What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-11-18 compared with 2025-08-19 · 87 added, 80 removed, 134 unchanged (55% of the section changed)

17 unchanged sentences

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 .

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

We manufacture, market, import, export, distribute and retail upholstery furniture products under the La-Z-Boy ® , England, Kincaid ® , and Joybird ® tradenames.

In addition, we import, distribute and retail accessories and casegoods (wood) furniture products under the Kincaid ® , American Drew ® , Hammary ® , and Joybird ® tradenames.

As of July 26, 2025, our supply chain operations included the following:

As of October 25, 2025, our supply chain operations included the following:

• Five major manufacturing locations and 12 distribution centers in the United States and three facilities in Mexico to support our speed-to-market and customization strategy

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to furniture retailers or distributors in the United States, Canada, and approximately 50 other countries, including the United Kingdom, China, Australia, South Korea and New Zealand, directly to consumers through retail stores that we own and operate, and through our websites, www.la-z-boy.com and www.joybird.com.

• The centerpiece of our retail distribution strategy is our network of 368 La-Z-Boy Furniture Galleries ® stores, over 500 La-Z-Boy Comfort Studio ® locations, and over 750 La-Z-Boy branded space locations, each dedicated to marketing our La-Z-Boy branded products.

• The centerpiece of our retail distribution strategy is our network of 370 La-Z-Boy Stores, over 500 La-Z-Boy Comfort Studio ® locations, and over 800 La-Z-Boy branded space locations, each dedicated to marketing our La-Z-Boy branded products.

We consider this dedicated space to be “proprietary.”

◦ La-Z-Boy Furniture Galleries ® stores help consumers furnish their homes by combining the style, comfort, and quality of La-Z-Boy furniture with our available design services.

We own 205 of the La-Z-Boy Furniture Galleries ® stores, while the remainder are independently owned and operated.

◦ La-Z-Boy Stores help consumers furnish their homes by combining the style, comfort, and quality of La-Z-Boy furniture with our available design services.

We own 207 of the La-Z-Boy Stores, while the remainder are independently owned and operated.

◦ La-Z-Boy Comfort Studio ® locations are defined spaces within larger independent retailers that are dedicated to displaying and selling La-Z-Boy branded products, while La-Z-Boy branded space locations display a curated selection of La-Z-Boy branded products within larger independent dealers.

All La-Z-Boy Comfort Studio ® locations and La-Z-Boy branded space locations are independently owned and operated.

◦ In total, we have approximately 7.7 million square feet of proprietary floor space dedicated to selling La-Z-Boy branded products in North America within our La-Z-Boy Furniture Galleries ® stores and La-Z-Boy Comfort Studio ® locations.

◦ In total, we have approximately 7.7 million square feet of proprietary floor space dedicated to selling La-Z-Boy branded products in North America within our La-Z-Boy Stores and La-Z-Boy Comfort Studio ® locations.

◦ We also have approximately 2.6 million square feet of floor space outside of North America dedicated to selling La-Z-Boy branded products.

• Our other brands, England, American Drew, Hammary, and Kincaid enjoy distribution through many of the same outlets, with over half of Hammary’s sales originating through the La-Z-Boy Furniture Galleries ® store network.

◦ Kincaid and England have their own dedicated proprietary in-store programs with 674 outlets and approximately 2.0 million square feet of proprietary floor space.

◦ During the second quarter of fiscal 2026, the Company committed to a plan to dispose a portion of our Casegoods wholesale business.

Refer to Note 4, Assets Held for Sale, to our consolidated financial statements for further information.

• Joybird sells product online and has 14 small-format stores in key markets.

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We are driving change throughout our digital platforms to improve the user experience, with a specific focus on the ease with which customers browse through our broad product assortment, customize products to their liking, find stores to make a purchase, or purchase at www.la-z-boy.com.

• Growing our La-Z-Boy Furniture Galleries ® store network .

• Growing our La-Z-Boy Store network .

