LA-Z-BOY INC 10-Q

ITEM 1. FINANCIAL STATEMENTS LA-Z-BOY INCORPORATED CONSOLIDATED STATEMENT OF INCOME Quarter Ended (Unaudited, amounts in thousands, except per share data) 7/26/2025 7/27/2024 Sales $ 492,229 $ 495,532 Cost of sales 283,032 282,189 Gross profit 209,197 213,343 Selling, general and administrative expense 187,210 180,973 Operating income 21,987 32,370 Interest expense ( 120 ) ( 210 ) Interest income 3,108 4,424 Other income (expense), net ( 585 ) ( 618 ) Income before income taxes 24,390 35,966 Income tax expense 6,093 9,162 Net income 18,297 26,804 Net income attributable to noncontrolling interests ( 93 ) ( 645 ) Net income attributable to La-Z-Boy Incorporated $ 18,204 $ 26,159 Basic weighted average common shares 41,027 42,052 Basic net income attributable to La-Z-Boy Incorporated per share $ 0.44 $ 0.62 Diluted weighted average common shares 41,425 42,564 Diluted net income attributable to La-Z-Boy Incorporated per share $ 0.44 $ 0.61 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 3 Table of Contents LA-Z-BOY INCORPORATED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Quarter Ended (Unaudited, amounts in thousands) 7/26/2025 7/27/2024 Net income $ 18,297 $ 26,804 Other comprehensive income Currency translation adjustment 1,156 1,533 Net unrealized gain on marketable securities, net of tax 13 113 Net pension amortization, net of tax 19 15 Total other comprehensive income 1,188 1,661 Total comprehensive income before noncontrolling interests 19,485 28,465 Comprehensive (income) attributable to noncontrolling interests ( 502 ) ( 971 ) Comprehensive income attributable to La-Z-Boy Incorporated $ 18,983 $ 27,494 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 4 Table of Contents LA-Z-BOY INCORPORATED CONSOLIDATED BALANCE SHEET (Unaudited, amounts in thousands, except par value) 7/26/2025 4/26/2025 Current assets Cash and equivalents $ 318,544 $ 328,449 Receivables, net of allowance of $ 5,047 at 7/26/2025 and $ 5,042 at 4/26/2025 131,001 139,533 Inventories, net 252,120 255,285 Other current assets 91,572 82,421 Total current assets 793,237 805,688 Property, plant and equipment, net 345,262 339,212 Goodwill 205,629 205,590 Other intangible assets, net 50,991 51,161 Deferred income taxes – long-term 6,738 7,349 Right of use lease assets 461,394 452,848 Other long-term assets, net 62,702 60,314 Total assets $ 1,925,953 $ 1,922,162 Current liabilities Accounts payable $ 99,725 $ 95,984 Lease liabilities, short-term 81,470 80,592 Accrued expenses and other current liabilities 235,095 244,215 Total current liabilities 416,290 420,791 Lease liabilities, long-term 420,235 410,265 Other long-term liabilities 61,406 59,130 Shareholders' equity Preferred shares – 5,000 authorized; none issued — — Common shares, $ 1.00 par value – 150,000 authorized; 41,207 outstanding at 7/26/2025 and 41,164 outstanding at 4/26/2025 41,207 41,164 Capital in excess of par value 388,546 385,601 Retained earnings 589,209 597,432 Accumulated other comprehensive loss ( 2,795 ) ( 3,574 ) Total La-Z-Boy Incorporated shareholders' equity 1,016,167 1,020,623 Noncontrolling interests 11,855 11,353 Total equity 1,028,022 1,031,976 Total liabilities and equity $ 1,925,953 $ 1,922,162 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 5 Table of Contents LA-Z-BOY INCORPORATED CONSOLIDATED STATEMENT OF CASH FLOWS Quarter Ended (Unaudited, amounts in thousands) 7/26/2025 7/27/2024 Cash flows from operating activities Net income $ 18,297 $ 26,804 Adjustments to reconcile net income to cash provided by operating activities (Gain)/loss on disposal and impairment of assets ( 92 ) ( 117 ) (Gain)/loss on sale of investments ( 94 ) ( 80 ) Provision for doubtful accounts 129 91 Depreciation and amortization 11,329 12,147 Amortization of right-of-use lease assets 20,234 22,722 Equity-based compensation expense 3,420 3,175 Change in deferred taxes 1,075 1,999 Change in receivables 8,498 17,783 Change in inventories 3,637 ( 6,912 ) Change in other assets ( 4,805 ) ( 6,668 ) Change in payables 4,653 952 Change in lease liabilities ( 20,230 ) ( 23,306 ) Change in other liabilities ( 9,759 ) 3,728 Net cash provided by operating activities 36,292 52,318 Cash flows from investing activities Proceeds from disposals of assets 170 158 Capital expenditures ( 18,461 ) ( 15,620 ) Purchases of investments ( 117 ) ( 2,813 ) Proceeds from sales of investments 216 7,879 Acquisitions ( 627 ) ( 6,797 ) Net cash used for investing activities ( 