

Dividends declared and paid ($ 0.1815 /share) (1)

— — ( 7,780 ) — ( 1,172 ) ( 8,952 )

Dividends declared not paid ($ 0.1815 /share)

( 129 ) — — ( 129 )

At October 28, 2023 $ 42,875 $ 361,409 $ 567,391 $ ( 7,392 ) $ 9,507 $ 973,790

Net income — — 28,640 — 44 28,684

Other comprehensive income — — — 1,335 326 1,661

7 unchanged sentences

— — ( 111 ) — — ( 111 )

At January 27, 2024 $ 42,613 $ 365,111 $ 575,376 $ ( 4,880 ) $ 9,666 $ 987,886

(1) Non-controlling interests include dividends paid to joint venture minority partners resulting from the repatriation of dividends from our foreign earnings that we no longer consider permanently reinvested.

At July 27, 2024 $ 42,015 $ 371,421 $ 590,308 $ ( 4,535 ) $ 11,267 $ 1,010,476

(Unaudited, amounts in thousands, except per share data) Common

7 unchanged sentences

Net income — — 27,479 — 447 27,926

Other comprehensive loss — — — ( 1,519 ) ( 519 ) ( 2,038 )

Other comprehensive income (loss) — — — 1,330 ( 40 ) 1,290

Stock issued for stock and employee benefit plans, net of cancellations and withholding tax 149 ( 221 ) ( 1,906 ) — — ( 1,978 )

7 unchanged sentences

At July 29, 2023 $ 43,110 $ 356,684 $ 557,666 $ ( 4,198 ) $ 10,668 $ 963,930

Net income — — 46,077 — 702 46,779

Other comprehensive loss — — — ( 3,201 ) ( 404 ) ( 3,605 )

Stock issued for stock and employee benefit plans, net of cancellations and withholding tax 100 ( 101 ) ( 7 ) — — ( 8 )

Stock option and restricted stock expense — 3,662 — — — 3,662

Dividends declared and paid ($ 0.165 /share)

— — ( 7,064 ) — — ( 7,064 )

Dividends declared not paid ($ 0.165 /share)

— — ( 70 ) — — ( 70 )

At October 29, 2022 $ 43,136 $ 347,036 $ 495,003 $ ( 10,517 ) $ 9,128 $ 883,786

Net income — — 31,726 — ( 149 ) 31,577

Other comprehensive income — — — 4,337 1,427 5,764

Stock issued for stock and employee benefit plans, net of cancellations and withholding tax 4 ( 7 ) ( 57 ) — — ( 60 )

Stock option and restricted stock expense — 3,377 — — — 3,377

Dividends declared and paid ($ 0.1815 /share)

— — ( 7,866 ) — — ( 7,866 )

Dividends declared not paid ($ 0.1815 /share)

— — ( 74 ) — — ( 74 )

At January 28, 2023 $ 43,140 $ 350,406 $ 518,732 $ ( 6,180 ) $ 10,406 $ 916,504

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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LA-Z-BOY INCORPORATED

6 unchanged sentences

The interim results reflected in the accompanying financial statements are not necessarily indicative of the results of operations that will occur for the full fiscal year ending April 26, 2025.

At January 27, 2024, we owned investments in two privately-held companies consisting of non-marketable preferred shares, warrants to purchase common shares, and convertible notes.

Each of these companies is a variable interest entity and we have not consolidated their results in our financial statements because we do not have the power to direct those activities that most significantly impact their economic performance and, therefore, are not the primary beneficiary.

Accounting Pronouncements Adopted in Fiscal 2025

1 unchanged sentence

ASU Description Adoption Date

ASU 2021-08 Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Fiscal 2024

Accounting Pronouncements not yet Adopted

The following table summarizes additional accounting pronouncements which we have not yet adopted, but we believe will not have a material impact on our accounting policies or our consolidated financial statements and related disclosures.

