What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-06-17 compared with 2024-06-17 · 73 added, 73 removed, 199 unchanged (42% of the section changed)

4 unchanged sentences

Refer to "Cautionary Note Regarding Forward-Looking Statements” at the beginning of this report for a discussion of factors that may cause results to differ materially.

Note that our 2024 and 2023 fiscal years included 52 weeks, whereas fiscal year 2022 included 53 weeks.

We are the leading global producer of reclining chairs and one of the largest manufacturer/distributors of residential furniture in the United States .

Note that our 2025, 2024 and 2023 fiscal years all included 52 weeks.

We are the leading global producer of reclining chairs and one of the largest manufacturers/distributors of residential furniture in the United States .

The La-Z-Boy Furniture Galleries ® stores retail network is the third largest retailer of single-branded furniture in the United States .

8 unchanged sentences

• Leveraging our connection to comfort and reinvigorating our brand with a consumer focus and expanded omni-channel presence.

Our strategic initiatives to leverage and reinvigorate our iconic La-Z-Boy brand center on a renewed focus on leveraging the compelling La-Z-Boy comfort message, accelerating our omni-channel offering, and identifying additional consumer-base growth opportunities.

We leverage our consumer insights to develop and deliver

on-trend upholstered furniture, particularly in the motion and reclining categories.

We launched our new brand campaign and marketing platform in fiscal 2024, Long Live the Lazy , with compelling, consumer inspired, messaging designed to increase recognition and consideration of the brand.

We expect this new messaging will enhance the appeal of our brand with a broader consumer base.

identifying additional consumer-base growth opportunities.

We leverage our consumer insights to develop and deliver on-trend upholstered furniture, particularly in the motion and reclining categories.

We launched our brand campaign and marketing platform in fiscal 2024, Long Live the Lazy , with compelling, consumer inspired, messaging designed to increase recognition and consideration of the brand.

We expect that this messaging will enhance the appeal of our brand with a broader consumer base.

Further, our goal is to connect with consumers along their purchase journey through multiple means, whether online or in person.

6 unchanged sentences

• Expanding the reach of our wholesale distribution channels.

Consumers experience the La-Z-Boy brand in many channels including the La-Z-Boy Furniture Galleries ® store network and the La-Z-Boy Comfort Studio ® locations, our store-within-a-store format.

While consumers increasingly interact with the brand digitally, our consumers also demonstrate an affinity for visiting our stores to shop, allowing us to frequently deliver the flagship La-Z-Boy Furniture Galleries ® store, or La-Z-Boy Comfort Studio ® , experience and provide design services.

Consumers experience the La-Z-Boy brand in many channels including the La-Z-Boy Furniture Galleries ® store network, the La-Z-Boy Comfort Studio ® locations, our store-within-a-store format, and La-Z-Boy branded space locations.

While consumers increasingly interact with the brand digitally, our consumers also demonstrate an affinity for visiting our stores to shop, allowing us to frequently deliver the flagship La-Z-Boy Furniture Galleries ® store, La-Z-Boy Comfort Studio ® , or La-Z-Boy branded space experience and provide design services.

In addition to our branded distribution channels, approximately 1,900 other dealers sell La-Z-Boy products, which include some of the best-known names in the industry, providing us the benefit of multi-channel distribution.

2 unchanged sentences

• Profitably growing the Joybird brand with a digital-first consumer experience.

During fiscal 2019, we purchased Joybird, a leading e-commerce retailer and manufacturer of upholstered furniture with a direct-to-consumer model.

We believe that Joybird is a brand with significant potential and our strategic initiatives in this area focus on fueling profitable growth through an increase in digital marketing spend to drive awareness and customer acquisition, ongoing investments in technology, an expansion of product assortment, and providing additional small-format stores in key urban markets to enhance our consumers' omni-channel experience.

Joybird is a leading omni-channel, direct to consumer retailer and manufacturer of upholstered furniture.

We believe that Joybird is a brand with significant potential and our strategic initiatives in this area focus on fueling profitable growth through the opening of additional small-format stores in key urban markets, an increase in digital marketing spend to drive awareness and customer acquisition, ongoing investments in technology, and an expansion of product assortment.