18,819 ) ( 17,193 ) Cash flows from financing activities Payments on finance lease liabilities ( 225 ) ( 145 ) Payments for debt issuance costs ( 784 ) — Stock issued for stock and employee benefit plans, net of shares withheld for taxes ( 5,190 ) 7,874 Repurchases of common stock ( 12,505 ) ( 33,673 ) Dividends paid to shareholders ( 9,012 ) ( 8,371 ) Net cash used for financing activities ( 27,716 ) ( 34,315 ) Effect of exchange rate changes on cash and equivalents 338 362 Change in cash and cash equivalents ( 9,905 ) 1,172 Cash and cash equivalents at beginning of period 328,449 341,098 Cash and cash equivalents at end of period $ 318,544 $ 342,270 Supplemental disclosure of non-cash investing activities Capital expenditures included in payables $ 6,233 $ 2,583 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 6 Table of Contents LA-Z-BOY INCORPORATED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited, amounts in thousands, except per share data) Common Shares Capital in Excess of Par Value Retained Earnings Accumulated Other Comprehensive Income (Loss) Non-Controlling Interests Total At April 26, 2025 $ 41,164 $ 385,601 $ 597,432 $ ( 3,574 ) $ 11,353 $ 1,031,976 Net income — — 18,204 — 93 18,297 Other comprehensive income — — — 779 409 1,188 Stock issued for stock and employee benefit plans, net of cancellations and withholding tax 343 173 ( 5,706 ) — — ( 5,190 ) Repurchases of 300 shares of common stock ( 300 ) ( 648 ) ( 11,560 ) — — ( 12,508 ) Stock option and restricted stock expense — 3,420 — — — 3,420 Dividends declared and paid ($ 0.22 /share) — — ( 9,012 ) — — ( 9,012 ) Dividends declared not paid ($ 0.22 /share) — — ( 149 ) — — ( 149 ) At July 26, 2025 $ 41,207 $ 388,546 $ 589,209 $ ( 2,795 ) $ 11,855 $ 1,028,022 (Unaudited, amounts in thousands, except per share data) Common Shares Capital in Excess of Par Value Retained Earnings Accumulated Other Comprehensive Income (Loss) Non-Controlling Interests Total At April 27, 2024 $ 42,440 $ 368,485 $ 598,009 $ ( 5,870 ) $ 10,296 $ 1,013,360 Net income — — 26,159 — 645 26,804 Other comprehensive income — — — 1,335 326 1,661 Stock issued for stock and employee benefit plans, net of cancellations and withholding tax 508 10,086 ( 2,720 ) — — 7,874 Repurchases of 933 shares of common stock ( 933 ) ( 10,325 ) ( 22,658 ) — — ( 33,916 ) Stock option and restricted stock expense — 3,175 — — — 3,175 Dividends declared and paid ($ 0.20 /share) — — ( 8,371 ) — — ( 8,371 ) Dividends declared not paid ($ 0.20 /share) — — ( 111 ) — — ( 111 ) At July 27, 2024 $ 42,015 $ 371,421 $ 590,308 $ ( 4,535 ) $ 11,267 $ 1,010,476 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 7 Table of Contents LA-Z-BOY INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note 1: Basis of Presentation The accompanying consolidated financial statements include the consolidated accounts of La-Z-Boy Incorporated and our majority-owned subsidiaries (collectively, the "Company"). We derived the April 26, 2025 balance sheet from our audited financial statements. We prepared the interim financial information in conformity with generally accepted accounting principles ("US GAAP"), which we applied on a basis consistent with those reflected in our fiscal 2025 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”), but the information does not include all of the disclosures required by US GAAP. In management’s opinion, the interim financial information includes all adjustments and accruals, consisting only of normal recurring adjustments (except as otherwise disclosed), that are necessary for a fair statement of results for the respective interim periods. 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 25, 2026. Accounting Pronouncements Adopted in Fiscal 2026 The following table summarizes Accounting Standards Updates ("ASUs"), which were adopted in fiscal 2026, but did 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 (Topic 740): Improvements to Income Tax Disclosures Fiscal 2026 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 2025-05 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets Fiscal 2027 ASU 2025-03 Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity Fiscal 2028 ASU 2024-04 Debt - Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments Fiscal 2027 ASU 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses Fiscal 2028 Note 2: Acquisitions We did not complete any acquisitions during the first quarter of fiscal 2026. Prior Year Acquisitions The Retail