We expect our strategic initiatives in this area to generate growth in our Retail segment through an increased company-owned store count and in our Wholesale segment as our proprietary distribution network expands.

We are not only focused on growing the number of locations, but also on upgrading existing store locations to our new concept designs.

We are prioritizing growth of our company-owned

Retail business by opportunistically acquiring existing La-Z-Boy Furniture Galleries ® stores and opening new La-Z-Boy Furniture Galleries ® stores where we see opportunity for growth, or where we believe we have opportunities for further market penetration.

We are prioritizing growth of our company-owned Retail business by opportunistically acquiring existing La-Z-Boy Stores and opening new La-Z-Boy Stores where we see opportunity for growth, or where we believe we have opportunities for further market penetration.

• 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, 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.

Consumers experience the La-Z-Boy brand in many channels including the La-Z-Boy 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 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.

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• Retail Segment .

Our Retail segment consists of one operating segment comprised of our 205 company-owned La-Z-Boy Furniture Galleries ® stores.

Our Retail segment consists of one operating segment comprised of our 207 company-owned La-Z-Boy Stores.

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

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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.

The Wholesale segment sells directly to La-Z-Boy 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 .

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Results of Operations

Fiscal 2026 First Quarter Compared with Fiscal 2025 First Quarter

Fiscal 2026 Second Quarter Compared with Fiscal 2025 Second Quarter

La-Z-Boy Incorporated

Quarter Ended

(Unaudited, amounts in thousands, except percentages) 7/26/2025 7/27/2024 % Change

Quarter Ended Six Months Ended

(Unaudited, amounts in thousands, except percentages) 10/25/2025 10/26/2024 % Change 10/25/2025 10/26/2024 % Change

Sales $ 522,480 $ 521,027 0.3% $ 1,014,709 $ 1,016,559 (0.2) %

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Operating margin 6.9% 7.4% 5.7% 7.0%

Consolidated sales decreased $3.3 million, or 1%, in the first quarter of fiscal 2026, compared with the same period a year ago.

Sales in the first quarter of fiscal 2026 benefited from incremental sales from our retail store acquisitions in the prior year, increased sales from our retail store expansion, and growth in our core North America La-Z-Boy branded wholesale business driven by strategic pricing and surcharge actions.

These increases were more than offset by the combination of lower delivered volume in our international wholesale business due to a significant customer transition that began in the second quarter of fiscal 2025, along with lower delivered volume in our Joybird business.

Consolidated sales increased $1.5 million, or 0.3%, and decreased $1.9 million, or 0.2% in the second quarter and first six months of fiscal 2026, respectively, compared with the same periods a year ago.

Sales benefited from growth in our core North America La-Z-Boy branded wholesale business driven by strategic pricing and surcharge actions, increased sales from our retail store expansion, and incremental sales from our retail store acquisitions completed in the prior year.

These increases were largely offset by the combination of lower delivered same-store sales in our Retail segment, along with lower delivered volume in our Joybird business.

Additionally, lower delivered volume in our international wholesale businesses, due in part to a significant customer transition that began in the second quarter of fiscal 2025, negatively impacted sales in the first six months of fiscal 2026, and to a lesser extent, in the second quarter of fiscal 2026.

Operating Margin

Operating margin, which is calculated as operating income as a percentage of sales, decreased 200 basis points in the first quarter of fiscal 2026, compared with the same period a year ago.

• Gross margin, which is calculated as gross profit as a percentage of sales, decreased 60 basis points in the first quarter of fiscal 2026, compared with the same period a year ago.

◦ Increased supply chain costs, including higher distribution costs primarily related to our distribution and home delivery transformation, and increased overhead in our manufacturing operations, drove a decrease in gross margin in the first quarter of fiscal 2026 compared with the same period a year ago.

◦ Gross margin also declined due to increased promotional activity on casegoods products and accessories in the first quarter of fiscal 2026 compared with the same period a year ago.

◦ Partially offsetting the items above, gross margin in the first quarter of fiscal 2026 benefited from lower input costs compared with the same period a year ago, led by favorable inbound ocean freight and improved sourcing.