Enhancing our enterprise capabilities

11 unchanged sentences

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

Our Wholesale segment manufactures and imports upholstered furniture, such as recliners and motion

furniture, sofas, loveseats, chairs, sectionals, modulars, ottomans and sleeper sofas and imports casegoods (wood) furniture such as bedroom sets, dining room sets, entertainment centers and occasional pieces.

The Wholesale segment sells directly to La-Z-Boy Furniture Galleries ® stores, operators of La-Z-Boy Comfort Studio ® locations, England Custom Comfort Center locations, major dealers, and a wide cross-section of other independent retailers.

Our Wholesale segment manufactures and imports upholstered furniture, such as recliners and motion furniture, sofas, loveseats, chairs, sectionals, modulars, ottomans and sleeper sofas and imports casegoods (wood) furniture such as bedroom sets, dining room sets, entertainment centers and occasional pieces.

The Wholesale segment sells directly to La-Z-Boy Furniture Galleries ® stores, operators of La-Z-Boy Comfort Studio ® and branded space locations, England Custom Comfort Center locations, major dealers, and a wide cross-section of other independent retailers.

• Corporate and Other .

Corporate and Other includes the shared costs for corporate functions, including human resources, information technology, finance and legal, in addition to revenue generated through royalty agreements with companies licensed to use the La-Z-Boy ® brand name on various products.

Corporate and Other includes the shared costs for corporate functions, including human resources, information technology, finance and accounting, and legal, in addition to revenue generated through royalty agreements with companies licensed to use the La-Z-Boy ® brand name on various products.

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.

6 unchanged sentences

Supply Chain Optimization

During the third quarter of fiscal 2023, we made the decision to close our manufacturing facility in Torreón, Mexico as part of our initiative to drive improved efficiencies through optimized staffing levels within our plants.

As a result of this action, charges were recorded within the Wholesale segment in the third and fourth quarters of fiscal 2023, totaling $9.2 million in selling, general, and administrative ("SG&A") expense for the impairment of various assets, primarily long-lived assets, and $1.6 million in cost of sales, primarily related to severance.

During the first quarter of fiscal 2024, we terminated our lease on the Torreón facility and recognized a $1.2 million gain in SG&A expense within the Wholesale segment related to the settlement of our lease obligation on the previously impaired long-lived assets.

During the second quarter of fiscal 2024, we announced further actions intended to drive efficiencies and optimize our manufacturing capacity in our global supply chain operations.

As part of this initiative, we made the decision to shift upholstery production from our Ramos, Mexico operations to our other upholstery plants and relocate our cut and sew operations back to Ramos, Mexico, resulting in the permanent closure of our leased cut and sew facility in Parras, Mexico, which is expected to be completed by the end of the first quarter of fiscal 2025.

During the second quarter of fiscal 2024, we announced actions intended to drive efficiencies and optimize our manufacturing capacity in our global supply chain operations.

As a result of these actions, charges were recorded within the Wholesale segment in the second, third, and fourth quarters of fiscal 2024, totaling $4.3 million in cost of sales, primarily related to severance, and $4.2 million in SG&A expense for the accelerated depreciation and impairment of fixed assets.

Additionally, as result of a significant customer transition and a challenging consumer demand environment in the United Kingdom, during the fourth quarter of fiscal 2025, we recorded charges within the Wholesale segment of $20.6 million for the full impairment of the United Kingdom reporting unit's goodwill and $2.1 million in SG&A expense for the impairment of various long-lived assets in the United Kingdom.

Refer to Note 6, Goodwill and Other Intangible Assets, for further information regarding our fiscal 2025 impairment testing.

Further, as we continue to drive efficiencies and optimize our manufacturing capacity in the United Kingdom to meet current demand, during the fourth quarter of fiscal 2025 we recorded severance-related charges of $1.1 million in cost of sales within the Wholesale segment.

La-Z-Boy Incorporated

4 unchanged sentences

Operating margin 6.4% 7.4%

Consolidated sales in fiscal 2024 decreased $302.4 million, or 13%, compared with the prior year.

Sales in fiscal 2023 were fueled by the delivery of a significant backlog resulting from heightened demand in prior periods.

Absent this backlog, sales were relatively flat in fiscal 2024 compared with fiscal 2023, as incremental sales from our Retail acquisitions and the addition of new major wholesale dealers were essentially offset by selective pricing taken on products and delivery services, along with promotional actions, to maintain competitiveness.