ASU Description Adoption Date

ASU 2023-09 Income Taxes - Improvements to Income Tax Disclosures Fiscal 2026

ASU 2023-07 Segment Reporting - Improvements to Reportable Segment Disclosures Fiscal 2025

ASU 2023-07 Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures Fiscal 2025

ASU 2023-05 Business Combinations - Joint Venture Formations (Subtopic 805-60):

2 unchanged sentences

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method Fiscal 2025

Change in Accounting Policy - Distribution Center Costs

In the first quarter of fiscal 2024, we made a voluntary change to the presentation of costs directly attributable to our distribution activities conducted through our distribution centers in the United States.

Our policy has changed from presenting these costs within selling, general and administrative ("SG&A") expense to presenting them as cost of sales.

We believe this presentation is preferable because it will enhance the comparability of our financial statements with those of our industry peers and align with how we internally manage supply chain costs and margin.

In accordance with US GAAP, the period presented below has been retrospectively adjusted to reflect the change to cost of sales and SG&A expense.

This change had no impact to sales, income from operations, net income, earnings per share, retained earnings or other components of equity or net assets.

(Unaudited, amounts in thousands) For the Quarter Ended January 28, 2023 For the Nine Months Ended January 28, 2023

Previously Reported Effect of Change As Adjusted Previously Reported Effect of Change As Adjusted

Cost of sales $ 326,296 $ 10,846 $ 337,142 $ 1,039,523 $ 32,528 $ 1,072,051

Gross profit 246,427 ( 10,846 ) 235,581 748,623 ( 32,528 ) 716,095

Selling, general and administrative expense 203,587 ( 10,846 ) 192,741 591,257 ( 32,528 ) 558,729

Accounting Pronouncements not yet Adopted

ASU Description Adoption Date

ASU 2023-09 Income Taxes (Topic 740):

Improvements to Income Tax Disclosures Fiscal 2026

None of the below acquisitions were significant to our consolidated financial statements, and, therefore, pro-forma financial information is not presented.

5 unchanged sentences

For federal income tax purposes, we amortize and deduct these indefinite-lived intangible assets and goodwill, if any, over 15 years.

Illinois and Indiana Acquisition

On December 11, 2023, we completed our acquisition of the Illinois and Indiana businesses that operate six independently owned La-Z-Boy Furniture Galleries ® stores and one distribution center for $ 18.4 million, inclusive of and subject to further customary adjustments.

The acquisition also included the purchase of buildings and land for five of the stores.

We paid total cash of $ 18.1 million during the third quarter of fiscal 2024 and the remaining consideration included forgiveness of accounts receivable and payments based on working capital adjustments.

As part of the acquisition, we recorded an indefinite-lived intangible asset of $ 4.2 million related to the reacquired rights described above.

Lafayette, Louisiana Acquisition

On October 23, 2023, we completed our acquisition of the Lafayette, Louisiana business that operates one independently owned La-Z-Boy Furniture Galleries ® store and one distribution center for $ 2.8 million, inclusive of and subject to further customary adjustments.

We paid total cash of $ 2.6 million during the second and third quarters of fiscal 2024 and the remaining consideration included forgiveness of accounts receivable and payments based on working capital adjustments.

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Davenport, Iowa Acquisition

On July 22, 2024, we completed our acquisition of the Davenport, Iowa business that operates one independently owned La-Z-Boy Furniture Galleries ® store for $ 7.4 million, inclusive of and subject to further customary adjustments.

We paid total cash of $ 5.8 million during the first quarter of fiscal 2025 and the remaining consideration included forgiveness of accounts receivable and payments based on working capital adjustments.

As part of the acquisition, we recorded an indefinite-lived intangible asset of $ 1.7 million related to the reacquired rights described above.

We also recognized $ 5.1 million of goodwill in our Retail segment related primarily to synergies we expect from the integration of the acquired store and future benefits of these synergies.