acquisition completed in the first quarter of fiscal 2025 reflects a core component of our strategic priorities, which is to grow our company-owned retail business and leverage our integrated retail model (where we earn a combined profit on both the wholesale and retail sales) in suitable geographic markets, alongside the existing La-Z-Boy Furniture Galleries ® network. Prior to the Retail acquisition, we licensed to the counterparty the exclusive right to own and operate the La-Z-Boy Furniture Galleries ® store (and to use the associated trademarks and trade name) in its market, and we reacquired these rights when we consummated the transaction. These required rights are indefinite-lived because our retailer agreements are perpetual agreements that have no specific expiration date and no renewal options. The effective settlement date of this arrangement resulted in no settlement gain or loss as the contractual terms were at market. For federal income tax purposes, we amortize and deduct the indefinite-lived intangible assets and goodwill over 15 years. The acquisition below was not significant to our consolidated financial statements, and, therefore, pro-forma financial information is not presented. 8 Table of Contents 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 customary adjustments. We paid total cash of $ 6.9 million during the first and second quarters 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. Note 3: Inventories A summary of inventories is as follows: (Unaudited, amounts in thousands) 7/26/2025 4/26/2025 Raw materials $ 128,271 $ 128,823 Work in process 18,568 19,280 Finished goods 151,895 153,796 FIFO inventories 298,734 301,899 Excess of FIFO over LIFO ( 46,614 ) ( 46,614 ) Total inventories $ 252,120 $ 255,285 Note 4: Goodwill and Other Intangible Assets We have goodwill on our consolidated balance sheet as follows: Reportable Segment/Unit Reporting Unit Related Acquisition Wholesale Segment United Kingdom (1) Wholesale business in the United Kingdom and Ireland Wholesale Segment United Kingdom (1) La-Z-Boy United Kingdom Manufacturing (Furnico) Retail Segment Retail La-Z-Boy Furniture Galleries ® stores Corporate and Other Joybird Joybird (1) The United Kingdom reporting unit is fully impaired and has no carrying value as of July 26, 2025. The following table summarizes changes in the carrying amount of our goodwill by reportable segment: (Unaudited, amounts in thousands) Wholesale Segment Retail Segment Corporate and Other Total Goodwill Balance at April 26, 2025 (1) $ — $ 150,144 $ 55,446 $ 205,590 Translation adjustment — 39 — 39 Balance at July 26, 2025 (1) $ — $ 150,183 $ 55,446 $ 205,629 (1) Includes $ 26.9 million and $ 20.6 million of accumulated impairment losses in Corporate and Other and the Wholesale segment, respectively. We have intangible assets on our consolidated balance sheet as follows: Reportable Segment Intangible Asset Useful Life Wholesale Segment American Drew ® trade name Indefinite-lived Retail Segment Reacquired rights to own and operate La-Z-Boy Furniture Galleries ® stores Indefinite-lived Corporate and Other Joybird ® trade name Amortizable over eight-year useful life 9 Table of Contents The following summarizes changes in our intangible assets: (Unaudited, amounts in thousands) Indefinite- Lived Trade Names Finite-Lived Trade Name Indefinite- Lived Reacquired Rights Total Intangible Assets Balance at April 26, 2025 $ 1,155 $ 998 $ 49,008 $ 51,161 Amortization — ( 200 ) — ( 200 ) Translation adjustment — — 30 30 Balance at July 26, 2025 $ 1,155 $ 798 $ 49,038 $ 50,991 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. We test amortizable intangible assets for impairment if events or changes in circumstances indicate that the assets might be impaired. Note 5: Investments We have current and long-term investments intended to enhance returns on our cash as well as to fund future obligations of certain retirement plans. 