Consolidated sales in fiscal 2025 increased $62.2 million, or 3%, compared with the prior year, primarily driven by incremental sales resulting from our Retail acquisitions and new store expansion, higher delivered wholesale volume in our core North America La-Z-Boy branded upholstery business, including growth from our major wholesale dealers, and higher delivered volume in our Joybird business.

Operating Margin

1 unchanged sentence

• Gross margin increased 80 basis points during fiscal 2025 compared with fiscal 2024.

◦ Lower input costs, led by reduced commodity prices and improved sourcing, drove an increase in gross margin in fiscal 2024 compared with the prior year.

◦ Gross margin further benefited from a favorable shift in product mix within our Retail segment toward higher margin products.

◦ Partially offsetting the benefits above, plant inefficiencies resulting from lower production volume and transition costs related to our supply chain optimization initiative in Mexico drove a decline in gross margin during fiscal 2024 compared with the prior year

◦ Gross margin further decreased from selective pricing and promotional actions taken in fiscal 2024 to maintain competitiveness.

• While selling, general, and administrative ("SG&A") expenses were down $22.4 million in fiscal 2024 compared with the prior year, SG&A expenses as a percentage of sales increased 360 basis points over the same period, primarily due to lower delivered sales relative to fixed costs.

◦ Changes in our consolidated mix led to a 40 basis point increase in gross margin in fiscal 2025 compared with fiscal 2024 driven by growth of our Retail segment, which has higher gross margin than our Wholesale segment.

◦ Lower input costs, led by reduced commodity prices and improved sourcing, drove an increase in gross margin during fiscal 2025 compared with the prior year.

◦ Partially offsetting the items above, higher tariff expense in fiscal 2025, which accelerated in the fourth quarter due to changes in tariff policies, combined with favorable tariff expense in fiscal 2024 resulted in a comparative decrease in gross margin in fiscal 2025.

• Selling, general, and administrative ("SG&A") expenses increased 80 basis points during fiscal 2025 compared with fiscal 2024.

◦ Changes in our consolidated mix led to a 40 basis point increase in SG&A expense as a percentage of sales in fiscal 2025 compared with fiscal 2024 driven by growth of our Retail segment, which has a higher SG&A expense as a percentage of sales than our Wholesale segment.

◦ SG&A expense as a percentage of sales increased in fiscal 2025 compared with fiscal 2024 due to fixed cost deleverage on lower sales in our international wholesale business due to a significant customer transition.

◦ SG&A expense as a percentage of sales in fiscal 2025 also increased due to higher selling expenses and fixed costs resulting from acquisitions of independently owned La-Z-Boy Furniture Galleries ® and retail store expansion, both to support our long-term strategy of growing our Retail segment.

• Operating margin decreased 100 basis points due to a $20.6 million non-cash impairment charge to reduce the carrying value of goodwill associated with our wholesale and manufacturing businesses in the United Kingdom.

Refer to Note 6, Goodwill and Other Intangible Assets, for further information regarding our fiscal 2025 impairment testing.

We explain these items further when we discuss each segment's results later in this Management's Discussion and Analysis.

5 unchanged sentences

Operating margin 11.7% 13.1%

The Retail segment's sales decreased $126.9 million, or 13%, in fiscal 2024 compared with fiscal 2023, primarily due to the adverse comparison to historic sales levels in fiscal 2023, which were fueled by the delivery of previously built backlog.

This decrease in sales was partially offset by a $25.2 million increase in sales related to our fiscal 2024 retail store acquisitions and the full-year impact of our fiscal 2023 retail store acquisitions.

Written same-store sales decreased 3% in fiscal 2024 compared with fiscal 2023, primarily due to softer industry-wide demand as a result of a challenging macroeconomic environment.

The Retail segment's sales increased $43.2 million, or 5%, in fiscal 2025 compared with fiscal 2024, primarily due to $42.4 million of incremental sales resulting from our fiscal 2025 retail store acquisitions and the full-year impact of our fiscal 2024 retail store acquisitions, along with $15.3 million of sales from our retail store expansion, net of closed stores.

These increases were partially offset by a decline in delivered same-store sales.

Written same-store sales decreased 1% in fiscal 2025 compared with fiscal 2024, primarily due to lower consumer demand as a result of a challenging macroeconomic environment.

Same-store sales include the sales of all currently active stores which have been open and company-owned for each comparable period.