• SG&A expenses as a percentage of sales increased 140 basis points in the first quarter of fiscal 2026, compared with the same period a year ago.

Operating margin, which is calculated as operating income as a percentage of sales, decreased 50 basis points and 130 basis points in the second quarter and first six months of fiscal 2026, respectively, compared with the same periods a year ago.

• Gross margin, which is calculated as gross profit as a percentage of sales, decreased 10 basis points and 30 basis points in the second quarter and first six months of fiscal 2026, respectively, compared with the same periods a year ago.

◦ Increased supply chain costs, including higher distribution costs related to our distribution and home delivery transformation, and increased overhead in our manufacturing operations, drove a decrease in gross margin in the second quarter and first six months of fiscal 2026 compared with the same periods a year ago.

◦ Partially offsetting the item above, gross margin in the second quarter and first six months of fiscal 2026 benefited from lower input costs compared with the same periods a year ago, led by favorable inbound ocean freight and improved sourcing.

• SG&A expenses as a percentage of sales increased 40 basis points and 100 basis points in the second quarter and first six months of fiscal 2026, respectively, compared with the same periods a year ago.

◦ SG&A expense as a percentage of sales increased due to fixed cost deleverage in our Retail segment from lower delivered same-store sales combined with higher selling expenses and fixed costs resulting from our retail store expansion in support of our long-term strategy of growing our Retail segment.

◦ Partially offsetting the item above, SG&A expense as a percentage of sales benefited from lower warranty expense, driven by decreased claims activity and improved warranty trends, along with reduced marketing spend relative to the prior year.

◦ Partially offsetting the item above, SG&A expense as a percentage of sales benefited from lower warranty expense due to a reduction in our warranty liability driven by a change in which we provide our external dealers an upfront service allowance for certain labor and delivery costs that they provide under our Wholesale warranty program for La-Z-Boy products that they sell and have previously sold.

We discuss each segment’s results in the following section.

Retail Segment

Quarter Ended

(Unaudited, amounts in thousands, except percentages) 7/26/2025 7/27/2024 % Change

Quarter Ended Six Months Ended

(Unaudited, amounts in thousands, except percentages) 10/25/2025 10/26/2024 % Change 10/25/2025 10/26/2024 % Change

Sales $ 222,043 $ 221,564 0.2 % $ 429,193 $ 423,934 1.2 %

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Operating margin 10.7% 12.6% 8.6% 11.5%

The Retail segment’s sales increased $4.8 million, or 2%, in the first quarter of fiscal 2026, compared with the same period a year ago primarily due to $8.4 million of incremental sales resulting from our retail store acquisitions that occurred in fiscal 2025 along with increased sales from our retail store expansion, net of closed stores.

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

Total written sales increased 5% in the first quarter of fiscal 2026, compared with the same period a year ago.

Written same-store sales decreased 4% over the same periods, primarily due to lower consumer demand as a result of a challenging macroeconomic environment.

The Retail segment’s sales increased $0.5 million, or 0.2%, and $5.3 million, or, 1% in the second quarter and first six months of fiscal 2026, respectively, compared with the same periods a year ago.

The increase was primarily due to increased sales from our retail store expansion, net of closed stores, along with $6.0 million and $14.1 million of incremental sales in the second quarter and first six months of fiscal 2026, respectively, resulting from our retail store acquisitions that occurred in fiscal 2025.

These increases were largely and partially offset by a decline in delivered same-store sales during the second quarter and first six months of fiscal 2026, respectively.

Total written sales increased 4% in both the second quarter and first six months of fiscal 2026, compared with the same periods a year ago.

Written same-store sales decreased 2% and 3% over the same periods, 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 that have been open and company-owned for each comparable period.

Operating Margin

The Retail segment's operating margin decreased 390 basis points in the first quarter of fiscal 2026, compared with the same period a year ago.