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. The following summarizes our investments: (Unaudited, amounts in thousands) 7/26/2025 4/26/2025 Short-term investments: Marketable securities $ 46 $ 10 Held-to-maturity investments 2,680 2,607 Total short-term investments 2,726 2,617 Long-term investments: Marketable securities 12,630 12,284 Total investments $ 15,356 $ 14,901 Investments to enhance returns on cash $ 2,680 $ 2,607 Investments to fund compensation/retirement plans 12,676 12,294 Total investments $ 15,356 $ 14,901 The following is a summary of the unrealized gains, unrealized losses, and fair value by investment type: 7/26/2025 4/26/2025 (Unaudited, amounts in thousands) Gross Unrealized Gains Gross Unrealized Losses Fair Value Gross Unrealized Gains Gross Unrealized Losses Fair Value Equity securities $ 1,055 $ — $ 3,830 $ 618 $ — $ 3,489 Fixed income 135 ( 52 ) 6,380 114 ( 50 ) 6,335 Other 303 ( 2 ) 5,146 322 ( 15 ) 5,077 Total securities $ 1,493 $ ( 54 ) $ 15,356 $ 1,054 $ ( 65 ) $ 14,901 10 Table of Contents The following table summarizes sales of marketable securities: Quarter Ended (Unaudited, amounts in thousands) 7/26/2025 7/27/2024 Proceeds from sales $ 216 $ 7,879 Gross realized gains 94 115 Gross realized losses — ( 35 ) As of July 26, 2025, we held $ 6.4 million of fixed income marketable securities, classified as available-for-sale securities, all of which do not have a single contractual maturity date. Note 6: Debt On October 15, 2021, we entered into a credit agreement with Wells Fargo Bank, National Association, as administrative agent, the other agents and lenders named therein and the other parties thereto (as amended prior to July 1, 2025, the “Credit Agreement”). The Credit Agreement provides for an unsecured revolving credit facility in an aggregate principal amount of $ 200 million, which includes a $ 50 million letter of credit sub-limit (the “Credit Facility”). On July 1, 2025, we entered into an amendment to the Credit Agreement (the “Credit Agreement Amendment”). The Credit Agreement Amendment, among other things, (i) extended the maturity date of the Credit Facility from October 15, 2026 to July 1, 2030, (ii) increased the accordion basket for additional revolving commitments and/or incremental term loans from $ 100 million to $ 125 million, (iii) removed the secured overnight financing rate (“SOFR”) credit spread adjustment, and (iv) decreased the consolidated fixed charge coverage ratio required to be satisfied under the Company’s financial covenant. Borrowings under the Credit Facility may be used by the Company for general corporate purposes. The Credit Facility will mature on July 1, 2030, and provides us the ability to extend the maturity date for two additional one-year periods, subject to the satisfaction of customary conditions. The Credit Facility contains certain restrictive loan covenants, including, among others, financial covenants requiring a maximum consolidated net lease adjusted leverage ratio and a minimum consolidated fixed charge coverage ratio, as well as customary covenants limiting our ability to incur indebtedness, grant liens, make acquisitions, merge or consolidate, and dispose of certain assets. As of July 26, 2025, we have no borrowings outstanding under the Credit Facility and we were in compliance with our financial covenants under the Credit Facility. Note 7: Product Warranties 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 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 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 the 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 use considerable judgment in making our estimates, and we record differences between our actual and estimated costs when the differences are known. 11 Table of Contents A reconciliation of the changes in our product warranty liability is as follows: Quarter Ended (Unaudited, amounts in thousands) 7/26/2025 (1) 7/27/2024 Balance as of the beginning of the period $ 29,940 $ 28,909 Accruals during the period 6,576 8,900 Settlements during the period ( 7,406 ) ( 8,331 ) Balance as of the end of the period $ 29,110 $ 29,478 (1) $ 21.2 million and $ 22.4 million is recorded in accrued expenses and other current liabilities as of July 26, 2025, and April 26, 2025, respectively, while the remainder is included in other long-term liabilities. We recorded accruals during the periods presented in the table above, primarily to reflect charges that relate to warranties issued during the respective periods. Note 8: Stock-Based Compensation The table below summarizes the total stock-based compensation expense we recognized for all outstanding grants in our consolidated statement of income: Quarter Ended (Unaudited, amounts in thousands) 7/26/2025 7/27/2024 Equity-based awards expense $ 3,420 $ 3,175 Liability-based awards expense (1) ( 14 ) 161 Total stock-based compensation expense $ 3,406 $ 3,336 (1) Includes stock appreciation rights, deferred stock units issued to Directors, restricted stock units, and performance-based units. Compensation expense for these awards is based on the market price of our common stock on the grant date and is remeasured each reporting period based on the market value of our common shares on the last day of the reported period. Restricted Stock . During the first quarter of fiscal 2026, we granted 263,509 shares of restricted stock units to employees and we also have restricted stock awards outstanding from previous grants. We issue restricted stock at no cost to the employees and account for restricted stock awards as equity-based awards because when they vest, they will be settled in common shares. 