1 unchanged sentence

The Retail segment's operating margin decreased 140 basis points in fiscal 2025 compared with fiscal 2024.

• Gross margin increased 120 basis points during fiscal 2024 compared with the prior year, primarily due to favorable shift in product mix towards higher margin products.

• While SG&A expenses decreased during fiscal 2024 compared with the prior year, SG&A expenses as a percentage of sales increased 460 basis points over the same period, primarily due to lower delivered sales relative to selling expenses and fixed costs, mainly occupancy expenses.

• Gross margin increased 10 basis points during fiscal 2025 compared with the prior year, primarily due to a slight shift in product mix towards higher margin products.

• SG&A expenses as a percentage of sales increased 150 basis points during fiscal 2025 compared with the prior year, primarily due to increased selling expenses and fixed costs resulting from our acquisitions of independently owned La-Z-Boy Furniture Galleries ® and retail store expansion, both to support our long-term strategy of growing our Retail segment.

Wholesale Segment

6 unchanged sentences

Operating margin 5.6% 6.9%

The Wholesale segment's sales decreased 14%, or $243.0 million, in fiscal 2024 compared with fiscal 2023.

The decrease in sales primarily reflects a decline in delivered unit volume reflecting the absence of the significant backlog built from prior periods that delivered throughout fiscal 2023, combined with lower furniture demand across the entire industry due to a challenging macroeconomic environment.

To a lesser extent, sales also decreased in fiscal 2024 compared with fiscal 2023 as a result of selective pricing on products and delivery services, along with promotional actions, taken to maintain competitiveness.

The Wholesale segment's sales increased 2%, or $32.5 million, in fiscal 2025 compared with fiscal 2024, primarily due to increased volume in our core North America La-Z-Boy branded upholstery business, mainly driven by sales to our Retail segment along with growth from our major wholesale dealers, combined with a favorable shift in product mix toward higher price products.

The increase in sales was partially offset by a significant customer transition in our international wholesale business.

Operating Margin

The Wholesale segment's operating margin increased 10 basis points in fiscal 2024 compared with fiscal 2023.

The Wholesale segment's operating margin decreased 130 basis points in fiscal 2025 compared with fiscal 2024.

• Gross margin increased 30 basis points during fiscal 2025 compared with fiscal 2024.

◦ Lower input costs, led by reduced commodity prices and improved sourcing, drove a 90 basis point increase in gross margin during fiscal 2025 compared with the prior year.

◦ Partially offsetting the item above, plant inefficiencies resulting from lower production volume and transition costs related to our supply chain optimization initiative in Mexico led to a 90 basis point decrease in gross margin during fiscal 2024 compared with the prior year.

◦ Gross margin further decreased 90 basis points in fiscal 2024 compared with the prior year, from selective pricing and promotional actions taken to maintain competitiveness.

◦ The comparative impact of the Supply Chain Optimization charges noted above in Mexico and the United Kingdom resulted in a net 20 basis point increase in gross margin in fiscal 2025 compared with fiscal 2024.

◦ Gross margin decreased 50 basis points in fiscal 2025 due to an unfavorable shift in product mix towards products that have a lower gross margin.

◦ Higher tariff expense in fiscal 2025, which accelerated in the fourth quarter due to changes in tariff policies, combined with favorable tariff expense in fiscal 2024 resulted in a comparative 40 basis point decrease in gross in margin in fiscal 2025.

• SG&A expense as a percentage of sales increased 10 basis points during fiscal 2025 compared with fiscal 2024.

◦ While SG&A expenses decreased in fiscal 2024 compared with the prior year, SG&A expenses as a percentage of sales increased, primarily due to reduced fixed cost leverage from lower delivered sales.

◦ Additionally, higher marketing expense in support of our Long Live the Lazy campaign launch drove a 60 basis point increase in SG&A expense as a percentage of sales in fiscal 2024 compared with the prior year.

Investments in this campaign support all La-Z-Boy branded products, including those sold through our Retail segment.

◦ SG&A expense as a percentage of sales increased 40 basis points in fiscal 2025 compared with fiscal 2024 from fixed cost deleverage on lower sales in our international wholesale business due to a significant customer transition.

◦ Marketing expense in fiscal 2025 decreased relative to the prior year, as during fiscal 2024 we launched our Long Live the Lazy campaign, resulting in a 30 basis point comparative decrease in SG&A expense as a percentage of sales.