Colorado Springs, Colorado Acquisition

On July 17, 2023, we completed our acquisition of the Colorado Springs, Colorado business that operates two independently owned La-Z-Boy Furniture Galleries ® stores and one distribution center for $ 6.0 million, inclusive of and subject to further to customary adjustments.

We paid total cash of $ 5.6 million during the first and second quarters of fiscal 2024 and the remaining consideration included forgiveness of accounts receivable and payments based on working capital adjustments.

As part of the acquisition, we recorded an indefinite-lived intangible asset of $ 2.1 million related to the reacquired rights described above.

We also recognized $ 2.2 million of goodwill in our Retail segment related primarily to synergies we expect from the integration of the acquired stores and future benefits of these synergies.

Prior Year Acquisitions

Barboursville, West Virginia acquisition

On December 12, 2022, we completed our acquisition of the Barboursville, West Virginia business that operates one independently owned La-Z-Boy Furniture Galleries ® store.

This acquisition did not have a meaningful impact on our consolidated financial statements.

Spokane, Washington Acquisition

On September 26, 2022, we completed our acquisition of the Spokane, Washington business that operates one independently owned La-Z-Boy Furniture Galleries ® store and one distribution center for $ 4.7 million, inclusive of customary adjustments.

We paid total cash of $ 4.0 million during the second quarter of fiscal 2023 and the remaining consideration included forgiveness of accounts receivable and payments based on working capital adjustments.

As part of the acquisition, we recorded an indefinite-lived intangible asset of $ 1.2 million related to the reacquired rights described above.

We also recognized $ 3.0 million of goodwill in our Retail segment related primarily to synergies we expect from the integration of the acquired store and future benefits of these synergies.

Denver, Colorado Acquisition

On July 18, 2022, we completed our acquisition of the Denver, Colorado business that operates five independently owned La-Z-Boy Furniture Galleries ® stores and one distribution center for $ 10.1 million, inclusive of customary adjustments.

Colorado Springs, Colorado Acquisition

2 unchanged sentences

Cash and Restricted Cash

We have restricted cash on deposit with a bank as collateral for certain letters of credit.

All our letters of credit have maturity dates within the next twelve months, but we expect to renew some of these letters of credit when they mature.

At July 29, 2023, we had restricted cash on deposit with a bank as collateral for certain letters of credit that matured within 12 months.

During fiscal 2024, we renewed these letters of credit and as of April 27, 2024, we were no longer required to hold restricted cash as collateral.

All of our letters of credit have maturity dates within the next 12 months, and we expect to renew some of these letters of credit when they mature.

(Unaudited, amounts in thousands) 7/27/2024 7/29/2023

10 unchanged sentences

Total inventories $ 271,790 $ 263,237

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Goodwill and Other Intangible Assets

14 unchanged sentences

Translation adjustment 599 ( 42 ) — 557

Balance at January 27, 2024 (1)

Balance at July 27, 2024 (1)

$ 20,684 $ 143,979 $ 55,446 $ 220,109

2 unchanged sentences

Reportable Segment Intangible Asset Useful Life

Wholesale Segment Primarily acquired customer relationships from our acquisition of the wholesale business in the United Kingdom and Ireland Amortizable over useful lives that do not exceed 15 years

Wholesale Segment Customer relationships from our acquisition of the wholesale business in the United Kingdom and Ireland Amortizable over 15 year useful life

Wholesale Segment American Drew ® trade name

12 unchanged sentences

Translation adjustment — — ( 32 ) 49 17

Balance at January 27, 2024 $ 1,155 $ 1,995 $ 40,741 $ 1,742 $ 45,633

Balance at July 27, 2024 $ 1,155 $ 1,596 $ 44,279 $ 1,654 $ 48,684

We test indefinite-lived intangibles and goodwill for impairment on an annual basis in the fourth quarter of each fiscal year, and more frequently if events or changes in circumstances indicate that an asset might be impaired.