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. 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. We have elected to recognize forfeitures as an adjustment to compensation expense in the same period as the forfeitures occur. The weighted average fair value of the restricted stock that was awarded in the first quarter of fiscal 2026 was $ 38.24 per share, the market value of our common shares on the date of grant. Performance Shares. During the first quarter of fiscal 2026, we granted 182,671 performance-based shares, and we also have performance-based share awards outstanding from previous grants. 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. 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. The fair value of each share of the awards we granted in fiscal 2026 that vest based on attaining performance goals was $ 35.62 , 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. For shares that vest based on market conditions, we use a Monte Carlo valuation model to estimate each share’s fair value as of the date of grant. The Monte Carlo valuation model uses multiple simulations to evaluate our probability of achieving various stock price levels to determine our 12 Table of Contents expected performance ranking relative to our peer group. For shares that vest based on market conditions, we expense compensation cost over the vesting period regardless of whether the market condition is ultimately satisfied. Based on the Monte Carlo valuation model, the fair value as of the grant date of the fiscal 2026 grant of shares that vest based on market conditions was $ 52.91 . Stock Options. We did not grant stock options to employees during the first quarter of fiscal 2026, 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. We recognize compensation expense for stock options 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. The vesting period for our stock options ranges from one to four years , with accelerated vesting upon retirement. The vesting date for retirement-eligible employees is the later of the date they meet the criteria for retirement or ten months after the grant date. We accelerate the expense for options 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. We have elected to recognize forfeitures as an adjustment to compensation expense in the same period as the forfeitures occur. Granted options outstanding under the former long-term equity award plan remain in effect and have a term of 10 years. We estimated the fair value of the employee stock options granted in prior years at their respective grant date using the Black-Scholes option-pricing model, which requires management to make certain assumptions. Note 9: Accumulated Other Comprehensive Loss Activity in accumulated other comprehensive income (loss) for the quarters ended July 26, 2025, and July 27, 2024, is as follows: (Unaudited, amounts in thousands) Translation adjustment Unrealized gain (loss) on marketable securities Net pension amortization and net actuarial gain (loss) Accumulated other comprehensive income (loss) Balance at April 26, 2025 $ ( 1,507 ) $ 337 $ ( 2,404 ) $ ( 3,574 ) Changes before reclassifications 747 19 — 766 Amounts reclassified to net income — ( 1 ) 25 24 Tax effect — ( 5 ) ( 6 ) ( 11 ) Other comprehensive income attributable to La-Z-Boy Incorporated 747 13 19 779 Balance at July 26, 2025 $ ( 760 ) $ 350 $ ( 2,385 ) $ ( 2,795 ) Balance at April 27, 2024 $ ( 3,804 ) $ 246 $ ( 2,312 ) $ ( 5,870 ) Changes before reclassifications 1,207 150 — 1,357 Amounts reclassified to net income — — 20 20 Tax effect — ( 37 ) ( 5 ) ( 42 ) Other comprehensive income attributable to La-Z-Boy Incorporated 1,207 113 15 1,335 Balance at July 27, 2024 $ ( 2,597 ) $ 359 $ ( 2,297 ) $ ( 4,535 ) 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. The components of noncontrolling