• Operating margin decreased 150 basis points due to a $20.6 million non-cash impairment charge to reduce the carrying value of goodwill associated with our wholesale and manufacturing businesses in the United Kingdom.

Refer to Note 6, Goodwill and Other Intangible Assets, for further information regarding our fiscal 2025 impairment testing.

Corporate and Other

4 unchanged sentences

Operating loss (51,793) (60,259) (14.0) %

Corporate and Other sales decreased $12.4 million in fiscal 2024 compared with fiscal 2023, primarily due to a $7.8 million, or 5% decrease from Joybird, which contributed $138.6 million in sales in fiscal 2024.

Joybird's overall delivered volume declined in fiscal 2024, largely due to softer demand in the furniture and home furnishings industry experienced over the last year.

Written sales for Joybird were down 8% in fiscal 2024 compared with fiscal 2023, reflecting the industry-wide demand challenges noted above.

Intercompany eliminations decreased in fiscal 2024 compared with fiscal 2023 due to lower sales from our Wholesale segment to our Retail segment, driven by lower sales in the Retail segment.

Corporate and Other sales increased $6.7 million in fiscal 2025 compared with fiscal 2024, primarily due to a $7.5 million, or 5%, increase from Joybird, which contributed $146.1 million in sales in fiscal 2025.

The increase in Joybird sales was driven by higher delivered volume partially offset by increased promotional activity relative to the prior year.

Written sales for Joybird were flat in fiscal 2025 compared with fiscal 2024.

Intercompany eliminations increased in fiscal 2025 compared with fiscal 2024 due to higher sales from our Wholesale segment to our Retail segment, driven by higher sales in the Retail segment.

Operating Loss

Our Corporate and Other operating loss decreased $5.1 million in fiscal 2024 compared with fiscal 2023, primarily from improved Joybird operating performance.

This was partially offset by unfavorable intercompany inventory profit elimination adjustments, lower operating profit from our global trading company in Hong Kong and a comparative decrease in fiscal 2024 related to an $0.8 million gain recognized in fiscal 2023 to reduce the fair value of the Joybird contingent consideration liability based on our projections at that time.

Our Corporate and Other operating loss decreased $8.5 million in fiscal 2025 compared with fiscal 2024, primarily from improved Joybird operating performance, resulting in breakeven profit, and favorable intercompany profit elimination adjustments relative to the same period a year ago.

This was partially offset by lower intercompany operating profit from our global trading company in Hong Kong.

Non-Operating Income (Expense)

Interest Income

Interest income was $8.8 million higher in fiscal 2024 compared with fiscal 2023.

The increase in interest income was primarily driven by higher interest rates on higher cash balances.

Interest income was $0.6 million lower in fiscal 2025 compared with fiscal 2024.

The decrease in interest income was primarily driven by lower interest rates.

Other Income (Expense), Net

Other income (expense), net was $3.0 million of expense in fiscal 2025 compared with $0.1 million of expense in fiscal 2024.

The expense in fiscal 2023 was primarily due to a $10.3 million impairment of our investments in a privately held start-up company combined with exchange rate losses.

The expense in fiscal 2025 was primarily due to exchange rate losses related to our operations in Mexico and Thailand.

Our effective income tax rate was 31.4% for fiscal 2025 and 24.8% for fiscal 2024.

The increase in the effective tax rate in fiscal 2025 compared with the prior year was primarily the result of the one-time tax effect of a non-deductible goodwill impairment charge related to the United Kingdom reporting unit along with unfavorable changes in the valuation allowance.

Refer to Note 17, Income Taxes, for additional information.

2 unchanged sentences

We believe these sources remain adequate to meet our short-term and long-term liquidity requirements, finance our long-term growth plans, and fulfill other cash requirements for day-to-day operations and capital expenditures, including fiscal 2026 contractual obligations.

We had cash, cash equivalents and restricted cash of $341.1 million at April 27, 2024, compared with $346.7 million at April 29, 2023.

Included in our cash, cash equivalents and restricted cash at April 27, 2024, is $80.7 million held by foreign subsidiaries, the majority of which we have determined to be permanently reinvested.

We had cash and cash equivalents of $328.4 million at April 26, 2025, compared with $341.1 million at April 27, 2024.

Included in our cash and cash equivalents at April 26, 2025, was $58.2 million held by foreign subsidiaries, the majority of which we have determined to be permanently reinvested.