2 unchanged sentences

Our short-term investments are included in other current assets and our long-term investments are included in other long-term assets on our consolidated balance sheet.

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The following summarizes our investments:

20 unchanged sentences

The following table summarizes sales of marketable securities:

Quarter Ended Nine Months Ended

Quarter Ended

(Unaudited, amounts in thousands) 7/27/2024 7/29/2023

9 unchanged sentences

We accrue an estimated liability for product warranties when we recognize revenue on the sale of warrantied products.

We estimate future warranty claims on product sales based on our historical claims experience and periodically adjust the provision to reflect changes in actual experience.

We estimate future warranty claims on product sales based on sales volume and our historical claims experience and periodically adjust the provision to reflect changes in actual experience.

We incorporate repair costs into our liability estimates, including materials, labor and overhead amounts necessary to perform repairs, and any costs associated with delivering repaired product to our customers.

Over 90 % of our warranty liability relates to our Wholesale reportable segment, as we generally warrant our products against defects for one to three years on fabric and leather, from one to ten years on cushions and padding, and provide a limited lifetime warranty on certain mechanisms and frames, unless otherwise noted in the warranty.

Over 90 % of our warranty liability relates to our Wholesale reportable segment, as we generally warrant our products against defects for one to three years on fabric and leather, from one to five years on cushions and padding, and provide a limited lifetime warranty on certain mechanisms and frames, unless otherwise noted in the warranty.

Additionally, our Wholesale segment warranties cover labor costs relating to our parts for one year .

We provide a limited lifetime warranty against defects on a majority of Joybird products, which are a part of our Corporate and Other results.

For all our manufacturer warranties, the

warranty period begins when the consumer receives our product.

We provide a limited lifetime warranty against defects on a majority of the Joybird products, which are a part of our Corporate and Other results.

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manufacturer warranties, the warranty period begins when the consumer receives our product.

We use considerable judgment in making our estimates, and we record differences between our actual and estimated costs when the differences are known.

A reconciliation of the changes in our product warranty liability is as follows:

Quarter Ended Nine Months Ended

Quarter Ended

(Unaudited, amounts in thousands) 7/27/2024 (1)

4 unchanged sentences

Balance as of the end of the period $ 29,478 $ 30,794

(1) $ 19.8 million and $ 19.9 million is recorded in accrued expenses and other current liabilities as of January 27, 2024, and April 29, 2023, respectively, while the remainder is included in other long-term liabilities.

(1) $ 22.5 million and $ 22.4 million is recorded in accrued expenses and other current liabilities as of July 27, 2024, and April 27, 2024, respectively, while the remainder is included in other long-term liabilities.

(2) Accruals and settlements for fiscal 2024 have been revised.

The adjustments were offsetting and had no impact on the liability balance at the end of each reporting period in fiscal 2024 or the amount recognized in the consolidated statement of income for fiscal 2024.

We recorded accruals during the periods presented in the table above, primarily to reflect charges that relate to warranties issued during the respective periods.

1 unchanged sentence

The table below summarizes the total stock-based compensation expense we recognized for all outstanding grants in our consolidated statement of income:

Quarter Ended Nine Months Ended

Quarter Ended

(Unaudited, amounts in thousands) 7/27/2024 7/29/2023

1 unchanged sentence

Liability-based awards expense (1)

131 ( 54 ) 184 92

Total stock-based compensation expense $ 3,336 $ 2,614

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We recognize compensation expense for restricted stock over the vesting period equal to the fair value on the date our Compensation and Talent Oversight Committee of our board of directors approved the awards.

Restricted stock awards vest at 25 % per year, beginning one year from the grant date for a term of four years , with continued vesting upon retirement with respect to the fiscal 2023 and fiscal 2024 grants.

We accelerate the expense for restricted stock granted to retirement-eligible employees over the vesting period, with expense recognized from the grant date through their retirement eligibility date or over the ten months following the grant date, whichever period is longer.