interest were as follows: Quarter Ended (Unaudited, amounts in thousands) 7/26/2025 7/27/2024 Balance as of the beginning of the period $ 11,353 $ 10,296 Net income 93 645 Other comprehensive income 409 326 Balance as of the end of the period $ 11,855 $ 11,267 13 Table of Contents Note 10: Revenue Recognition Our revenue is primarily derived from product sales. We report product sales net of discounts and recognize them when control (rights and obligations associated with the product) passes to the customer. For sales to furniture retailers or distributors, control typically transfers when we ship the product. In cases where we sell directly to the end consumer, control of the product is generally transferred upon delivery. For shipping and handling activities, we have elected to apply the accounting policy election permitted in ASC 606-10-25-18B, which allows an entity to account for shipping and handling activities as fulfillment activities (rather than as a promised good or service) when the activities are performed even if those activities are performed after the control of the good has been transferred. We expense shipping and handling costs at the time we recognize revenue in accordance with this election. For sales tax, we have elected to apply the accounting policy election permitted in ASC 606-10-32-2A, which allows an entity to exclude from the measurement of the transaction price all taxes imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer, including sales, use, excise, value-added, and franchise taxes (collectively referred to as sales taxes). This allows us to present revenue net of these certain types of taxes. We have elected the practical expedient permitted in ASC 606-10-32-18, which allows an entity to recognize the promised amount of consideration without adjusting for the effects of a significant financing component if the contract has a duration of one year or less. As our contracts typically are less than one year in length and do not have significant financing components, we have not adjusted consideration. The following table presents our revenue disaggregated by product category and by segment or unit: Quarter Ended July 26, 2025 Quarter Ended July 27, 2024 (Unaudited, amounts in thousands) Wholesale Retail Corporate and Other Total Wholesale Retail Corporate and Other Total Upholstered Furniture $ 272,356 $ 170,867 $ 23,361 $ 466,584 $ 281,180 $ 166,875 $ 27,876 $ 475,931 Casegoods Furniture 17,774 10,954 1,379 30,107 16,088 11,375 3,119 30,582 Delivery 37,347 7,503 1,896 46,746 38,513 7,382 2,068 47,963 Other (1) 25,480 17,826 4,599 47,905 15,119 16,738 5,645 37,502 Total $ 352,957 $ 207,150 $ 31,235 $ 591,342 $ 350,900 $ 202,370 $ 38,708 $ 591,978 Eliminations ( 99,113 ) ( 96,446 ) Consolidated Net Sales $ 492,229 $ 495,532 (1) Primarily includes surcharges, revenue for advertising, royalties, parts, accessories, after-treatment products, 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 ® and branded space 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 revenue includes sales to La-Z-Boy Furniture Galleries ® stores (including company-owned stores), independent retailers, and the end consumer. Contract Assets and Liabilities. We receive customer deposits from end consumers before we recognize revenue and in some cases, we have the unconditional right to collect the remaining portion of the order price before we fulfill our performance obligation, resulting in a contract asset and a corresponding deferred revenue liability. In our consolidated balance sheet, customer deposits and deferred revenue (collectively, the "contract liabilities") are reported in accrued expenses and other current liabilities while contract assets are reported as other current assets. 14 Table of Contents The following table presents our contract assets and liabilities: (Unaudited, amounts in thousands) 7/26/2025 4/26/2025 Contract assets $ 35,327 $ 32,580 Customer deposits $ 82,677 $ 72,894 Deferred revenue 35,327 32,580 Total contract liabilities (1) $ 118,004 $ 105,474 (1) During the quarter ended July 26, 2025, we recognized revenue of $ 94.6 million related to our contract liability balance at April 26, 2025. Note 11: Segment Information We report segment information consistent with the way our chief operating decision maker, (the "CODM"), our Board Chair, President and Chief Executive Officer, evaluates the operating results and performance of the Company. Our reportable operating segments include the Wholesale segment and the Retail segment. Wholesale Segment . 