• Gross margin decreased 30 basis points in the first quarter of fiscal 2026, compared with the same period a year ago, primarily due to increased promotional activity on casegoods products and accessories.

• SG&A expenses as a percentage of sales increased 360 basis points in the first quarter of fiscal 2026, compared with the same period a year ago, primarily due to fixed cost deleverage from lower delivered same-store sales combined with increased selling expenses and fixed costs resulting from our retail store expansion of 11 net new stores over the last 12 months, supporting our long-term strategy of growing our Retail segment.

The Retail segment's operating margin decreased 190 basis points and 290 basis points in the second quarter and first six months of fiscal 2026, respectively, compared with the same periods a year ago.

• Gross margin increased 100 basis points and 40 basis points in the second quarter and first six months of fiscal 2026, respectively, compared with the same periods a year ago, primarily due to a favorable shift in product mix towards higher margin products.

• SG&A expenses as a percentage of sales increased 290 basis points and 330 basis points in the second quarter and first six months of fiscal 2026, respectively, compared with the same periods a year ago, primarily due to fixed cost deleverage from lower delivered same-store sales combined with increased selling expenses and fixed costs resulting from our retail store expansion of 10 net new stores over the last 12 months, supporting our long-term strategy of growing our Retail segment.

Wholesale Segment

Quarter Ended

(Unaudited, amounts in thousands, except percentages) 7/26/2025 7/27/2024 % Change

Quarter Ended Six Months Ended

(Unaudited, amounts in thousands, except percentages) 10/25/2025 10/26/2024 % Change 10/25/2025 10/26/2024 % Change

Sales to external customers $ 263,556 $ 258,983 $ 518,901 $ 515,003

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Operating margin 7.9% 6.7% 7.5% 6.8%

The Wholesale segment’s sales increased $2.1 million, or 1%, in the first quarter of fiscal 2026, compared with the same period a year ago, primarily due to growth in our core North America La-Z-Boy branded wholesale business led by strategic pricing and surcharge actions, combined with a favorable shift in product mix towards higher priced products.

Additionally, sales increased for our casegoods business as a result of strategic pricing and promotional activity.

These increases in sales were partially offset by lower delivered volume in our international wholesale business due to a significant customer transition that began in the second quarter of fiscal 2025.

The Wholesale segment’s sales increased $5.5 million, or 2%, and $7.6 million, or 1% in the second quarter and first six months of fiscal 2026, respectively, compared with the same periods a year ago, primarily due to growth in our core North America La-Z-Boy branded wholesale business led by strategic pricing and surcharge actions.

The sales increase in the first six months of fiscal 2026 was partially offset by lower delivered volume in our international wholesale businesses, due in part to a significant customer transition that began in the second quarter fiscal 2025.

Operating Margin

The Wholesale segment's operating margin increased 30 basis points in the first quarter of fiscal 2026, compared with the same period a year ago.

• Gross margin decreased 60 basis points in the first quarter of fiscal 2026, compared with the same period a year ago.

◦ Increased distribution costs, primarily due to incremental expenses related to our distribution and home delivery transformation, as well as increased fixed costs, and higher outbound freight, drove a 110 basis point decrease in gross margin in the first quarter of fiscal 2026, compared with the same period a year ago.

◦ Higher manufacturing overhead costs led to a 40 basis point decrease in gross margin in the first quarter of fiscal 2026 compared with the same period a year ago.

◦ Partially offsetting the items above, lower input costs, led by favorable inbound ocean freight and improved sourcing, drove a 100 basis point increase in gross margin during the first quarter of fiscal 2026, compared with the same period a year ago.

• SG&A expense as a percentage of sales decreased 90 basis points in the first quarter of fiscal 2026, compared with the same period a year ago.

◦ Lower warranty expense resulting from decreased claims activity and improved warranty trends drove a 60 basis point decrease in SG&A expense as a percentage of sales in the first quarter of fiscal 2026, compared with the same period a year ago.

◦ Marketing expense in the first quarter of fiscal 2026 decreased relative to the prior year, resulting in a 40 basis point comparative decrease in SG&A expense as a percentage of sales.