1 unchanged sentence

The weighted-average fair value of the restricted stock that was awarded in the first quarter of fiscal 2025 was $ 38.04 per share, the market value of our common shares on the date of grant.

Restricted Stock Units Issued to Directors.

During the first nine months of fiscal 2024, we granted 35,736 restricted stock units to our non-employee directors.

Restricted stock units granted to our non-employee directors are offered at no cost to the directors and restricted stock units granted following August 2022 vest on the earlier of the date a director ceases to be a member of the board (for any reason other than the termination of service for cause) or the- one year anniversary of the grant date.

We account for these restricted stock units as equity-based awards because when they vest, they will be settled in shares of our common stock.

We measure and recognize compensation expense for these awards based on the market price of our common shares on the date of grant.

The weighted-average fair value of the restricted stock units granted to our non-employee directors in the first nine months of fiscal 2024 was $ 30.80 per share.

Performance Shares.

1 unchanged sentence

Payouts of these grants depend on our financial performance ( 50 %) and a market-based condition based on the total return our shareholders receive on their investment in our stock relative to returns earned through investments in other public companies ( 50 %).

The performance share opportunity ranges from 50 % of the employee’s target award if minimum performance requirements are met to a maximum of 200 % of the

target award based on the attainment of certain financial and shareholder-return goals over a specific performance period, which is generally three fiscal years.

The performance share opportunity ranges from 50 % of the employee’s target award if minimum performance requirements are met to a maximum of 200 % of the target award based on the attainment of certain financial and shareholder-return goals over a specific performance period, which is generally three fiscal years.

We account for performance-based shares as equity-based awards because when they vest, they will be settled in common shares.

In the event of an employee's termination during the vesting period, the potential right to earn shares under this program is generally forfeited and we have elected to recognize forfeitures as an adjustment to compensation expense in the same period in which the forfeitures occur.

For shares that vest based on our results relative to the performance goals, we expense as compensation cost the fair value of the shares as of the day we granted the awards recognized over the performance period, taking into account the probability that we will satisfy the performance goals.

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taking into account the probability that we will satisfy the performance goals.

The fair value of each share of the awards we granted in fiscal 2025 that vest based on attaining performance goals was $ 35.59 , the market value of our common shares on the date we granted the awards less the dividends we expect to pay before the shares vest.

4 unchanged sentences

Stock Options.

We did not grant stock options to employees during fiscal 2024, but we have stock options outstanding from grants from prior years.

We did not grant stock options to employees during the first quarter of fiscal 2025, but we have stock options outstanding from grants from prior years.

We account for stock options as equity-based awards because when they are exercised, they will be settled in common shares.

7 unchanged sentences

Accumulated Other Comprehensive Income (Loss)

Activity in accumulated other comprehensive income (loss) for the quarters ended January 27, 2024, and January 28, 2023, is as follows:

(Unaudited, amounts in thousands) Translation adjustment Unrealized gain (loss) on marketable securities Net pension amortization and net actuarial loss Accumulated other comprehensive income (loss)

Balance at October 28, 2023 $ ( 4,696 ) $ ( 12 ) $ ( 2,684 ) $ ( 7,392 )

Changes before reclassifications 2,147 454 — 2,601

Amounts reclassified to net income — — 31 31

Tax effect — ( 112 ) ( 8 ) ( 120 )

Other comprehensive income attributable to La-Z-Boy Incorporated 2,147 342 23 2,512

Balance at January 27, 2024 $ ( 2,549 ) $ 330 $ ( 2,661 ) $ ( 4,880 )

Balance at October 29, 2022 $ ( 6,551 ) $ ( 501 ) $ ( 3,465 ) $ ( 10,517 )

Changes before reclassifications 4,014 303 — 4,317

Amounts reclassified to net income — 78 49 127

Tax effect — ( 94 ) ( 13 ) ( 107 )