In addition, we had investments to enhance our returns on cash of $2.6 million at April 26, 2025, compared with $6.8 million at April 27, 2024.

8 unchanged sentences

Exchange rate changes 1,081 (926)

Change in cash, cash equivalents and restricted cash $ (5,580) $ 97,822

Change in cash and cash equivalents $ (12,649) $ (5,580)

Operating Activities

During fiscal 2024, net cash provided by operating activities was $158.1 million, a decrease of $47.0 million compared with the prior year mainly due to lower net income and less favorable changes in working capital relative to the prior year, partially

offset by smaller reduction in customer deposits, reflecting a reduced backlog.

Our cash provided by operating activities in fiscal 2024 was primarily attributable to net income, adjusted for non-cash items and a $19.9 million decrease in inventory.

This was partially offset by a $22.7 million decrease in customer deposits, reflecting the reduced backlog, and a $16.8 million increase in receivables, reflecting higher sales from our Wholesale business to external dealers during the fourth quarter of fiscal 2024 compared with same period a year ago.

During fiscal 2025, net cash provided by operating activities was $187.3 million, an increase of $29.1 million compared with the same period a year ago.

The year over year increase was primarily due to lower receivables, a lower incentive compensation payout in fiscal 2025 relative to the prior year, and a smaller reduction of customer deposits.

Our cash provided by operating activities in fiscal 2025 was primarily attributable to net income, adjusted for non-cash items.

Investing Activities

During fiscal 2024, net cash used for investing activities was $81.6 million, an increase of $11.4 million c ompared with the prior year primarily due to an increase in La-Z-Boy Furniture Galleries ® acquisitions and lower proceeds from the sale of investments, net of investment purchases, all partially offset by lower capital expenditures.

During fiscal 2025, net cash used for investing activities was $98.4 million, an increase of $16.8 million c ompared with the prior year primarily due to an increase in capital expenditures partially offset by lower cash payments for La-Z-Boy Furniture Galleries ® acquisitions.

Cash used for investing activities in fiscal 2025 included the following:

• Cash used for capital expenditures in the period was $53.6 million compared with $68.8 million during fiscal 2023, which is primarily related to upgrades at our manufacturing and distribution facilities, La-Z-Boy Furniture Galleries ® (new stores and remodels) and Joybird store projects.

We expect capital expenditures to be in the range of $70 to $80 million for fiscal 2025, primarily related to improvements and expansion of our Retail stores, replacement of machinery and equipment for various manufacturing and distribution facilities, and technology upgrades.

• Cash used for capital expenditures in the period was $74.3 million compared with $53.6 million during fiscal 2024, which was primarily related to La-Z-Boy Furniture Galleries ® (new stores and remodels), manufacturing-related investments, and market showroom upgrades.

We expect capital expenditures to be in the range of $90 to $100 million for fiscal 2026, primarily related to investments in our La-Z-Boy Furniture Galleries ® (new stores and remodels), distribution network redesign, and manufacturing operations.

We have no material contractual commitments outstanding for future capital expenditures.

• Cash used for acquisitions was $39.4 million, related to the acquisition of the Bradenton and Sarasota, Florida, Illinois and Indiana, Colorado Springs, Colorado and Lafayette, Louisiana retail businesses.

• Cash used for acquisitions was $29.5 million, related to the acquisition of the Davenport, Iowa, Melbourne and Cocoa, Florida, Toledo, Ohio, and Lansing and Portage, Michigan retail businesses.

• Proceeds from the sale of investments, net of investment purchases, was $5.0 million.

8 unchanged sentences

We believe our cash and cash equivalents, short-term investments, and cash from operations, in addition to our available Credit Facility, will provide adequate liquidity for our business operations over the next 12 months.

During fiscal 2024, net cash used for financing activities was $81.2 million, an increase of $44.1 million compared with the prior year, primarily due to higher share repurchases, partially offset by proceeds from exercised stock options.

During fiscal 2025, net cash used for financing activities was $102.6 million, an increase of $21.4 million compared with the prior year, primarily due to higher share repurchases and dividends, partially offset by cash paid in fiscal 2024 for holdback payments made on prior-period acquisitions.

Cash used for financing activities in fiscal 2025 included the following:

• Our board of directors has authorized the repurchase of Company stock and we spent $77.9 million during fiscal 2025 to repurchase 2.0 million shares.