The Wholesale segment's operating margin increased 120 basis points and 70 basis points in the second quarter and first six months of fiscal 2026, respectively, compared with the same periods a year ago.

• Gross margin decreased 10 basis points and 40 basis points in the second quarter and first six months of fiscal 2026, respectively, compared with the same periods a year ago

◦ Increased distribution costs, primarily due to incremental expenses related to our distribution and home delivery transformation, drove a 70 basis point and 90 basis point decrease in gross margin in the second quarter and first six months of fiscal 2026, respectively, compared with the same periods a year ago.

◦ The first six months of fiscal 2026 also experienced higher manufacturing overhead costs, driving a 50 basis point decrease in gross margin compared with the same period a year ago.

◦ Partially offsetting the items above, lower input costs, led by favorable inbound ocean freight and improved sourcing, drove a 60 basis point and 90 basis point increase in gross margin in the second quarter and first six months of fiscal 2026, respectively, compared with the same periods a year ago.

• SG&A expense as a percentage of sales decreased 130 basis points and 110 basis points in the second quarter and first six months of fiscal 2026, respectively, compared with the same periods a year ago

◦ The reduction in our warranty liability as a result of the change described above drove a 160 basis point and 80 basis point decrease in SG&A expense as a percentage of sales in the second quarter and first six months of fiscal 2026, respectively, compared with the same periods a year ago.

Lower warranty expense as a result of improved warranty trends drove an additional 30 basis point decrease in SG&A expense as a percentage of sales in the first six months of fiscal 2026 compared with the same period a year ago.

◦ Partially offsetting the item above, marketing expense in the second quarter of fiscal 2026 increased relative to the prior year, resulting in a 40 basis point increase in SG&A expense as a percentage of sales.

Corporate and Other

Quarter Ended

(Unaudited, amounts in thousands, except percentages) 7/26/2025 7/27/2024 % Change

Quarter Ended Six Months Ended

(Unaudited, amounts in thousands, except percentages) 10/25/2025 10/26/2024 % Change 10/25/2025 10/26/2024 % Change

Sales $ 38,689 $ 42,087 (8.1)% $ 69,924 $ 80,795 (13.5) %

1 unchanged sentence

Operating loss (16,698) (13,654) (22.3)% (33,006) (25,932) (27.3) %

Corporate and Other sales decreased $7.5 million in the first quarter of fiscal 2026, compared with the same period a year ago.

The change in sales was led by Joybird sales which decreased $6.8 million to $27.7 million in the first quarter of fiscal 2026, primarily due to lower delivered volume partially offset by a favorable shift in product mix.

Written sales for Joybird decreased 14% in the first quarter of fiscal 2026, compared with the same period a year ago, primarily from lower online sales.

Intercompany eliminations increased in the first quarter of fiscal 2026 compared with the same period a year ago due to higher sales from our Wholesale segment to our Retail segment.

Corporate and Other sales decreased $3.4 million and $10.9 million in the second quarter and first six months of fiscal 2026, respectively, compared with the same periods a year ago.

The change in sales was primarily attributable to Joybird sales which decreased $3.8 million to $34.9 million and $10.7 million to $62.6 million in the second quarter and first six months of fiscal 2026, respectively, compared with the same periods a year ago, primarily due to lower delivered volume partially offset by a favorable shift in product mix.

Written sales for Joybird increased 1% and decreased 7.0% in the second quarter and first six months of fiscal 2026, respectively, compared with the same periods a year ago.

Intercompany eliminations increased slightly in the second quarter and first six months of fiscal 2026 compared with the same periods a year ago due to higher sales from our Wholesale segment to our Retail segment.

Operating Loss

Our Corporate and Other operating loss increased $4.0 million in the first quarter of fiscal 2026, compared with the same period a year ago, primarily due to Joybird's operating loss resulting from lower delivered volume, combined with lower La-Z-Boy branded royalty income.