Other comprehensive income attributable to La-Z-Boy Incorporated 4,014 287 36 4,337

Balance at January 28, 2023 $ ( 2,537 ) $ ( 214 ) $ ( 3,429 ) $ ( 6,180 )

Activity in accumulated other comprehensive income (loss) for the nine months ended January 27, 2024 and January 28, 2023, is as follows:

Activity in accumulated other comprehensive income (loss) for the quarters ended July 27, 2024, and July 29, 2023, is as follows:

(Unaudited, amounts in thousands) Translation adjustment Unrealized gain (loss) on marketable securities Net pension amortization and net actuarial loss Accumulated other comprehensive income (loss)

4 unchanged sentences

Other comprehensive income attributable to La-Z-Boy Incorporated 1,207 113 15 1,335

Balance at January 27, 2024 $ ( 2,549 ) $ 330 $ ( 2,661 ) $ ( 4,880 )

Balance at July 27, 2024 $ ( 2,597 ) $ 359 $ ( 2,297 ) $ ( 4,535 )

Balance at April 29, 2023 $ ( 2,652 ) $ ( 145 ) $ ( 2,731 ) $ ( 5,528 )

2 unchanged sentences

Tax effect — ( 72 ) ( 8 ) ( 80 )

Other comprehensive income (loss) attributable to La-Z-Boy Incorporated ( 576 ) 84 109 ( 383 )

Balance at January 28, 2023 $ ( 2,537 ) $ ( 214 ) $ ( 3,429 ) $ ( 6,180 )

Other comprehensive income attributable to La-Z-Boy Incorporated 1,087 220 23 1,330

Balance at July 29, 2023 $ ( 1,565 ) $ 75 $ ( 2,708 ) $ ( 4,198 )

We reclassified both the unrealized gain (loss) on marketable securities and the net pension amortization from accumulated other comprehensive loss to net income through other income (expense), net.

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The components of noncontrolling interest were as follows:

Quarter Ended Nine Months Ended

Quarter Ended

(Unaudited, amounts in thousands) 7/27/2024 7/29/2023

Balance as of the beginning of the period $ 10,296 $ 10,261

Net income (loss) 44 ( 149 ) 986 1,005

Net income 645 447

Other comprehensive income (loss) 326 ( 40 )

Dividends distributed to joint venture minority partners — — ( 1,172 ) —

Balance as of the end of the period $ 11,267 $ 10,668

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The following table presents our revenue disaggregated by product category and by segment or unit:

Quarter Ended January 27, 2024 Quarter Ended January 28, 2023

(Unaudited, amounts in thousands) Wholesale Retail Corporate

and Other Total Wholesale Retail Corporate

and Other Total

Upholstered Furniture $ 300,568 $ 168,473 $ 46,187 $ 515,228 $ 322,461 $ 206,959 $ 35,253 $ 564,673

Casegoods Furniture 19,483 11,021 3,677 34,181 28,330 16,804 5,021 50,155

Delivery 39,633 8,430 1,773 49,836 50,008 8,105 1,654 59,767

Other (1) ( 3,309 ) 16,772 ( 13,505 ) ( 42 ) 6,804 19,289 ( 8,418 ) 17,675

Total $ 356,375 $ 204,696 $ 38,132 $ 599,203 $ 407,603 $ 251,157 $ 33,510 $ 692,270

Eliminations ( 98,797 ) ( 119,547 )

Consolidated Net Sales $ 500,406 $ 572,723

Nine Months Ended January 27, 2024 Nine Months Ended January 28, 2023

Quarter Ended July 27, 2024 Quarter Ended July 29, 2023

(Unaudited, amounts in thousands) Wholesale Retail Corporate

4 unchanged sentences

Delivery 38,513 7,382 2,068 47,963 40,043 7,571 1,902 49,516

Other (1) ( 27,482 ) 53,734 ( 39,255 ) ( 13,003 ) 55,052 59,371 ( 32,003 ) 82,420

15,119 16,738 5,645 37,502 13,806 18,125 6,559 38,490

Total $ 350,900 $ 202,370 $ 38,708 $ 591,978 $ 333,475 $ 208,243 $ 40,061 $ 581,779

1 unchanged sentence

Consolidated Net Sales $ 495,532 $ 481,651

(1) Primarily includes discounts and allowances, revenue for advertising, royalties, parts, accessories, after-treatment products, surcharges, rebates and other sales incentives.