As of April 27, 2024, 5.7 million shares remained available for repurchase pursuant to this authorization.

As of April 26, 2025, 3.7 million shares remained available for repurchase pursuant to this auth

With the operating cash flows we anticipate generating in fiscal 2026, we expect to continue repurchasing Company stock.

3 unchanged sentences

• Proceeds from exercised stock options, net of stock issued and taxes withheld as part of our employee benefit plans, was $12.4 million.

• Cash paid for holdback payments made on prior-period acquisitions was $5.0 million for a guaranteed payment related to the acquisition of Joybird, which was the final payment related to this acquisition.

Exchange Rate Changes

Due to changes in exchange rates, our cash, cash equivalents, and restricted cash decreased by $0.9 million from the end of fiscal year 2023 to the end of fiscal year 2024.

Due to changes in exchange rates, our cash and cash equivalents increased by $1.1 million from the end of fiscal year 2024 to the end of fiscal year 2025.

These changes impacted our cash balances held in Canada, Thailand, and the United Kingdom.

5 unchanged sentences

Purchase Obligations.

We had purchase obligations of $181.7 million, all payable within 12 months, related to open purchase orders, primarily with foreign and domestic casegoods, leather, and fabric suppliers, which are generally cancellable if production has not begun.

Open purchase orders also include contracts for indirect services, which are generally cancellable before services commence.

We had open purchase orders of $197.7 million, the majority of which are payable within 12 months, primarily related to contracts for indirect services, which are generally cancellable before services commence, along with orders from suppliers of raw materials and finished goods, which are generally cancellable if production has not begun.

Our consolidated balance sheet as April 26, 2025 reflected a $1.1 million net liability for uncertain income tax positions.

27 unchanged sentences

The income approach requires the use of significant estimates and assumptions including forecasted sales growth, operating income projections, and discount rates and changes in these assumptions may materially impact our fair value assessment.

During fiscal 2024, we performed the quantitative impairment test on two reporting units and determined that neither was impaired as discussed below.

During fiscal 2025, we performed the quantitative impairment test on two reporting units as discussed below.

Joybird Reporting Unit

The Joybird reporting unit, which has goodwill of $55.4 million at April 27, 2024, has an estimated fair value that exceeds is carrying value by approximately 6%.

The Joybird reporting unit, which has goodwill of $55.4 million at April 26, 2025, has an estimated fair value that exceeds its carrying value by approximately 16%.

We determined the fair value of this reporting unit by applying a combination of the income approach based on its future cash flows and the market approach based on the guideline public company method, weighted 75% and 25%, respectively.

The key assumptions that factored into the valuation under the income approach were the projections of revenue and operating income of the business, as well as the terminal growth rate, tax rate, and discount rate used to present value these future cash flows.

We performed a sensitivity analysis on the discount rate and terminal growth rate and using a range of reasonable inputs, the fair value of the Joybird reporting unit either exceeded its carrying value or did not exceed its carrying value by an immaterial amount, for each of the various scenarios analyzed.

We performed a sensitivity analysis on the discount rate and terminal growth rate and using a range of reasonable inputs, the fair value of the Joybird reporting unit exceeded its carrying value for each of the various scenarios analyzed.

The key assumption that factored into the valuation under the market approach was the market multiples applied to revenue.

United Kingdom Reporting Unit

The United Kingdom reporting unit, which has goodwill of $20.1 million at April 27, 2024, has an estimated fair value that exceeds is carrying value by approximately 28%.

The United Kingdom reporting unit, which had goodwill of $20.1 million at April 27, 2024, and $20.6 million at the time of the impairment test, was deemed to be impaired and was reduced to zero during the fourth quarter of fiscal 2025 as the carrying value of the reporting unit exceeded its fair value by an amount greater than the goodwill existing at the time of the impairment test.

We determined the fair value of this reporting unit using the income approach based on its future cash flows.

11 unchanged sentences

Determining the probability of award vesting requires judgment, including assumptions about future operating performance.

While the assumptions we use to calculate and account for stock-based compensation awards represent management's best estimates, these estimates involve inherent uncertainties and the application of our management's best

As a result, if we revise our assumptions and estimates, our stock-based compensation expense could be materially different in the future.

15 unchanged sentences

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-K

Item 7. Management’s Discussion and Analysis