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. 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. Retail Segment . Our Retail segment consists of one operating segment comprised of our 205 company-owned La-Z-Boy Furniture Galleries ® 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 . 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 omni-channel 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 online through its website, www.joybird.com, and through small-format stores in key markets. None of the operating segments included in Corporate and Other meet the requirements of reportable segments. We use operating income to evaluate segment performance and to allocate resources. Segment operating income is based on profit or loss from operations before interest expense, interest income, other income (expense), net and income taxes. The CODM assesses performance by regularly reviewing each segment's significant expense categories which include cost of sales, selling, general and administrative ("SG&A") expenses, and goodwill impairment, if applicable. The accounting policies of the operating segments are the same as those described in our Annual Report on form 10-K for the fiscal year ended April 26, 2025. We account for intersegment revenue transactions between our segments consistent with independent third-party transactions, that is, at current market prices. As a result, the manufacturing profit related to sales to our Retail segment is included within the Wholesale segment. Operating income realized on intersegment revenue transactions is therefore generally consistent with the operating income realized on our revenue from independent third-party transactions. Identifiable assets are cash and equivalents, accounts receivable, net inventories, net property, plant and equipment, right-of-use lease assets, goodwill and other intangible assets. Our unallocated assets include deferred income taxes, corporate assets (including a portion of cash and equivalents), and various other assets. Asset information is regularly reviewed by the CODM at the consolidated level and segment-level asset information is not used for purposes of making decisions, assessing financial performance, or allocating resources. 15 Table of Contents The following table presents sales and operating income (loss) by segment: Quarter Ended July 26, 2025 (Unaudited, amounts in thousands) Wholesale Retail Corporate & Other Intersegment Eliminations Consolidated Sales to external customers $ 255,345 $ 207,150 $ 29,734 $ — $ 492,229 Intersegment sales 97,612 — 1,501 ( 99,113 ) — Total sales 352,957 207,150 31,235 ( 99,113 ) 492,229 Cost of sales 264,042 93,463 12,534 ( 87,007 ) 283,032 Gross profit 88,915 113,687 18,701 ( 12,106 ) 209,197 SG&A expenses 63,740 100,567 35,009 ( 12,106 ) 187,210 Operating income (loss) $ 25,175 $ 13,120 $ ( 16,308 ) $ — $ 21,987 Interest expense ( 120 ) Interest income 3,108 Other income (expense), net ( 585 ) Income before income taxes $ 24,390 Quarter Ended July 27, 2024 (Unaudited, amounts in thousands) Wholesale Retail Corporate & Other Intersegment Eliminations Consolidated Sales to external customers $ 256,020 $ 202,370 $ 37,142 $ — $ 495,532 Intersegment sales 94,880 — 1,566 ( 96,446 ) — Total sales 350,900 202,370 38,708 ( 96,446 ) 495,532 Cost of sales 260,293 90,750 15,919 ( 84,773 ) 282,189 Gross profit 90,607 111,620 22,789 ( 11,673 ) 213,343 SG&A expenses 66,608 90,971 35,067 ( 11,673 ) 180,973 Operating income (loss) $ 23,999 $ 20,649 $ ( 12,278 ) $ — $ 32,370 Interest expense ( 210 ) Interest income 4,424 Other income (expense), net ( 618 ) Income before income taxes $ 35,966 16 Table of Contents Quarter Ended (Unaudited, amounts in thousands) 7/26/2025 7/27/2024 Depreciation and Amortization Wholesale segment $ 6,615 $ 6,257 Retail segment 3,193 2,630 Corporate and Other 1,521 3,260 Consolidated depreciation and amortization $ 11,329 $ 12,147 Capital Expenditures Wholesale segment $ 8,421 $ 8,022 Retail segment 8,116 6,468 Corporate and Other 1,924 1,130 Consolidated capital expenditures $ 18,461 $ 15,620 Sales by Country (1) United States 91 % 90 % Canada 5 % 6 % Other 4 % 4 % Total 100 % 100 % (1) Sales are attributed to countries on the basis of the customer's location. (Unaudited, amounts in thousands) 7/26/2025 4/26/2025 Assets Wholesale segment $ 664,749 $ 662,987 Retail segment 728,274 727,178 Unallocated assets 532,930 531,997 Consolidated assets $ 1,925,953 $ 1,922,162 Long-Lived Assets by Geographic Location Domestic $ 992,188 $ 976,220 International 71,088 72,591 Consolidated long-lived assets $ 1,063,276 $ 1,048,811 Note 12: Income Taxes Our effective tax rate was 25.0 % for the quarter ended July 26, 2025 compared with 25.5 % for the quarter ended July 27, 2024. Our effective tax rate varies from the 21 % federal statutory rate primarily due to state taxes. On July 4, 2025, the "One Big Beautiful Bill Act" ("OBBBA"), was signed into law, making several provisions of the Tax Cuts and Jobs Act permanent. Under ASC 740, Income Taxes, the effects of changes in tax laws must be recognized in the period of enactment. The Company is currently evaluating the potential impact of OBBBA, but based on a preliminary assessment, the provisions of the new law are not expected to have a material impact on the Company's consolidated financial statements. 17 Table of Contents Note 13: 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 (Unaudited, amounts in thousands, except per share data) 7/26/2025 7/27/2024 Numerator (basic and diluted): Net income available to common Shareholders $ 18,204 $ 26,159 Denominator: Basic weighted average common shares outstanding 41,027 42,052 Contingent common shares 246 351 Stock option dilution 152 161 Diluted weighted average common shares outstanding 41,425 42,564 Earnings per Share: Basic $ 0.44 $ 0.62 Diluted (1) $ 0.44 $ 0.61 (1) Diluted earnings per share was computed using the treasury stock method. The values for contingent common shares set forth above reflect the dilutive effect of common shares that we would have issued to employees under the terms of performance-based share awards if the relevant performance period for the award had been the reporting period. 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 quarter ended July 26, 2025, we did not exclude any outstanding options from the diluted share calculation. For the quarter ended July 27, 2024, we excluded options to purchase 0.2 million shares from the diluted share calculation. Note 14: Fair Value Measurements Accounting standards require that we put financial assets and liabilities into one of three categories based on the inputs we use to value them: • Level 1 — Financial assets and liabilities, the values of which are based on unadjusted quoted market prices for identical assets and liabilities in an active market that we have the ability to access. • Level 2 — Financial assets and liabilities, the values of which are based on quoted prices in markets that are not active or on model inputs that are observable for substantially the full term of the asset or liability. • Level 3 — Financial assets and liabilities, the values of which are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Accounting standards require that in making fair value measurements, we use observable market data when available. When inputs used to measure fair value fall within different levels of the hierarchy, we categorize the fair value measurement as being in the lowest level that is significant to the measurement. We recognize transfers between levels of the fair value hierarchy at the end of the reporting period in which they occur. In addition to assets and liabilities that we record at fair value on a recurring basis, we are required to record assets and liabilities at fair value on a non-recurring basis. 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 July 26, 2025 and April 26, 2025. There were no transfers into or out of Level 1, Level 2, or Level 3 for any of the periods presented. 18 Table of Contents At July 26, 2025 Fair Value Measurements (Unaudited, amounts in thousands) Level 1 Level 2 Level 3 NAV(1) Total Assets Marketable securities $ — $ 2,465 $ — $ 10,211 $ 12,676 Held-to-maturity investments 2,680 — — — 2,680 Total assets $ 2,680 $ 2,465 $ — $ 10,211 $ 15,356 At April 26, 2025 Fair Value Measurements (Unaudited, amounts in thousands) Level 1 Level 2 Level 3 NAV(1) Total Assets Marketable securities $ — $ 2,470 $ — $ 9,824 $ 12,294 Held-to-maturity investments 2,607 — — — 2,607 Total assets $ 2,607 $ 2,470 $ — $ 9,824 $ 14,901 (1) Certain marketable securities investments are measured at fair value using net asset value per share under the practical expedient methodology. At July 26, 2025 and April 26, 2025, we held marketable securities 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. 19 Table of Contents