In fiscal 2024, certain amounts that were previously charged as surcharges in fiscal 2023 are now included in the base product pricing and reflected in the amounts by product category.

Upholstered Furniture - Includes gross revenue for upholstered furniture, such as recliners, sofas, loveseats, chairs, sectionals, modulars, and ottomans.

This gross revenue includes sales to La-Z-Boy Furniture Galleries ® stores (including company-owned stores), operators of La-Z-Boy Comfort Studio ® locations, England Custom Comfort Center locations, other major dealers, independent retailers, and the end consumer.

Casegoods Furniture - Includes gross revenue for casegoods furniture typically found in a bedroom, such as beds, chests, dressers, nightstands and benches;

(1) Primarily includes revenue for advertising, royalties, parts, accessories, after-treatment products, surcharges, rebates and other sales incentives.

Upholstered Furniture - Includes revenue for upholstered furniture, such as recliners, sofas, loveseats, chairs, sectionals, modulars, and ottomans.

This revenue includes sales to La-Z-Boy Furniture Galleries ® stores (including company-owned stores), operators of La-Z-Boy Comfort Studio ® locations, England Custom Comfort Center locations, other major dealers, independent retailers, and the end consumer.

Casegoods Furniture - Includes revenue for casegoods furniture typically found in a bedroom, such as beds, chests, dressers, nightstands and benches;

furniture typically found in the dining room, such as dining tables, storage units, and stools;

and furniture typically found throughout the home, such as cocktail tables, chairsides, sofa tables, end tables, and entertainment centers.

This gross revenue includes sales to La-Z-Boy Furniture Galleries ® stores (including company-owned stores), independent retailers, and the end consumer.

This revenue includes sales to La-Z-Boy Furniture Galleries ® stores (including company-owned stores), independent retailers, and the end consumer.

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Contract Assets and Liabilities.

8 unchanged sentences

$ 133,075 $ 124,316

(1) During the nine months ended January 27, 2024, we recognized revenue of $ 138.8 million related to our contract liability balance at April 29, 2023.

(1) During the quarter ended July 27, 2024, we recognized revenue of $ 109.9 million related to our contract liability balance at April 27, 2024.

Segment Information

1 unchanged sentence

Wholesale Segment .

Our Wholesale segment consists primarily of three operating segments:

La-Z-Boy, our largest operating segment, our England subsidiary, and our casegoods operating segment that sells furniture under three brands:

American Drew ® , Hammary ® and Kincaid ® .

The Wholesale segment also includes our international wholesale and manufacturing businesses.

Our Wholesale segment consists primarily of four operating segments:

La-Z-Boy, our largest operating segment, our England subsidiary, our casegoods operating segment that sells furniture under three brands (American Drew ® , Hammary ® , and Kincaid ®) , and our international operating segment, which includes our international La-Z-Boy wholesale and manufacturing businesses.

We aggregate these operating segments into one reportable segment because they are economically similar and meet the other aggregation criteria for determining reportable segments.

3 unchanged sentences

Our Retail segment consists of one operating segment comprised of our 188 company-owned La-Z-Boy Furniture Galleries ® stores.

The Retail segment sells primarily upholstered furniture, in addition to some casegoods and other accessories, to end consumers through these stores.

The Retail segment sells primarily upholstered furniture, in addition to some casegoods and other home furnishings accessories, to end consumers through these stores.

Corporate and Other .