Our Corporate and Other operating loss increased $3.0 million and $7.1 million in the second quarter and first six months of fiscal 2026, respectively, compared with the same periods a year ago, primarily due to Joybird's operating loss resulting from lower delivered sales volume.

Non-Operating Income (Expense)

Interest Income

Interest income was $1.3 million lower in the first quarter of fiscal 2026, compared with the same period a year ago, primarily driven by lower interest rates.

Our effective tax rate was 25.0% for the first quarter of fiscal 2026, compared with 25.5% for the first quarter of fiscal 2025.

Interest income was $0.2 million and $1.5 million lower in the second quarter and first six months of fiscal 2026, respectively, compared with the same periods a year ago.

The decrease in the first six months of fiscal 2026 was primarily driven by lower interest rates.

Other Income, (Expense), Net

Other income (expense), net was $0.1 million and $0.6 million of expense in the second quarter and first six months of fiscal 2026, respectively, compared with $1.9 million and $2.5 million of expense in the same periods a year ago.

The expense in fiscal 2025 was primarily due to exchange rate losses related to our manufacturing and wholesale businesses in Thailand.

Our effective tax rate was 26.7% and 26.1% for the second quarter and first six months of fiscal 2026, respectively, compared with 26.3% and 25.9% for the second quarter and first six months of fiscal 2025, respectively.

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

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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 and cash equivalents of $318.5 million at July 26, 2025, compared with $328.4 million at April 26, 2025.

In addition, we had investments to enhance our returns on cash of $2.7 million at July 26, 2025, compared with $2.6 million at April 26, 2025.

We had cash and cash equivalents of $338.5 million at October 25, 2025, compared with $328.4 million at April 26, 2025.

In addition, we had investments to enhance our returns on cash of $2.6 million at October 25, 2025 and April 26, 2025.

The following table illustrates the main components of our cash flows:

Quarter Ended

Six Months Ended

(Unaudited, amounts in thousands) 10/25/2025 10/26/2024

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Operating Activities

During the first quarter of fiscal 2026, net cash provided by operating activities was $36.3 million, a decrease of $16.0 million compared with the same period a year ago.

The year over year decrease was primarily due to lower net income, adjusted for non-cash items, along with a smaller reduction in receivables relative to the prior year.

Our cash provided by operating activities in fiscal 2026 was primarily attributable to net income, adjusted for non-cash items, favorable changes to working capital, and higher customer deposits, partially offset by the payout of our fiscal 2025 incentive compensation award.

During the first six months of fiscal 2026, net cash provided by operating activities was $86.3 million, an increase of $18.1 million compared with the same period a year ago.

The year over year increase was primarily due to lower inventory balances and higher customer deposits, partially offset by lower net income, adjusted for non-cash items, and a smaller reduction in receivables.

Our cash provided by operating activities in the first six months of fiscal 2026 was primarily attributable to net income, adjusted for non-cash items, favorable changes to working capital, and higher customer deposits, partially offset by the payout of our fiscal 2025 incentive compensation award.

Investing Activities

During the first quarter of fiscal 2026, net cash used for investing activities was $18.8 million, an increase of $1.6 million compared with the same period a year ago, due to lower proceeds from the sale of investments, net of investment purchases, along with higher capital expenditures, partially offset by lower cash paid for acquisitions.

Cash used for investing activities in fiscal 2026 was mainly attributable to capital expenditures of $18.5 million, which were primarily related to La-Z-Boy Furniture Galleries ® (new stores and remodels) and manufacturing-related investments.

We anticipate that spending on these items will continue in fiscal 2026, along with spending related to our distribution and home delivery transformation, with full year fiscal 2026 capital expenditures expected to be in the range of $90 to $100 million.

During the first six months of fiscal 2026, net cash used for investing activities was $38.8 million, a decrease of $6.7 million compared with the same period a year ago, due to lower cash paid for acquisitions partially offset by higher capital expenditures, along with lower proceeds from the sale of investments, net of investment purchases.

Cash used for investing activities in the first six months of fiscal 2026 was mainly attributable to capital expenditures of $38.9 million, which were primarily related to La-Z-Boy Stores (new stores and remodels), manufacturing-related investments, and

spending related to our distribution and home delivery transformation.

We anticipate that spending on these items will continue throughout the remainder of fiscal 2026, with full year fiscal 2026 capital expenditures expected to be in the range of $90 to $100 million.

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

Financing Activities

During the first six months of fiscal 2026, net cash used for financing activities was $37.6 million, a decrease of $24.1 million compared with the same period a year ago, primarily due to lower share repurchases, partially offset by reduced proceeds from exercised stock options.

Cash used for financing activities in the first six months of fiscal 2026 included the following:

• Cash paid to our shareholders in quarterly dividends was $18.1 million.

Our board of directors has sole authority to determine if and when we will declare future dividends and on what terms.

We expect the board to continue declaring regular quarterly cash dividends for the foreseeable future, but it may discontinue doing so at any time at the board's discretion.

• Cash paid to repurchase 0.3 million shares of company stock was $13.3 million.

Our board of directors has authorized the repurchase of Company stock and as of October 25, 2025, 3.4 million shares remained available for repurchase pursuant to this authorization.

• Cash paid for tax withholding on stock issued as part of our employee benefit plans, net of proceeds from exercised stock options, was $4.9 million.

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”).

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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.

As of October 25, 2025, we have no borrowings outstanding under the Credit Facility and we were in compliance with our financial covenants under the Credit Facility.

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 the first quarter of fiscal 2026, net cash used for financing activities was $27.7 million, a decrease of $6.6 million compared with the same period a year ago, primarily due to lower share repurchases, partially offset by reduced proceeds from exercised stock options.

Cash used for financing activities in fiscal 2026 included the following:

• Cash paid to repurchase 0.3 million shares of company stock was $12.5 million.

Our board of directors has authorized the repurchase of Company stock and as of July 26, 2025, 3.4 million shares remained available for repurchase pursuant to this authorization.

• Cash paid to our shareholders in quarterly dividends was $9.0 million.

Our board of directors has sole authority to determine if and when we will declare future dividends and on what terms.

We expect the board to continue declaring regular quarterly cash dividends for the foreseeable future, but it may discontinue doing so at any time at the board's discretion.

• Cash paid for tax withholding on stock issued as part of our employee benefit plans, net of proceeds from exercised stock options, was $5.2 million.

Exchange Rate Changes

Due to changes in exchange rates, our cash and cash equivalents increased by $0.3 million for the quarter ended July 26, 2025.

Due to changes in exchange rates, our cash and cash equivalents increased by $0.1 million for the six months ended October 25, 2025.

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

During the first quarter of fiscal 2026, there were no material changes to the information about our contractual obligations and commitments disclosed in our Annual Report on Form 10-K for the fiscal year ended April 26, 2025.

During the second quarter of fiscal 2026, there were no material changes to the information about our contractual obligations and commitments disclosed in our Annual Report on Form 10-K for the fiscal year ended April 26, 2025.

We do not expect our continuing compliance with existing federal, state and local statutes dealing with protection of the environment to have a material effect on our capital expenditures, earnings, competitive position or liquidity.

1 unchanged sentence

We disclosed our critical accounting policies in our Annual Report on Form 10-K for the fiscal year ended April 26, 2025.

There were no material changes to our critical accounting policies or estimates during the quarter ended July 26, 2025.

There were no material changes to our critical accounting policies or estimates during the six months ended October 25, 2025.

Recent Accounting Pronouncements

1 unchanged sentence

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

During the first quarter of fiscal 2026, there were no material changes from the information contained in Item 7A of our Annual Report on Form 10-K for the fiscal year ended April 26, 2025.

During the first six months of fiscal 2026, there were no material changes from the information contained in Item 7A of our Annual Report on Form 10-K for the fiscal year ended April 26, 2025.

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 2. Management’s Discussion and Analysis