1 unchanged sentence

We consider our corporate functions to be other business activities and have aggregated them with our other insignificant operating segments, including our global trading company in Hong Kong and Joybird, an e-commerce retailer that manufactures upholstered furniture such as sofas, loveseats, chairs, ottomans, sleeper sofas and beds, and also imports casegoods (wood) furniture such as occasional tables and other accessories.

Joybird sells to the end consumer primarily online through its website, www.joybird.com.

Joybird sells to the end consumer primarily online through its website, www.joybird.com, and through small-format stores in key urban markets.

None of the operating segments included in Corporate and Other meet the requirements of reportable segments.

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The following table presents sales and operating income (loss) by segment:

Quarter Ended Nine Months Ended

Quarter Ended

(Unaudited, amounts in thousands) 7/27/2024 7/29/2023

19 unchanged sentences

Income before income taxes $ 35,966 $ 38,016

Our effective tax rate was 20.2 % and 24.5 % for the third quarter and first nine months ended January 27, 2024, respectively, compared with 27.7 % and 26.6 % for the third quarter and first nine months ended January 28, 2023, respectively.

The reduced effective tax rate in the third quarter of fiscal 2024 was primarily the result of favorable return to provision adjustments from the prior year.

Absent these discrete items, the effective tax rate would have been 25.6 % for the third quarter of fiscal 2024.

Our effective tax rate was 25.5 % for the quarter ended July 27, 2024, compared with 26.5 % for the quarter ended July 29, 2023.

The reduced effective tax rate in the first quarter of fiscal 2025 was partially the result of tax benefits from the vesting of stock-based compensation.

Our effective tax rate varies from the 21 % federal statutory rate primarily due to state taxes.

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Earnings per Share

The following is a reconciliation of the numerators and denominators we used in our computations of basic and diluted earnings per share:

Quarter Ended Nine Months Ended

Quarter Ended

(Unaudited, amounts in thousands, except per share data) 7/27/2024 7/29/2023

11 unchanged sentences

We exclude the effect of options from our diluted share calculation when the weighted average exercise price of the options is higher than the average market price, since including the options' effect would be anti-dilutive.

For the third quarter and nine months ended January 27, 2024, we excluded options to purchase 0.2 million shares and 0.5 million shares, respectively, from the diluted share calculation.

For the third quarter and nine months ended January 28, 2023, we excluded options to purchase 1.5 million shares from the diluted share calculation.

For the quarters ended July 27, 2024 and July 29, 2023, we excluded options to purchase 0.2 million shares and 0.7 million shares from the diluted share calculation, respectively.

Fair Value Measurements

8 unchanged sentences

We measure non-financial assets such as other intangible assets, goodwill, and other long-lived assets at fair value when there is an indicator of impairment, and we record them at fair value only when we recognize an impairment loss.

The following table presents the fair value hierarchy for those assets and liabilities we measured at fair value on a recurring basis at January 27, 2024 and April 29, 2023.

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The following table presents the fair value hierarchy for those assets and liabilities we measured at fair value on a recurring basis at July 27, 2024 and April 27, 2024.

There were no transfers into or out of Level 1, Level 2, or Level 3 for any of the periods presented.

At January 27, 2024

At July 27, 2024

Fair Value Measurements

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(1) Certain marketable securities investments are measured at fair value using net asset value per share under the practical expedient methodology.

At January 27, 2024 and April 29, 2023, we held marketable securities intended to enhance returns on our cash and to fund future obligations of our non-qualified defined benefit retirement plan, our executive deferred compensation plan and our performance compensation retirement plan.

At July 27, 2024 and April 27, 2024, we held marketable securities intended to enhance returns on our cash and to fund future obligations of certain retirement plans.

The fair value measurements for our Level 1 and Level 2 securities are based on quoted prices in active markets, as well as through broker quotes and independent valuation providers, multiplied by the number of shares owned exclusive of any transaction costs.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements