LA-Z-BOY INC 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. Management's Report to Our Shareholders Management's Responsibility for Financial Information Management is responsible for the consistency, integrity and preparation of the information contained in this Annual Report on Form 10-K. The consolidated financial statements and other information contained in this Annual Report on Form 10-K have been prepared in accordance with accounting principles generally accepted in the United States of America and include necessary judgments and estimates by management. To fulfill our responsibility, we maintain comprehensive systems of internal control designed to provide reasonable assurance that assets are safeguarded and transactions are executed in accordance with established procedures. The concept of reasonable assurance is based upon recognition that the cost of the controls should not exceed the benefit derived. We believe our systems of internal control provide this reasonable assurance. The board of directors exercised its oversight role with respect to our systems of internal control primarily through its audit committee, which is comprised of independent directors. The committee oversees our systems of internal control, accounting practices, financial reporting and audits to assess whether their quality, integrity, and objectivity are sufficient to protect shareholders' investments. In addition, our consolidated financial statements have been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, whose report also appears in this Annual Report on Form 10-K. Management's Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as that term is defined in Rule 13a-15(f) of the Exchange Act. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal controls over financial reporting based upon the framework in "Internal Control—Integrated Framework (2013)" set forth by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, our management concluded that our internal control over financial reporting was effective as of April 25, 2026. PricewaterhouseCoopers LLP, an independent registered public accounting firm, audited the effectiveness of the Company's internal control over financial reporting as of April 25, 2026, as stated in its report which appears herein. 33 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of La-Z-Boy Incorporated Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheet of La-Z-Boy Incorporated and its subsidiaries (the "Company") as of April 25, 2026 and April 26, 2025, and the related consolidated statements of income, of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended April 25, 2026, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended April 25, 2026 appearing under Item 16 (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of April 25, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of April 25, 2026 and April 26, 2025, and the results of its operations and its cash flows for each of the three years in the period ended April 25, 2026 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of April 25, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 34 Table of Contents Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Goodwill Impairment Assessment – Joybird Reporting Unit As described in Notes 1 and 7 to the consolidated financial statements, management tests goodwill for impairment on an annual basis in the fourth quarter of the fiscal year, or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. For the annual test, management performed a quantitative goodwill impairment test for the Joybird reporting unit. To estimate the fair value of the reporting unit, management applied a combination of the income approach and the market approach, weighted 75% and 25%, respectively. The income approach used discounted future cash flows and key assumptions related to sales and operating income projections, terminal growth rate, discount rate, and tax rate. The market approach used the guideline public company method, which derives a valuation from market multiples based on revenue for comparable public companies and was adjusted for a control premium. As of April 25, 2026, the Company’s goodwill balance was $243.3 million, and the goodwill associated with the Joybird reporting unit was $35.5 million after management recorded an impairment charge of $20 million during the fourth quarter. The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment of the Joybird reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the Joybird reporting unit; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to sales and operating income projections and the discount rate used in the income approach, and the market multiples based on revenue for comparable public companies used in the market approach; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of the Joybird reporting unit. These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the Joybird reporting unit; (ii) evaluating the appropriateness of the income approach and market approach used by management; (iii) testing the completeness and accuracy of underlying data used in the income approach and market approach; and (iv) evaluating the reasonableness of the significant assumptions used by management related to the sales and operating income projections and discount rate used in the income approach, and the market multiples based on revenue for comparable public companies used in the market approach. Evaluating management’s assumptions related to the sales and operating income projections involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the Joybird reporting unit; (ii) the consistency with external market and industry data; and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the Company’s income approach and market approach; (ii) the reasonableness of the discount rate assumption used in the income approach; and (iii) the reasonableness of the market multiples based on revenue for comparable public companies assumption used in the market approach. /s/ PricewaterhouseCoopers LLP Detroit, Michigan June 16, 2026 We have served as the Company’s auditor since 1968. 35 Table of Contents LA-Z-BOY INCORPORATED CONSOLIDATED STATEMENT OF INCOME Fiscal Year Ended (52 weeks) (52 weeks) (52 weeks) (Amounts in thousands, except per share data) 4/25/2026 4/26/2025 4/27/2024 Sales $ 2,126,635 $ 2,109,207 $ 2,047,027 Cost of sales 1,190,034 1,182,789 1,165,357 Gross profit 936,601 926,418 881,670 Selling, general and administrative expense 787,427 770,000 730,874 Goodwill impairment 19,967 20,581 — Operating income 129,207 135,837 150,796 Interest expense ( 524 ) ( 545 ) ( 455 ) Interest income 11,880 14,877 15,482 Other income (expense), net ( 1,758 ) ( 3,035 ) ( 71 ) Income before income taxes 138,805 147,134 165,752 Income tax expense 35,894 46,182 41,116 Net income 102,911 100,952 124,636 Net income attributable to noncontrolling interests ( 926 ) ( 1,396 ) ( 2,010 ) Net income attributable to La-Z-Boy Incorporated $ 101,985 $ 99,556 $ 122,626 Basic weighted average common shares 40,982 41,601 42,878 Basic net income attributable to La-Z-Boy Incorporated per share $ 2.49 $ 2.39 $ 2.86 Diluted weighted average common shares 41,341 42,345 43,280 Diluted net income attributable to La-Z-Boy Incorporated per share $ 2.47 $ 2.35 $ 2.83 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 36 Table of Contents LA-Z-BOY INCORPORATED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Fiscal Year Ended (52 weeks) (52 weeks) (52 weeks) (Amounts in thousands) 4/25/2026 4/26/2025 4/27/2024 Net income $ 102,911 $ 100,952 $ 124,636 Other comprehensive income (loss) Currency translation adjustment 2,322 3,372 ( 1,955 ) Net unrealized gain on marketable securities, net of tax 54 91 391 Net pension amortization, net of tax 69 ( 92 ) 419 Total other comprehensive income (loss) 2,445 3,371 ( 1,145 ) Total comprehensive income before noncontrolling interests 105,356 104,323 123,491 Comprehensive income attributable to noncontrolling interests ( 1,324 ) ( 2,471 ) ( 1,207 ) Comprehensive income attributable to La-Z-Boy Incorporated $ 104,032 $ 101,852 $ 122,284 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 37 Table of Contents LA-Z-BOY INCORPORATED CONSOLIDATED BALANCE SHEET (Amounts in thousands, except par value) 4/25/2026 4/26/2025 Current assets Cash and equivalents $ 303,213 $ 328,449 Receivables, net of allowance of $ 5,196 at 4/25/2026 and $ 5,042 at 4/26/2025 131,039 139,533 Inventories, net 218,445 255,285 Assets held for sale 20,209 — Other current assets 101,008 82,421 Total current assets 773,914 805,688 Property, plant and equipment, net 356,717 339,212 Goodwill 243,300 205,590 Other intangible assets, net 77,582 51,161 Right of use lease assets 520,726 452,848 Other long-term assets, net 70,096 67,663 Total assets $ 2,042,335 $ 1,922,162 Current liabilities Accounts payable 101,875 95,984 Lease liabilities, short-term 88,762 80,592 Accrued expenses and other current liabilities 239,258 244,215 Total current liabilities 429,895 420,791 Lease liabilities, long-term 475,526 410,265 Other long-term liabilities 74,240 59,130 Shareholders' equity Preferred shares – 5,000 authorized; none issued — — Common shares, $ 1 par value – 150,000 authorized; 40,349 outstanding at 4/25/2026 and 41,164 outstanding at 4/26/2025 40,349 41,164 Capital in excess of par value 400,752 385,601 Retained earnings 610,423 597,432 Accumulated other comprehensive loss ( 1,527 ) ( 3,574 ) Total La-Z-Boy Incorporated shareholders' equity 1,049,997 1,020,623 Noncontrolling interests 12,677 11,353 Total equity 1,062,674 1,031,976 Total liabilities and equity $ 2,042,335 $ 1,922,162 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 38 Table of Contents LA-Z-BOY INCORPORATED CONSOLIDATED STATEMENT OF CASH FLOWS Fiscal Year Ended (52 weeks) (52 weeks) (52 weeks) (Amounts in thousands) 4/25/2026 4/26/2025 4/27/2024 Cash flows from operating activities Net income $ 102,911 $ 100,952 $ 124,636 Adjustments to reconcile net income to cash provided by operating activities (Gain)/loss on disposal and impairment of assets ( 7,287 ) 1,998 1,101 (Gain)/loss on sale of investments ( 377 ) ( 235 ) ( 1,199 ) Provision for doubtful accounts 463 851 511 Depreciation and amortization 47,440 46,667 48,552 Amortization of right-of-use lease assets 84,436 76,964 76,133 Lease impairment/(settlement) — — ( 1,175 ) Equity-based compensation expense 15,688 17,400 14,426 Goodwill impairment 19,967 20,581 — Change in deferred taxes 18,263 5,116 ( 3,268 ) Change in receivables 1,365 ( 1,906 ) ( 16,811 ) Change in inventories 26,323 12,792 19,877 Change in other assets ( 10,728 ) 8,701 10,303 Change in payables 4,052 ( 2,066 ) ( 8,606 ) Change in lease liabilities ( 84,233 ) ( 78,609 ) ( 76,766 ) Change in other liabilities ( 14,177 ) ( 21,935 ) ( 29,587 ) Net cash provided by operating activities 204,106 187,271 158,127 Cash flows from investing activities Proceeds from disposals of assets 26,083 412 4,972 Capital expenditures ( 76,306 ) ( 74,280 ) ( 53,551 ) Purchases of investments ( 3,713 ) ( 6,990 ) ( 18,351 ) Proceeds from sales of investments 1,751 11,994 24,816 Acquisitions ( 86,423 ) ( 29,525 ) ( 39,440 ) Net cash used for investing activities ( 138,608 ) ( 98,389 ) ( 81,554 ) Cash flows from financing activities Payments on finance lease liabilities ( 918 ) ( 663 ) ( 489 ) Payments for debt issuance costs ( 784 ) — — Holdback payments for acquisitions — — ( 5,000 ) Stock issued for stock and employee benefit plans, net of shares withheld for taxes ( 4,227 ) 12,350 10,872 Repurchases of common stock ( 47,270 ) ( 77,930 ) ( 52,773 ) Dividends paid to shareholders ( 37,947 ) ( 34,955 ) ( 32,665 ) Dividends paid to minority interest joint venture partners (1) — ( 1,414 ) ( 1,172 ) Net cash used for financing activities ( 91,146 ) ( 102,612 ) ( 81,227 ) Effect of exchange rate changes on cash and equivalents 412 1,081 ( 926 ) Change in cash, cash equivalents and restricted cash ( 25,236 ) ( 12,649 ) ( 5,580 ) Cash, cash equivalents and restricted cash at beginning of period 328,449 341,098 346,678 Cash, cash equivalents and restricted cash at end of period $ 303,213 $ 328,449 $ 341,098 Supplemental disclosure of non-cash investing activities Capital expenditures included in accounts payable $ 9,467 $ 7,234 $ 5,952 (1) Includes dividends paid to joint venture minority partners resulting from the repatriation of dividends from our foreign earnings that we no longer consider permanently reinvested. The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 39 Table of Contents LA-Z-BOY INCORPORATED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Amounts in thousands, except per share amounts) Common Shares Capital in Excess of Par Value Retained Earnings Accumulated Other Comprehensive Income (Loss) Non-Controlling Interests Total At April 29, 2023 $ 43,318 $ 358,891 $ 545,155 $ ( 5,528 ) $ 10,261 $ 952,097 Net income — — 122,626 — 2,010 124,636 Other comprehensive income (loss) — — — ( 342 ) ( 803 ) ( 1,145 ) Stock issued for stock and employee benefit plans, net of cancellations and withholding tax 718 12,194 ( 2,040 ) — — 10,872 Purchases of 1,596 shares of common stock ( 1,596 ) ( 17,026 ) ( 34,592 ) — — ( 53,214 ) Stock option and restricted stock expense — 14,426 — — — 14,426 Dividends declared and paid ($ 0.763 /share) (1) — — ( 32,665 ) — ( 1,172 ) ( 33,837 ) Dividends declared not paid ($ 0.763 /share) — — ( 475 ) — — ( 475 ) At April 27, 2024 $ 42,440 $ 368,485 $ 598,009 $ ( 5,870 ) $ 10,296 $ 1,013,360 Net income — — 99,556 — 1,396 100,952 Other comprehensive income (loss) — — — 2,296 1,075 3,371 Stock issued for stock and employee benefit plans, net of cancellations and withholding tax 690 14,541 ( 2,881 ) — — 12,350 Purchases of 1,966 shares of common stock ( 1,966 ) ( 14,825 ) ( 61,789 ) — — ( 78,580 ) Stock option and restricted stock expense — 17,400 — — — 17,400 Dividends declared and paid ($ 0.84 /share) (1) — — ( 34,955 ) — ( 1,414 ) ( 36,369 ) Dividends declared not paid ($ 0.84 /share) — — ( 508 ) — — ( 508 ) At April 26, 2025 $ 41,164 $ 385,601 $ 597,432 $ ( 3,574 ) $ 11,353 $ 1,031,976 Net income — — 101,985 — 926 102,911 Other comprehensive income (loss) — — — 2,047 398 2,445 Stock issued for stock and employee benefit plans, net of cancellations and withholding tax 438 1,111 ( 5,776 ) — — ( 4,227 ) Purchases of 1,253 shares of common stock ( 1,253 ) ( 1,648 ) ( 44,693 ) — — ( 47,594 ) Stock option and restricted stock expense — 15,688 — — — 15,688 Dividends declared and paid ($ 0.924 /share) — — ( 37,947 ) — — ( 37,947 ) Dividends declared not paid ($ 0.924 /share) — — ( 578 ) — — ( 578 ) At April 25, 2026 $ 40,349 $ 400,752 $ 610,423 $ ( 1,527 ) $ 12,677 $ 1,062,674 (1) Non-controlling interests include dividends paid to joint venture minority partners resulting from the repatriation of dividends from our foreign earnings that we no longer consider permanently reinvested. The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 40 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1: Accounting Policies The following is a summary of significant accounting policies followed in the preparation of La-Z-Boy Incorporated and its subsidiaries' (individually and collectively, "we," "our," "us," "La-Z-Boy" or the "Company") consolidated financial statements. Our fiscal year ends on the last Saturday of April. Our 2026, 2025 and 2024 fiscal years included 52 weeks. Principles of Consolidation The accompanying consolidated financial statements include the consolidated accounts of La-Z-Boy Incorporated and our majority-owned subsidiaries. The portion of less than wholly-owned subsidiaries is included as non-controlling interest. All intercompany transactions have been eliminated, including any related profit on intercompany sales. Use of Estimates The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. These principles require management to make estimates and assumptions that affect the reported amounts or disclosures of assets, liabilities (including contingent liabilities), sales, and expenses at the date of the financial statements. Actual results could differ from those estimates. Cash and Equivalents For purposes of the consolidated balance sheet and statement of cash flows, we consider all highly liquid debt instruments purchased with initial maturities of three months or less to be cash equivalents. The carrying value of cash equivalents approximates fair value due to their short-term nature. As of April 25, 2026, and April 26, 2025 we had no restricted cash. Inventories Inventories are stated at the lower of cost or market. Cost is determined using the last-in, first-out ("LIFO") basis for approximately 57 % and 59 % of our inventories at April 25, 2026, and April 26, 2025, respectively. Cost is determined for all other inventories on a first-in, first-out ("FIFO") basis. The majority of our La-Z-Boy Wholesale segment inventory uses the LIFO method of accounting, while the FIFO method is used primarily in our Retail segment and Joybird business. Property, Plant and Equipment Items capitalized, including significant betterments to existing facilities, are recorded at cost. Capitalized computer software costs include internal and external costs incurred during the software's development stage. Internal costs relate primarily to employee activities for coding and testing the software under development. Computer software costs are depreciated over three years . All maintenance and repair costs are expensed when incurred. Depreciation is computed principally using straight-line methods over the estimated useful lives of the assets. Disposal and Impairment of Long-Lived Assets Retirement or dispositions of long-lived assets are recorded based on carrying value and proceeds received. Any resulting gains or losses are recorded as a component of selling, general and administrative ("SG&A") expenses. We review the carrying value of our long-lived assets, which includes our right-of-use lease assets and our amortizable intangible assets, for impairment if events or changes in circumstances indicate that their carrying amounts may not be recoverable. Our assessment of recoverability is based on our best estimates using either quoted market prices or an analysis of the undiscounted projected future cash flows by asset group in order to determine if there is any indicator of impairment requiring us to further assess the fair value of our long-lived assets. Our asset groups consist of our operating segments in our Wholesale reportable segment, each of our retail stores, our Joybird operating segment, and other corporate assets, which are evaluated at the consolidated level. 41 Amortizable Intangible Assets We have an amortizable intangible asset for the Joybird ® trade name, which is amortized on a straight-line basis over its estimated useful life of eight years and will be fully amortized during the first quarter of fiscal 2027. All intangible amortization expense is recorded as a component of SG&A expense. Amortizable intangible assets are tested for impairment if events or changes in circumstances indicate that the asset groups to which they are part of might be impaired. If we determine an assessment for impairment is necessary, we establish the fair value of these amortizable intangible assets based on the multi-period excess earnings method, a variant of the income approach, and the relief from royalty method, as applicable. Indefinite-Lived Intangible Assets and Goodwill Indefinite-lived intangible assets include our American Drew ® trade name and the reacquired right to own and operate La-Z-Boy Stores we have acquired. Prior to our retail acquisitions, we licensed the exclusive right to own and operate La-Z-Boy Stores (and to use the associated trademarks and trade name) in those markets to the dealers whose assets we acquired, and we reacquired these rights when we purchased the dealers' other assets. The reacquired rights to own and operate La-Z-Boy Stores are indefinite-lived because our retailer agreements are perpetual agreements that have no specific expiration date and no renewal options. A retailer agreement remains in effect as long as the independent retailer is not in default under the terms of the agreement. Our goodwill relates to the acquisitions of La-Z-Boy Stores and Joybird ® , an omni-channel retailer and manufacturer of upholstered furniture. The reporting unit for goodwill arising from retail store acquisitions is our Retail operating segment and the goodwill arising from the acquisition of Joybird is the Joybird operating segment. We test indefinite-lived intangibles and goodwill for impairment on an annual basis in the fourth quarter of our fiscal year, or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. We have the option to first assess qualitative factors in order to determine if it is more likely than not that the fair value of our intangible assets or reporting units are greater than their carrying value. If the qualitative assessment leads to a determination that the intangible asset/reporting unit’s fair value may be less than its carrying value, or if we elect to bypass the qualitative assessment altogether, we are required to perform a quantitative impairment test by calculating the fair value of the intangible asset/reporting unit and comparing the fair value with its associated carrying value. When we perform the quantitative test for indefinite-lived intangible assets, or when we apply purchase accounting for acquisitions of retail stores, we establish the fair value of our indefinite-lived trade names and reacquired rights based upon the relief from royalty method. When we perform the quantitative test for goodwill, we establish the fair value for the reporting unit based on the income approach, in which we utilize a discounted cash flow model, the market approach, in which we utilize market multiples of comparable companies, or a combination of both approaches. In situations where the fair value is less than the carrying value, an impairment charge would be recorded for the shortfall. Investments Available-for-sale debt securities are recorded at fair value with the net unrealized gains and losses (that are deemed to be temporary) reported as a component of other comprehensive income/(loss). Equity securities are recorded at fair value with unrealized gains and losses recorded in other income (expense), net. Realized gains and losses for all investments and charges for other-than-temporary impairments of debt securities are included in determining net income, with related purchase costs based on the first-in, first-out method. We evaluate our available-for-sale debt investments for possible other-than-temporary impairments by reviewing factors such as the extent to which an investment's fair value is below our cost basis, the issuer's financial condition, and our ability and intent to hold the investment for sufficient time for its market value to recover. For impairments that are other-than-temporary, an impairment loss is recognized in earnings equal to the difference between the investment's cost and its fair value at the balance sheet date of the reporting period for which the assessment is made. The fair value of the investment then becomes the new amortized cost basis of the investment and it is not adjusted for subsequent recoveries in fair value. Life Insurance Life insurance policies are recorded at the amount that could be realized under the insurance contract as of the date of our consolidated balance sheet. These assets are classified as other long-term assets on our consolidated balance sheet and are used to fund our executive deferred compensation plan and performance compensation retirement plan. The change in cash surrender or contract value is recorded as income or expense, in other income (expense), net, during each period. 42 Customer Deposits We collect a deposit on a portion of the total merchandise price at the time a customer order is placed in one of our company-owned retail stores, and through our website, www.la-z-boy.com. We record this as a customer deposit, which is included in our accrued expenses and other current liabilities on our consolidated balance sheet. The balance of the order is paid in full prior to delivery of the product. At the time the customer places an order through www.joybird.com, we collect the entire amount owed and record this as a customer deposit. Revenue Recognition and Related Allowances Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to receive in exchange for those goods or services. We generate revenues primarily by manufacturing/importing and delivering upholstery and casegoods (wood) furniture products to independent furniture retailers, independently-owned La-Z-Boy Stores or the end consumer. Each unit of furniture is a separate performance obligation, and we satisfy our performance obligation when control of our product is passed to our customer, which is the point in time that our customers are able to direct the use of and obtain substantially all of the remaining economic benefit of the goods or services. The majority of our wholesale shipping agreements are freight-on-board shipping point and risk of loss transfers to our customer once the product is out of our control. Accordingly, revenue is recognized for product shipments on third-party carriers at the point in time that our product is loaded onto the third-party container or truck and that container or truck leaves our facility. For our imported products, we recognize revenue at the point in time that legal ownership is transferred, which may not occur until after the goods have passed through U.S. Customs. In all cases, this revenue includes amounts we bill to customers for freight charges, because we have elected to treat shipping activities that occur after the customer has obtained control of our product as a fulfillment cost rather than an additional promised service. Because of this election, we recognize revenue for shipping when control of our product passes to our customer, and the shipping costs are accrued when the freight revenue is recognized. Revenue for product shipments on company-owned trucks is recognized for the product and freight at the point in time that our product is delivered to our customer's location. We recognize revenue for retail sales and online sales to the end consumer through our company-owned retail stores, www.la-z-boy.com or www.joybird.com, once the end consumer has taken control of the furniture, at which point legal title has passed to them. This takes place when the product is delivered to the end consumer's home. Home delivery is not a promised service to our customer, and is not a separate performance obligation, because home delivery is a fulfillment activity as the costs are incurred as part of transferring our product to the end consumer. At the time the customer places an order through our company-owned retail stores or www.la-z-boy.com, we collect a deposit on a portion of the total merchandise price. We record this as a customer deposit, which is included in accrued expenses and other current liabilities on our consolidated balance sheet. The balance of the order is paid in full prior to delivery of the product. Once the order is taken through our company-owned retail stores or www.la-z-boy.com we recognize a contract asset and a corresponding deferred revenue liability for the difference between the total order and the deposit collected. The contract asset is included in other current assets on our consolidated balance sheet and the deferred revenue is included in accrued expenses and other current liabilities on our consolidated balance sheet. At the time the customer places an order through www.joybird.com, we collect the entire amount owed and record this as a customer deposit. Because the entire amount owed is collected at the time of the order, there is no contract asset recorded for Joybird sales. At the time we recognize revenue, we make provisions for estimated refunds, product returns, and warranties, as well as other incentives that we may offer to customers. When estimating our incentives, we utilize either the expected value method or the most likely amount to determine the amount of variable consideration. We use either method depending on which method will provide the best estimate of the variable consideration, and we only include variable consideration when it is probable that there will not be a significant reversal in the amount of cumulative revenue recognized when the uncertainty associated with the variable consideration is subsequently resolved. Incentives offered to customers include cash discounts, rebates, advertising agreements and other sales incentive programs. Our sales incentives, including cash discounts and rebates, are recorded as a reduction to revenues. Service allowances are for a distinct good or service with our customers and are recorded as a component of SG&A expense in our consolidated statement of income, and are not recorded as a reduction of revenue and are not considered variable consideration. We use substantial judgment based on the type of variable consideration or service allowance, historical experience and expected sales volume when estimating these provisions. The expected costs associated with our warranties and service allowances are recognized as expense when our products are sold. For sales tax, we elected to exclude from the measurement of the transaction price all taxes imposed on and concurrent with a specific revenue-producing 43 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. All orders are fulfilled within one year of order date, therefore we do not have any unfulfilled performance obligations. Additionally, we elected the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component because at contract inception we expect the period between when we transfer our product to our customer and when the customer pays for the product to be one year or less. Allowance for Credit Losses Trade accounts receivable arise from the sale of products on trade credit terms. On a quarterly basis, we review all significant accounts as to their past due balances, as well as collectability of the outstanding trade accounts receivable for possible write off. It is our policy to write off the accounts receivable against the allowance account when we deem the receivable to be uncollectible. Additionally, we review orders from dealers that are significantly past due, and we ship product only when our ability to collect payment from our customer for the new order is probable. Our allowances for credit losses reflect our best estimate of losses inherent in the trade accounts receivable balance. We determine the allowance based on known troubled accounts, weighing probabilities of future conditions and expected outcomes, and other currently available evidence. Cost of Sales Our cost of sales consists primarily of the cost to manufacture or purchase our merchandise, inspection costs, internal transfer costs, in-bound freight costs, outbound shipping costs, as well as warehousing costs, occupancy costs, and depreciation expense related to our manufacturing facilities, distribution centers and equipment. Selling, General and Administrative Expenses SG&A expenses include the costs of selling our products and other general and administrative costs. Selling expenses are primarily composed of commissions, advertising, warranty, bad debt expense, and compensation and benefits of employees performing various sales functions. Additionally, the occupancy costs of our retail facilities are included as a component of SG&A. Other general and administrative expenses included in SG&A are composed primarily of compensation and benefit costs for administrative employees and other administrative costs. Other Income (Expense), Net Other income (expense), net is made up primarily of foreign currency exchange net gain/(loss), gain/(loss) on the sale of investments, and unrealized gain/(loss) on equity securities. Research and Development Costs Research and development costs are charged to expense in the periods incurred. Expenditures for research and development costs were $ 10.8 million , $ 9.9 million, and $ 9.6 million for the fiscal years ended April 25, 2026, April 26, 2025, and April 27, 2024, respectively, and are included as a component of SG&A. Advertising Expenses Production costs of commercials, programming and costs of other advertising, promotion and marketing programs are charged to expense in the period in which the commercial or advertisement is first aired or released. Gross advertising expenses were $ 148.3 million, $ 149.6 million, and $ 150.9 million for the fiscal years ended April 25, 2026, April 26, 2025, and April 27, 2024, respectively. A portion of our advertising program is a national advertising campaign. This campaign is a shared advertising program with independently-owned La-Z-Boy Stores, which reimburse us for approximately 20 % of the cost of the program (excluding company-owned stores). Because of this shared cost arrangement, the advertising expense is reported as a component of SG&A, while the dealers' reimbursement portion is reported as a component of sales. 44 Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. In periods when deferred tax assets are recorded, we are required to estimate whether recoverability is more likely than not (i.e. a likelihood of more than 50%), based on, among other things, forecasts of taxable earnings in the related tax jurisdiction. We consider historical and projected future results of operations, the eligible carry-forward period, tax law changes, tax planning opportunities, and other relevant considerations when making judgments about realizing the value of our deferred tax assets. We recognize in our consolidated financial statements the benefit of a position taken or expected to be taken in a tax return when it is more likely than not that the position would be sustained upon examination by tax authorities. A recognized tax position is then measured at the largest amount of benefit that is more likely than not to be realized upon settlement. Changes in judgment that result in subsequent recognition, derecognition or change in a measurement date of a tax position taken in a prior annual period (including any related interest and penalties) are recognized as a discrete item in the interim period in which the change occurs. Foreign Currency Translation Foreign currency transaction gains and losses associated with translating assets and liabilities denominated in a currency that is different than a subsidiary's' functional currency, are recorded in cost of sales and other income (expense), net in our consolidated statement of income. Assets and liabilities of foreign subsidiaries whose functional currency is their local currency are translated at the year-end exchange rates, and revenues and expenses are translated at average exchange rates for the period, with the corresponding translation effect included as a component of other comprehensive income. Accounting for Stock-Based Compensation We estimate the fair value of equity-based awards, including option awards and stock-based awards that vest based on market conditions, on the date of grant using option-pricing models. The value of the portion of the equity-based awards that are ultimately expected to vest is recognized as expense over the requisite service periods in our consolidated statement of income using a straight-line single-option method. We measure stock-based compensation cost for liability-based awards based on the fair value of the award on the grant date, and recognize it as expense over the vesting period. The liability for these awards is remeasured and adjusted to its fair value at the end of each reporting period until paid. We record compensation cost for stock-based awards that vest based on performance conditions ratably over the vesting periods when the vesting of such awards become probable. Commitments and Contingencies We establish an accrued liability for legal matters when those matters present loss contingencies that are both probable and reasonably estimable. As a litigation matter develops and in conjunction with any outside legal counsel handling the matter, we evaluate on an ongoing basis whether such matter presents a loss contingency that is probable and reasonably estimable. If, at the time of evaluation, the loss contingency related to a litigation matter is not both probable and reasonably estimable, the matter will continue to be monitored for further developments that would make such loss contingency both probable and reasonably estimable. Once the loss contingency related to a litigation matter is deemed to be both probable and reasonably estimable, we will establish an accrued liability with respect to such loss contingency and record a corresponding amount of litigation-related expense. We continue to monitor the matter for further developments that could affect the amount of the accrued liability that has been previously established. Insurance/Self-Insurance We use a combination of insurance and self-insurance for a number of risks, including workers' compensation, general liability, vehicle liability and the company-funded portion of employee-related health care benefits. Liabilities associated with these risks are estimated in part by considering historic claims experience, demographic factors, severity factors and other assumptions. 45 We have various excess loss coverages for employee-related health care benefits, vehicle liability, product liability, and workers' compensation liabilities. Our deductibles generally do not exceed $ 2.5 million. Recent Accounting Pronouncements Accounting Pronouncement 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 2025-06 Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software Fiscal 2029 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 None of the below acquisitions were significant to our consolidated financial statements, and, therefore, pro-forma financial information is not presented. All of our provisional purchase accounting estimates for the acquisition completed in fiscal 2026 are based on the information and data available to us as of the time of the issuance of these financial statements, and in accordance with Accounting Standard Codification Topic 805-10-25-15, are subject to change within the first 12 months following the acquisition as we gain additional data. Each of the following Retail acquisitions completed in fiscal 2026, 2025, and 2024 reflect 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 Store network. Prior to each Retail acquisition completed in fiscal 2026, 2025, and 2024, we licensed to the counterparty the exclusive right to own and the operate La-Z-Boy Stores (and to use the associated trademarks and trade name) in each of their respective markets, and we reacquired these rights when we consummated the transaction. These reacquired 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 these arrangements resulted in no settlement gain or loss as the contractual terms were at market. For federal income tax purposes, we amortize and deduct these indefinite-lived intangible assets and goodwill, if any, over 15 years. Southeast Region of the United States Acquisition On October 28, 2025, we completed our acquisition of the Atlanta, Georgia, central/northeast Florida, and Knoxville, Tennessee business that operated 15 independently-owned La-Z-Boy Stores and four distribution centers for $ 90.2 million, inclusive of and subject to further customary adjustments. We paid total cash of $ 85.8 million during the third quarter of fiscal 2026 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 $ 28.3 million related to the 46 reacquired rights described above. We also recognized $ 57.6 million of goodwill in our Retail segment primarily related to future growth potential of the business along with synergies we expect from the integration of the acquired stores. We based the purchase price allocation on fair values at the date of acquisition as follows: (Amounts in thousands) 10/28/2025 Fair value of consideration: Cash $ 85,796 Forgiveness of accounts receivable 4,358 Total fair value of consideration 90,154 Amounts recognized for identifiable assets acquired and liabilities assumed: Inventory 9,239 Other current assets 4,682 Property, plant and equipment 814 Indefinite-lived reacquired rights 28,339 Right of use lease assets 58,838 Lease liabilities, short-term ( 5,016 ) Customer deposits ( 5,869 ) Other current liabilities ( 4,682 ) Lease liabilities, long-term ( 53,822 ) Total identifiable net assets acquired 32,523 Goodwill $ 57,631 Prior Year Acquisitions We completed the following acquisitions in fiscal 2025. Lansing and Portage, Michigan Acquisition On April 7, 2025, we completed our acquisition of the Lansing and Portage, Michigan businesses that operated two independently-owned La-Z-Boy Stores for $ 5.7 million, inclusive of customary adjustments. We paid total cash of $ 5.3 million during the fourth quarter of fiscal 2025 and first quarter of fiscal 2026 and the remaining consideration included forgiveness of accounts receivable and payments based on working capital adjustments. As part of the acquisition, we recorded an indefinite-lived intangible asset of $ 2.1 million related to the reacquired rights described above. We also recognized $ 3.8 million of goodwill in our Retail segment primarily related to future growth potential of the business along with synergies we expect from the integration of the acquired stores. Toledo , Ohio Acquisition On January 16, 2025, we completed our acquisition of the Toledo, Ohio business that operated two independently-owned La-Z-Boy Stores for $ 5.9 million, inclusive of customary adjustments. The acquisition also included the purchase of the building and land for one of the stores. We paid total cash of $ 5.7 million during the third and fourth 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 $ 0.6 million of goodwill in our Retail segment primarily related to future growth potential of the business along with synergies we expect from the integration of the acquired stores. Melbourne and Cocoa, Florida Acquisition On September 10, 2024, we completed our acquisition of the Melbourne and Cocoa, Florida businesses that operated two independently-owned La-Z-Boy Stores and one distribution center for $ 11.4 million, inclusive of customary adjustments. The acquisition also included the purchase of buildings and land for both stores and the distribution center. We paid total cash of $ 11.3 million during the second and third 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 $ 0.9 million related to the reacquired rights described above. We also recognized $ 1.7 million of 47 goodwill in our Retail segment primarily related to future growth potential of the business along with synergies we expect from the integration of the acquired stores. Davenport, Iowa Acquisition On July 22, 2024, we completed our acquisition of the Davenport, Iowa business that operated one independently-owned La-Z-Boy 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 primarily related to future growth potential of the business along with synergies we expect from the integration of the acquired store. We completed the following acquisitions in fiscal 2024. Bradenton and Sarasota, Florida Acquisition On April 8, 2024, we completed our acquisition of the Bradenton and Sarasota, Florida businesses that operated two independently-owned La-Z-Boy Stores for $ 15.7 million, inclusive of customary adjustments. The acquisition also included the purchase of buildings and land for both stores. We paid total cash of $ 15.3 million during the fourth quarter of fiscal 2024 and first quarter 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 $ 1.9 million related to the reacquired rights described above. We also recognized $ 4.7 million of goodwill in our Retail segment primarily related to future growth potential of the business along with synergies we expect from the integration of the acquired stores. Illinois and Indiana Acquisition On December 11, 2023, we completed our acquisition of the Illinois and Indiana businesses that operated six independently-owned La-Z-Boy Stores and one distribution center for $ 18.4 million, inclusive of customary adjustments. The acquisition also included the purchase of buildings and land for five of the stores. We paid total cash of $ 17.0 million during the third and fourth quarters of fiscal 2024 and the remaining consideration included forgiveness of accounts receivable and payments based on working capital adjustments. As part of the acquisition, we recorded an indefinite-lived intangible asset of $ 4.2 million related to the reacquired rights described above. We also recognized $ 0.6 million of goodwill in our Retail segment primarily related to future growth potential of the business along with synergies we expect from the integration of the acquired stores. Lafayette, Louisiana Acquisition On October 23, 2023, we completed our acquisition of the Lafayette, Louisiana business that operated one independently-owned La-Z-Boy Store and one distribution center for $ 2.8 million, inclusive of customary adjustments. We paid total cash of $ 2.6 million during the second and third quarters of fiscal 2024 and the remaining consideration included forgiveness of accounts receivable and payments based on working capital adjustments. As part of the acquisition, we recorded an indefinite-lived intangible asset of $ 0.7 million related to the reacquired rights described above. We also recognized $ 2.1 million of goodwill in our Retail segment primarily related to future growth potential of the business along with synergies we expect from the integration of the acquired store. Colorado Springs, Colorado Acquisition On July 17, 2023, we completed our acquisition of the Colorado Springs, Colorado business that operated two independently-owned La-Z-Boy Stores and one distribution center for $ 6.0 million, inclusive of customary adjustments. We paid total cash of $ 5.6 million during the first and second quarters of fiscal 2024 and the remaining consideration included forgiveness of accounts receivable and payments based on working capital adjustments. As part of the acquisition, we recorded an indefinite-lived intangible asset of $ 2.1 million related to the reacquired rights described above. We also recognized $ 2.2 million of goodwill in our Retail segment primarily related to future growth potential of the business along with synergies we expect from the integration of the acquired stores. 48 Note 3: Inventories (Amounts in thousands) 4/25/2026 4/26/2025 Raw materials $ 126,274 $ 128,823 Work in process 17,037 19,280 Finished goods 119,287 153,796 FIFO inventories 262,598 301,899 Excess of FIFO over LIFO ( 44,153 ) ( 46,614 ) Total inventories $ 218,445 $ 255,285 Note 4: Assets Held for Sale Assets and liabilities are classified as held for sale when management commits to a plan to sell a disposal group and concludes that it meets all other relevant criteria in accordance with U.S. GAAP. Assets held for sale are measured at the lower of their carrying value or fair value less costs to sell and are no longer depreciated or amortized. Any loss resulting from the measurement is recognized in the period the held for sale criteria are met while gains are not recognized until the date of sale. Casegoods Wholesale Business During the second quarter of fiscal 2026, the Company committed to a plan to dispose a portion of our Casegoods wholesale business (the "Casegoods disposal group"). The Casegoods business currently operates within the Wholesale segment and the Casegoods disposal group does not meet the requirements to be classified as discontinued operations as the disposition of a portion of this business does not represent a strategic shift that will have a material effect on the Company’s operations and financial results. During the third quarter of fiscal 2026, we completed the sale of the Casegoods headquarters building and related fixed assets, resulting in a $ 3.9 million gain recorded in selling, general and administrative expense. Additionally, we recorded an impairment charge of $ 3.1 million in cost of sales to reduce inventory then classified as held for sale to its fair value on the upholstery portion of our Casegoods business which was subsequently sold during the fourth quarter of fiscal 2026 at its carrying value. Both the gain on sale and impairment charge were recorded in the Wholesale segment. The remaining assets and liabilities in the Casegoods disposal group met the criteria to be classified as held for sale as of April 25, 2026, as follows: (Amounts in thousands) 4/25/2026 Accounts receivable, net $ 2,413 Inventory 16,641 Intangible asset 1,155 Total assets held for sale $ 20,209 Other liabilities (1) $ 1,120 (1) Included in accounts payable and accrued expenses and other current liabilities on our consolidated balance sheet During the first quarter of fiscal 2027, we completed the sale of the remaining assets and liabilities in the Casegoods disposal group, resulting in an immaterial impact to the consolidated financial statements. Refer to Note 21, Subsequent Events, for further information. Retail Stores During the third quarter of fiscal 2026, the Company committed to a plan to sell and leaseback buildings and related fixed assets of four retail stores. During the fourth quarter of fiscal 2026, we completed the sale of these assets and recognized a gain of $ 7.6 million, in selling, general, and administrative expense within the Retail segment. 49 Note 5: Property, Plant and Equipment (Amounts in thousands) Estimated Useful Lives 4/25/2026 4/26/2025 Buildings and building fixtures 3 - 30 years $ 399,619 $ 380,206 Machinery and equipment 3 - 20 years 206,432 197,218 Information systems, hardware and software 3 - 10 years 107,064 102,658 Furniture and fixtures 3 - 10 years 36,508 32,212 Land improvements 3 - 30 years 29,844 29,884 Transportation equipment 3 - 6 years 18,401 19,115 Land N/A 30,727 28,336 Construction in progress N/A 26,757 24,442 855,352 814,071 Accumulated depreciation ( 498,635 ) ( 474,859 ) Net property, plant and equipment $ 356,717 $ 339,212 Depreciation expense for the fiscal years ended April 25, 2026, April 26, 2025, and April 27, 2024, was $ 46.5 million, $ 45.6 million, and $ 47.4 million, respectively. Note 6: Leases The Company leases real estate for retail stores, distribution centers, warehouses, manufacturing plants, showrooms and office space. We also have equipment leases for tractors/trailers, IT and office equipment, and vehicles. We determine if a contract contains a lease at inception based on our right to control the use of an identified asset and our right to obtain substantially all the economic benefits from the use of that identified asset. Most of our real estate leases include options to renew or terminate early. We assess these options to determine if we are reasonably certain of exercising these options based on all relevant economic and financial factors. Any options that meet these criteria are included in the lease term at lease commencement. Most of our leases do not have an interest rate implicit in the lease. As a result, for purposes of measuring our right of use ("ROU") lease asset and lease liability, we determine our incremental borrowing rate by applying a spread above the U.S. Treasury borrowing rates. If an interest rate is implicit in a lease, we will use that rate as the discount rate for that lease. Some of our leases contain variable rent payments based on a Consumer Price Index or percentage of sales. Due to the variable nature of these costs, they are not included in the measurement of the ROU lease asset and lease liability. Supplemental balance sheet information pertaining to our leases is as follows: (Amounts in thousands) 4/25/2026 4/26/2025 Operating leases ROU lease assets $ 518,687 $ 450,177 Lease liabilities, short-term 87,865 79,707 Lease liabilities, long-term 474,253 408,402 Finance leases ROU lease assets $ 2,039 $ 2,671 Lease liabilities, short-term 897 885 Lease liabilities, long-term 1,273 1,863 The ROU lease assets by segment are as follows: (Amounts in thousands) 4/25/2026 4/26/2025 Wholesale $ 113,928 $ 110,045 Retail 385,277 316,510 Corporate and Other 21,521 26,293 Total ROU lease assets $ 520,726 $ 452,848 50 The components of lease cost are as follows: Fiscal Year Ended (52 weeks) (52 weeks) (52 weeks) (Amounts in thousands) 4/25/2026 4/26/2025 4/27/2024 Operating lease cost $ 107,187 $ 97,261 $ 95,876 Finance lease cost 1,051 773 588 Short-term lease cost 1,379 2,644 1,899 Variable lease cost 412 274 271 Less: Sublease income ( 1,363 ) ( 380 ) ( 291 ) Total lease cost $ 108,666 $ 100,572 $ 98,343 The following tables present supplemental lease disclosures: Fiscal Year Ended (52 weeks) (52 weeks) 4/25/2026 4/26/2025 (Amounts in thousands) Operating Leases Finance Leases Operating Leases Finance Leases Cash paid for amounts included in the measurement of lease liabilities $ 107,645 $ 1,055 $ 99,128 $ 773 Lease liabilities arising from new ROU lease assets 151,922 302 81,927 1,608 4/25/2026 4/26/2025 (Amounts in thousands) Operating Leases Finance Leases Operating Leases Finance Leases Weighted-average remaining lease term (years) 6.9 3.2 6.8 3.6 Weighted-average discount rate 4.6 % 5.5 % 4.5 % 5.7 % The following table presents our maturity of lease liabilities: 4/25/2026 (Amounts in thousands) Operating Leases (1) Finance Leases Within one year $ 111,051 $ 988 After one year and within two years 103,529 529 After two years and within three years 97,268 438 After three years and within four years 85,210 345 After four years and within five years 73,030 48 After five years 187,697 — Total lease payments 657,785 2,348 Less: Interest 95,667 178 Total lease obligations $ 562,118 $ 2,170 (1) Excludes approximately $ 37.2 million in future lease payments for various operating leases commencing in a future period. Note 7: Goodwill and Other Intangible Assets We have goodwill on our consolidated balance sheet as follows: Reportable Segment/Unit Reporting Unit Related Acquisition Retail Segment Retail Independent La-Z-Boy Stores Corporate and Other Joybird Joybird We test 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 it may be impaired. Under US GAAP, we have the option to first assess qualitative factors in order to determine if it is more likely than not that the fair value of one of our reporting units is greater than its 51 carrying value ("Step 0"). If the qualitative assessment leads to a determination that the reporting unit’s fair value is less than its carrying value, or if we elect to bypass the qualitative assessment altogether, we are required to perform a quantitative impairment test ("Step 1") by calculating the fair value of the reporting unit and comparing the fair value with its associated carrying value. Step 0 Assessment During our fiscal 2026 annual impairment test, we first assessed goodwill recoverability qualitatively using the Step 0 approach for each of our reporting units. For our qualitative assessment, we considered the most recent quantitative analysis, which was performed during the fourth quarter of fiscal 2025 for the Joybird reporting unit and during the fourth quarter of fiscal 2020 for the Retail reporting unit, including assumptions used, such as discount rates and tax rates, indicated fair values, and the amounts by which those fair values exceeded their carrying amounts. Further, we compared actual performance in fiscal 2026, along with future financial projections to the internal financial projections used in the prior quantitative analyses. Additionally, we considered various other factors including macroeconomic conditions, relevant industry and market trends, and factors specific to the Company that could indicate a potential change in the fair value of our reporting units. Lastly, we evaluated whether any events have occurred or any circumstances have changed since that time that would indicate that our goodwill may have become impaired since our last quantitative tests. Based on these qualitative assessments, we determined that the quantitative Step 1 goodwill impairment test was necessary for the Joybird reporting unit. Additionally, while the results of our Step 0 assessment indicated that it is more likely than not that the fair value of our Retail reporting unit exceeded its carrying value, we elected to perform a quantitative Step 1 goodwill impairment test due to the business's continued growth and the length of time since the last required quantitative assessment. Step 1 Assessment Joybird Reporting Unit Due to limited headroom from the fiscal 2025 impairment testing and a decline in financial performance, we deemed it necessary to perform the quantitative Step 1 goodwill impairment test for the Jo ybird reporting unit. To estimate the fair value of this reporting unit, we applied a combination of the income approach and the market approach, weigh ted 75 % and 25 %, respectively. The income approach used discounted future cash flows in which sales and operating income projections were based on assumptions driven by current economic conditions and estimates over the foreseeable future and assumed a 2.0 % terminal growth rate. Other key assumptions used in the discounted future cash flow model were a discount rate o f 17.5 %, re flecting a market participant weighted average cost of capital assuming Joybird would be sold as a stand-alone business, and a tax rate o f 24.2 %, w hich was specific to the Joybird reporting unit. The market approach used the guideline public company method, which derives a valuation from market multiples based on revenue for comparable public companies and was adjusted for a control premium based on recent merger and acquisition transaction data of target companies similar to the Joybird reporting unit. Based on our testing, the carrying value of the Joybird reporting unit exceeded its fair value as of April 25, 2026 by approximately $ 20.0 million and we recorded a non-cash pre-tax impairment charge during the fourth quarter of fiscal 2026 to reduce the carrying value of the goodwill to $ 35.5 million. Additionally, changes to valuation inputs or failure to meet our forecasts, in particular our sales and operating income projections, could reduce the fair value of the Joybird reporting unit and thus increase the possibility that our goodwill may be further impaired in the future. Retail Reporting Unit Due to the extended time period from when we last performed a quantitative impairment test, we elected to perform a quantitative Step 1 goodwill impairment test for the Retail reporting unit. To estimate the fair value of this reporting unit, we applied the income approach using discounted future cash flows in which sales and operating income projections were based on assumptions driven by current economic conditions and estimates over the foreseeable future and assumed a 2.0 % terminal growth rate. Other key assumptions used in the discounted future cash flow model were a discount rate of 8.5 %, reflecting a market participant weighted average cost of capital, and a tax rate of 25.5 %, which was specific to the Retail reporting unit. Based on our testing, the fair value of the Retail reporting unit significantly exceeded its carrying value as of April 25, 2026 and no impairment was recorded. 52 The following table summarizes changes in the carrying amount of our goodwill by reportable segment: (Amounts in thousands) Wholesale Segment Retail Segment Corporate and Other Total Goodwill Balance at April 27, 2024 (1) $ 20,085 $ 138,922 $ 55,446 $ 214,453 Acquisitions — 11,269 — 11,269 Impairment charge ( 20,581 ) — — ( 20,581 ) Translation adjustment 496 ( 47 ) — 449 Balance at April 26, 2025 (1) — 150,144 55,446 205,590 Acquisitions — 57,631 — 57,631 Impairment charge — — ( 19,967 ) ( 19,967 ) Translation adjustment — 46 — 46 Balance at April 25, 2026 (1) $ — $ 207,821 $ 35,479 $ 243,300 (1) Includes $ 26.9 million of accumulated impairment losses in Corporate and Other. We have intangible assets on our consolidated balance sheet as follows: Reportable Segment Intangible Asset Useful Life Wholesale Segment American Drew ® trade name (1) Indefinite-lived Retail Segment Reacquired rights to own and operate La-Z-Boy Stores Indefinite-lived Corporate and Other Joybird ® trade name Amortizable over eight -year useful life (1) Reclassified to assets held for sale during the second quarter of fiscal 2026. Refer to Note 4, Assets Held for Sale, for further information. We test indefinite-lived intangible assets for impairment on an annual basis in the fourth quarter of our fiscal year, or more frequently if events or changes in circumstances indicate that the assets might be impaired. Similar to our goodwill testing, we used the qualitative Step 0 approach to assess if it was more likely than not that the fair values of our indefinite-lived intangible assets were greater than their carrying values. Based on the same qualitative factors outlined above, we determined that it is more likely than not that the fair value of each of our indefinite-lived intangible assets exceeded their respective carrying value. However, due to the length of time since a quantitative impairment test was last performed, we elected to perform a Step 1 quantitative impairment analysis for our indefinite-lived intangible assets in the Retail Segment. This analysis was conducted using the relief from royalty method and sales projections were based on assumptions driven by current economic conditions. Based on our testing, the fair values of the indefinite-lived intangible assets significantly exceeded their respective carrying values and as of April 25, 2026, no impairment was recorded. The following summarizes changes in our intangible assets: (Amounts in thousands) Indefinite-Lived Trade Names Finite-Lived Trade Name Indefinite-Lived Reacquired Rights Other Intangible Assets Total Intangible Assets Balance at April 27, 2024 $ 1,155 $ 1,796 $ 42,640 $ 1,660 $ 47,251 Acquisitions — — 6,404 — 6,404 Amortization — ( 798 ) — ( 222 ) ( 1,020 ) Impairment — — — ( 1,479 ) ( 1,479 ) Translation adjustment — — ( 36 ) 41 5 Balance at April 26, 2025 $ 1,155 $ 998 $ 49,008 $ — $ 51,161 Acquisitions — — 28,339 — 28,339 Amortization — ( 798 ) — — ( 798 ) Reclass to assets held for sale ( 1,155 ) — — — ( 1,155 ) Translation adjustment — — 35 — 35 Balance at April 25, 2026 $ — $ 200 $ 77,382 $ — $ 77,582 53 We test amortizable intangible assets for impairment if events or changes in circumstances indicate that the assets might be impaired. Given the immaterial size of our amortizable intangible assets, we did not perform any quantitative testing during fiscal 2026. For our amortizable intangible assets recorded as of April 25, 2026, we estimate amortization expense to be $ 0.2 million in fiscal 2027 with no amortization thereafter. Note 8: 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: (Amounts in thousands) 4/25/2026 4/26/2025 Short-term investments: Marketable securities $ 41 $ 10 Held-to-maturity investments 5,510 2,607 Total short-term investments 5,551 2,617 Long-term investments: Marketable securities 12,482 12,284 Total investments $ 18,033 $ 14,901 Investments to enhance returns on cash $ 5,510 $ 2,607 Investments to fund compensation/retirement plans 12,523 12,294 Total investments $ 18,033 $ 14,901 The following is a summary of the unrealized gains, unrealized losses, and fair value by investment type: 4/25/2026 4/26/2025 (Amounts in thousands) Gross Unrealized Gains Gross Unrealized Losses Fair Value Gross Unrealized Gains Gross Unrealized Losses Fair Value Equity securities $ 1,289 $ — $ 3,787 $ 618 $ — $ 3,489 Fixed income 161 ( 24 ) 6,163 114 ( 50 ) 6,335 Other 255 ( 92 ) 8,083 322 ( 15 ) 5,077 Total securities $ 1,705 $ ( 116 ) $ 18,033 $ 1,054 $ ( 65 ) $ 14,901 The following table summarizes sales of marketable securities: Fiscal Year Ended (52 weeks) (52 weeks) (52 weeks) (Amounts in thousands) 4/25/2026 4/26/2025 4/27/2024 Proceeds from sales $ 1,751 $ 11,994 $ 23,328 Gross realized gains 379 559 1,967 Gross realized losses ( 2 ) ( 40 ) ( 768 ) As of April 25, 2026, we held $ 6.2 million of fixed income marketable securities, classified as available-for-sale securities, all of which do not have a single contractual maturity date. 54 Table of Contents Note 9: Accrued Expenses and Other Liabilities (Amounts in thousands) 4/25/2026 4/26/2025 Payroll and other compensation $ 65,877 $ 65,311 Accrued product warranty, current portion 17,043 22,357 Customer deposits 77,907 72,894 Deferred revenue 34,907 32,580 Other current liabilities 43,524 51,073 Accrued expenses and other current liabilities $ 239,258 $ 244,215 Note 10: 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 April 25, 2026, we have no borrowings outstanding under the Credit Facility and we were in compliance with our financial covenants under the Credit Facility. Cash paid for interest was $ 0.4 million during fiscal years 2026, 2025, and 2024. Note 11: Employee Benefits The table below summarizes the total costs associated with our employee benefit plans. Fiscal Year Ended (52 weeks) (52 weeks) (52 weeks) (Amounts in thousands) 4/25/2026 4/26/2025 4/27/2024 401(k) Retirement Plan $ 17,247 $ 16,482 $ 14,698 Performance Compensation Retirement Plan (1) 439 497 ( 133 ) Deferred Compensation Plan (2) ( 187 ) ( 276 ) ( 86 ) Non-Qualified Defined Benefit Retirement Plan (3) 673 678 737 (1) Performance Compensation Retirement Plan includes forfeitures. (2) Includes (gain)/loss on investments held to fund compensation/retirement plans and administrative fees. (3) Primarily related to interest cost. 401(k) Retirement Plan . Voluntary 401(k) retirement plans are offered to eligible employees within certain U.S. operating units. For most operating units, we make matching contributions based on specific formulas. 55 Performance Compensation Retirement Plan. A performance compensation retirement plan ("PCRP") is maintained for eligible highly compensated employees. Beginning in fiscal 2023, contributions into the plan are no longer being made. Prior year contributions were based on achievement of performance targets. Employees vest in these prior period contributions if they achieve certain age and years of service with the Company and can elect to receive benefit payments over a period ranging between five to twenty years after they leave the Company. While the Company no longer makes contributions, the outstanding liability balance related to the plan is as follows: (Amounts in thousands) 4/25/2026 4/26/2025 Short-term obligation included in other current liabilities $ 1,284 $ 2,238 Long-term obligation included in other long-term liabilities 6,341 7,280 Executive Deferred Compensation Plan. We maintain an executive deferred compensation plan for eligible highly compensated employees, an element of which may include Company contributions. Further information related to the plan is as follows: (Amounts in thousands) 4/25/2026 4/26/2025 Plan obligation included in other long-term liabilities $ 19,799 $ 20,607 Cash surrender value on life insurance contracts included in other long-term assets (1) 47,575 44,925 (1) Life insurance contracts are related to the Executive Deferred Compensation Plan and the PCRP. Non-Qualified Defined Benefit Retirement Plan. We maintain a non-qualified defined benefit retirement plan for certain former salaried employees. We hold available-for-sale marketable securities to fund future obligations of this plan in a Rabbi trust (refer to Note 8, Investments, and Note 20, Fair Value Measurements, for additional information on these investments). We are not required to fund the non-qualified defined benefit retirement plan in fiscal 2027; however, we have the discretion to make contributions to the Rabbi trust. Further information related to the plan is as follows: (Amounts in thousands) 4/25/2026 4/26/2025 Short-term plan obligation included in other current liabilities $ 984 $ 995 Long-term plan obligation included in other long-term liabilities 9,669 10,107 Discount rate used to determine obligation 5.4 % 5.4 % Fiscal Year Ended (52 weeks) (52 weeks) (52 weeks) (Amounts in thousands) 4/25/2026 4/26/2025 4/27/2024 Actuarial loss recognized in AOCI $ 101 $ 83 $ 124 Benefit payments (1) 1,031 946 1,041 (1) Benefit payments are scheduled to be between $ 0.9 million and $ 1.0 million annually for the next 10 years. Note 12: Product Warranties We account for product warranties by accruing an estimated liability when we recognize revenue on the sale of warrantied product. We estimate future warranty claims on product sales based on sales volume and claim experience and periodically make adjustments to reflect changes in actual experience. We incorporate repair costs in our liability estimates, including materials, labor, and overhead amounts necessary to perform repairs, and any costs associated with delivering repaired product to our customers and consumers. Approximately 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 record differences between our estimated and actual costs when the differences are known. 56 A reconciliation of the changes in our product warranty liability is as follows: (Amounts in thousands) 4/25/2026 4/26/2025 Balance as of the beginning of the year $ 29,940 $ 28,909 Accruals during the year 28,099 34,336 Settlements during the year ( 27,722 ) ( 33,305 ) Change in warranty policy (1) ( 5,606 ) — Balance as of the end of the year (2) $ 24,711 $ 29,940 (1) During the second quarter of fiscal 2026, we implemented a change in which dealers are provided an upfront service allowance for certain labor and delivery costs that they cover under our Wholesale warranty program. As part of this change, dealers provide these warranty services on La-Z-Boy products that they sell, and have previously sold, resulting in an overall reduction in our warranty liability. (2) $ 17.0 million and $ 22.4 million is recorded in accrued expenses and other current liabilities as of April 25, 2026 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 13: Commitments and Contingencies We have been named as a defendant in various lawsuits arising in the ordinary course of business and as a potentially responsible party at certain environmental clean-up sites, the effect of which are not considered significant. Based on a review of all currently known facts and our experience with previous legal and environmental matters, we have recorded expense in respect of probable and reasonably estimable losses arising from legal matters, and we currently do not believe it is probable that we will have any additional loss for legal or environmental matters that would be material to our consolidated financial statements. In view of the inherent difficulty of predicting the outcome of litigation, particularly where the claimants seek very large or indeterminate damages or where the matters present novel legal theories, we generally cannot predict the eventual outcome, timing, or related loss, if any, of pending matters. Note 14: Stock-Based Compensation In fiscal 2025, our shareholders approved the La-Z-Boy Incorporated 2024 Omnibus Incentive Plan which provides for the grant of stock options, stock appreciation rights, restricted stock and restricted stock units, unrestricted stock, performance awards, dividend equivalent rights, and short-term cash incentive awards. Under this plan, the aggregate number of common shares that may be issued through awards of any form is 3.1 million shares, reduced by the number of shares subject to awards granted under the La-Z-Boy Incorporated 2022 Omnibus Incentive Plan after April 27, 2024 and prior to the Annual Meeting of Shareholders of La-Z-Boy Incorporated held on August 27, 2024. 57 The table below summarizes the total stock-based compensation expense we recognized for all outstanding grants. Stock-based compensation expense is recorded in SG&A expense in the consolidated statement of income: Fiscal Year Ended (52 weeks) (52 weeks) (52 weeks) (Amounts in thousands) 4/25/2026 4/26/2025 4/27/2024 Equity-based awards expense Restricted stock $ 8,389 $ 8,897 $ 6,959 Performance-based shares 5,836 6,276 5,109 Stock options 286 924 1,257 Restricted stock units issued to Directors 1,177 1,303 1,101 Total equity-based awards expense 15,688 17,400 14,426 Liability-based awards expense (1) ( 54 ) 91 152 Total stock-based compensation expense $ 15,634 $ 17,491 $ 14,578 (1) Includes 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 . We granted 265,009 shares of restricted stock units to employees during fiscal 2026 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 fiscal 2026, fiscal 2025 and fiscal 2024 was $ 38.23 , $ 38.17 and $ 27.68 per share, respectively, the market value of our common shares on the date of grant. The following table summarizes information about non-vested awards as of and for the year ended April 25, 2026: Shares or Units (In Thousands) Weighted Average Grant Date Fair Value Non-vested awards at April 26, 2025 607 $ 32.25 Granted 265 38.23 Vested ( 212 ) 30.66 Canceled ( 60 ) 34.63 Non-vested awards at April 25, 2026 600 34.54 Unrecognized compensation cost related to non-vested restricted shares was $ 7.5 million and is expected to be recognized over a weighted-average remaining contractual term of all unvested awards of 1.7 years. Performance Shares. Under the La-Z-Boy Incorporated 2024 Omnibus Incentive Plan, the Compensation and Talent Oversight Committee of our board of directors is authorized to award common shares to certain employees based on the attainment of certain financial goals over a given performance period. The awards are offered at no cost to the employees. In the event of an employee's termination during the vesting period, the potential right to earn shares under this program is generally forfeited. During the first quarter of fiscal 2026, we granted 182,671 performance-based shares, and we also have performance-based share awards outstanding from grants in fiscal 2025 and fiscal 2024. Payout of these grants depends 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 58 target award based on the attainment of certain financial and shareholder-return goals over a specific performance period, which is generally three fiscal years. The number of awards that will vest, as well as unearned and canceled awards, depend on the achievement of certain financial and shareholder-return goals over the three-year performance periods, and will be settled in shares if service conditions are met, requiring employees to remain employed with the Company through the end of the three-year performance periods. The following table summarizes the performance-based shares outstanding at the maximum award amounts based upon the respective performance share agreements: Shares (In Thousands) Weighted Average Grant Date Fair Value Outstanding shares at April 26, 2025 878 $ 27.77 Granted 365 35.62 Vested ( 269 ) 22.43 Unearned or canceled ( 234 ) 29.98 Outstanding shares at April 25, 2026 740 32.89 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. 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 expected performance ranking relative to our peer group. We expense compensation cost over the vesting period regardless of whether the market condition is ultimately satisfied. The fair value of each performance-based share that we granted during fiscal 2026, 2025, and 2024 was as follows: Grant Year Vesting based on: Fiscal 2026 Fiscal 2025 Fiscal 2024 Performance goals (1) $ 35.62 $ 35.59 $ 25.48 Market conditions (2) $ 52.91 $ 54.67 $ 34.15 (1) Represents 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 (2) Based on Monte Carlo valuation model Our unrecognized compensation cost at April 25, 2026, related to performance-based shares was $ 7.8 million based on the current estimates of the number of awards that will vest, and is expected to be recognized over a weighted-average remaining contractual term of all unvested awards of 1.7 years. Equity-based compensation expenses related to performance-based shares recognized in our consolidated statement of income are as follows: Fiscal Year Ended (52 weeks) (52 weeks) (52 weeks) (Amounts in thousands) 4/25/2026 4/26/2025 4/27/2024 Fiscal 2022 grant $ — $ — $ 1,379 Fiscal 2023 grant — 2,194 1,867 Fiscal 2024 grant 1,551 2,018 1,863 Fiscal 2025 grant 2,071 2,064 — Fiscal 2026 grant 2,214 — — Total expense $ 5,836 $ 6,276 $ 5,109 59 Stock Options. We did not grant stock options to employees during fiscal 2026, 2025, or 2024, 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. Plan activity for stock options under the above plans was as follows: Number of Shares (In Thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (In Thousands) Outstanding at April 26, 2025 633 $ 29.91 5.9 $ 5,728 Granted — — N/A N/A Canceled ( 20 ) 36.59 N/A N/A Exercised ( 58 ) 29.34 N/A 523 Outstanding at April 25, 2026 555 29.73 5.0 3,545 Exercisable at April 25, 2026 500 $ 30.30 4.9 $ 2,944 The aggregate intrinsic value of options exercised was $ 5.0 million and $ 4.2 million in fiscal 2025 and fiscal 2024, respectively. As of April 25, 2026, our total unrecognized compensation cost related to non-vested stock option awards was less than $ 0.1 million, which we expect to recognize over a weighted-average remaining vesting term of all unvested awards of 0.2 years. During the year ended April 25, 2026, stock options with respect to 0.1 million shares vested. We received $ 1.7 million, $ 15.3 million, and $ 13.0 million in cash during fiscal 2026, 2025, and 2024, respectively, for exercises of stock options. Restricted Stock Units Issued to Directors. Restricted stock units granted to our non-employee directors are offered at no cost to the directors and restricted stock units granted following August 2022 vest on the earlier of the date a director ceases to be a member of the board (for any reason other than the termination of service for cause) or the one-year anniversary of the grant date. During fiscal 2026, we granted 31,672 restricted stock units to our non-employee directors. We account for these restricted stock units as equity-based awards because when they vest, they will be settled in shares of our common stock. We measure and recognize compensation expense for these awards based on the market price of our common shares on the date of grant. The weighted-average fair value of the restricted stock units that were granted during fiscal 2026, fiscal 2025, and fiscal 2024 was $ 37.14 , $ 40.24 , and $ 30.80 , respectively. 60 Note 15: Accumulated Other Comprehensive Loss Activity in accumulated other comprehensive loss was as follows: (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 29, 2023 $ ( 2,652 ) $ ( 145 ) $ ( 2,731 ) $ ( 5,528 ) Changes before reclassifications ( 1,152 ) 189 432 ( 531 ) Amounts reclassified to net income — 331 124 455 Tax effect — ( 129 ) ( 137 ) ( 266 ) Other comprehensive income (loss) attributable to La-Z-Boy Incorporated ( 1,152 ) 391 419 ( 342 ) Balance at April 27, 2024 $ ( 3,804 ) $ 246 $ ( 2,312 ) $ ( 5,870 ) Changes before reclassifications 2,297 132 ( 205 ) 2,224 Amounts reclassified to net income — ( 11 ) 83 72 Tax effect — ( 30 ) 30 — Other comprehensive income (loss) attributable to La-Z-Boy Incorporated 2,297 91 ( 92 ) 2,296 Balance at April 26, 2025 $ ( 1,507 ) $ 337 $ ( 2,404 ) $ ( 3,574 ) Changes before reclassifications 3,137 90 ( 9 ) 3,218 Amounts reclassified to net income ( 1,213 ) ( 18 ) 101 ( 1,130 ) Tax effect — ( 18 ) ( 23 ) ( 41 ) Other comprehensive income (loss) attributable to La-Z-Boy Incorporated 1,924 54 69 2,047 Balance at April 25, 2026 $ 417 $ 391 $ ( 2,335 ) $ ( 1,527 ) We reclassified the foreign currency translation adjustment, 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: Fiscal Year Ended (52 weeks) (52 weeks) (52 weeks) (Amounts in thousands) 4/25/2026 4/26/2025 4/27/2024 Balance as of the beginning of the year $ 11,353 $ 10,296 $ 10,261 Net income 926 1,396 2,010 Other comprehensive income (loss) 398 1,075 ( 803 ) Dividends distributed to joint venture minority partners — ( 1,414 ) ( 1,172 ) Balance as of the end of the year $ 12,677 $ 11,353 $ 10,296 61 Note 16: Revenue Recognition The following table presents our revenue disaggregated by product category and by segment or unit: Year Ended April 25, 2026 (Amounts in thousands) Wholesale Retail Corporate and Other Total Upholstered Furniture $ 1,149,011 $ 775,345 $ 110,739 $ 2,035,095 Casegoods Furniture 67,010 51,159 6,668 124,837 Delivery 158,895 31,154 8,297 198,346 Other (1) 107,296 93,029 18,046 218,371 Total $ 1,482,212 $ 950,687 $ 143,750 $ 2,576,649 Eliminations ( 450,014 ) Consolidated Net Sales $ 2,126,635 Year Ended April 26, 2025 (Amounts in thousands) Wholesale Retail Corporate and Other Total Upholstered Furniture $ 1,171,445 $ 731,254 $ 121,972 $ 2,024,671 Casegoods Furniture 72,041 50,635 9,191 131,867 Delivery 166,244 33,502 8,403 208,149 Other (1) 70,089 82,979 20,909 173,977 Total $ 1,479,819 $ 898,370 $ 160,475 $ 2,538,664 Eliminations ( 429,457 ) Consolidated Net Sales $ 2,109,207 (1) Primarily includes tariff and other surcharges, revenue for advertising, royalties, parts, accessories, after-treatment products, surcharges, rebates and other sales incentives. Upholstered Furniture - Includes revenue for upholstered furniture, such as recliners, sofas, loveseats, chairs, sectionals, modulars, and ottomans. This revenue includes sales to La-Z-Boy 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 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. 62 The following table presents our contract assets and liabilities: (Unaudited, amounts in thousands) 4/25/2026 4/26/2025 Contract assets $ 34,907 $ 32,580 Customer deposits $ 77,907 $ 72,894 Deferred revenue 34,907 32,580 Total contract liabilities (1) $ 112,814 $ 105,474 (1) During the year ended April 25, 2026, we recognized revenue of $ 101.1 million related to our contract liability balance at April 26, 2025. Note 17: 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 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 230 company-owned La-Z-Boy Stores. The Retail segment sells primarily upholstered furniture, in addition to some casegoods and other home furnishing 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, through small-format stores in key markets, and through other distribution channels. 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 Note 1, Accounting Policies. 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. 63 The following table presents sales and operating income (loss) by segment: Year Ended April 25, 2026 (Amounts in thousands) Wholesale Retail Corporate & Other Intersegment Eliminations Consolidated Sales to external customers $ 1,038,789 $ 950,687 $ 137,159 $ — $ 2,126,635 Intersegment sales 443,423 — 6,591 ( 450,014 ) — Total sales 1,482,212 950,687 143,750 ( 450,014 ) 2,126,635 Cost of sales 1,102,333 418,462 65,421 ( 396,182 ) 1,190,034 Gross profit 379,879 532,225 78,329 ( 53,832 ) 936,601 SG&A expenses 269,690 423,741 147,828 ( 53,832 ) 787,427 Goodwill impairment — — 19,967 — 19,967 Operating income (loss) $ 110,189 $ 108,484 $ ( 89,466 ) $ — $ 129,207 Interest expense ( 524 ) Interest income 11,880 Other income (expense), net ( 1,758 ) Income before income taxes $ 138,805 Year Ended April 26, 2025 (Amounts in thousands) Wholesale Retail Corporate & Other Intersegment Eliminations Consolidated Sales to external customers $ 1,056,914 $ 898,370 $ 153,923 $ — $ 2,109,207 Intersegment sales 422,905 — 6,552 ( 429,457 ) — Total sales 1,479,819 898,370 160,475 ( 429,457 ) 2,109,207 Cost of sales 1,093,828 399,038 67,540 ( 377,617 ) 1,182,789 Gross profit 385,991 499,332 92,935 ( 51,840 ) 926,418 SG&A expenses 283,197 393,915 144,728 ( 51,840 ) 770,000 Goodwill impairment $ 20,581 $ — $ — $ — $ 20,581 Operating income (loss) $ 82,213 $ 105,417 $ ( 51,793 ) $ — $ 135,837 Interest expense ( 545 ) Interest income 14,877 Other income (expense), net ( 3,035 ) Income before income taxes $ 147,134 Year Ended April 27, 2024 (Amounts in thousands) Wholesale Retail Corporate & Other Intersegment Eliminations Consolidated Sales to external customers $ 1,048,431 $ 855,126 $ 143,470 $ — $ 2,047,027 Intersegment sales 398,847 — 10,299 ( 409,146 ) — Total sales 1,447,278 855,126 153,769 ( 409,146 ) 2,047,027 Cost of sales 1,073,251 380,520 72,626 ( 361,040 ) 1,165,357 Gross profit 374,027 474,606 81,143 ( 48,106 ) 881,670 SG&A expenses 274,654 362,924 141,402 ( 48,106 ) 730,874 Operating income (loss) $ 99,373 $ 111,682 $ ( 60,259 ) $ — $ 150,796 Interest expense ( 455 ) Interest income 15,482 Other income (expense), net ( 71 ) Income before income taxes $ 165,752 64 The following tables present additional financial information by segment and location. Fiscal Year Ended (52 weeks) (52 weeks) (52 weeks) (Amounts in thousands) 4/25/2026 4/26/2025 4/27/2024 Depreciation and Amortization Wholesale segment $ 26,398 $ 26,309 $ 28,189 Retail segment 13,853 11,198 9,632 Corporate and Other 7,189 9,160 10,731 Consolidated depreciation and amortization $ 47,440 $ 46,667 $ 48,552 Capital Expenditures Wholesale segment $ 31,159 $ 31,333 $ 30,854 Retail segment 39,046 36,915 18,502 Corporate and Other 6,101 6,032 4,195 Consolidated capital expenditures $ 76,306 $ 74,280 $ 53,551 Sales by Country (1) United States 91 % 91 % 90 % Canada 5 % 6 % 6 % Other 4 % 3 % 4 % Total 100 % 100 % 100 % (1) Sales are attributed to countries on the basis of the customer's location. (Amounts in thousands) 4/25/2026 4/26/2025 Assets Wholesale segment $ 643,556 $ 662,987 Retail segment 903,688 727,178 Unallocated assets 495,091 531,997 Consolidated assets $ 2,042,335 $ 1,922,162 Long-Lived Assets by Geographic Location Domestic $ 1,125,507 $ 976,220 International 72,818 72,591 Consolidated long-lived assets $ 1,198,325 $ 1,048,811 Note 18: Income Taxes Income before income taxes consists of the following: Fiscal Year Ended (52 weeks) (52 weeks) (52 weeks) (Amounts in thousands) 4/25/2026 4/26/2025 4/27/2024 United States $ 136,363 $ 160,472 $ 145,854 Foreign 2,442 ( 13,338 ) 19,898 Total $ 138,805 $ 147,134 $ 165,752 65 Income tax expense (benefit) consists of the following components: Fiscal Year Ended (52 weeks) (52 weeks) (52 weeks) (Amounts in thousands) 4/25/2026 4/26/2025 4/27/2024 Federal Current $ 7,844 $ 28,002 $ 29,637 Deferred 16,712 2,197 ( 1,529 ) State Current 5,803 8,807 9,823 Deferred 1,798 578 ( 318 ) Foreign Current 3,930 4,280 4,534 Deferred ( 193 ) 2,318 ( 1,031 ) Total income tax expense $ 35,894 $ 46,182 $ 41,116 Our effective tax rate differs from the U.S. federal income tax rate for the following reasons: Fiscal Year Ended (52 weeks) 4/25/2026 (Amounts in thousands) Amount Percentage US Federal Statutory Tax Rate $ 29,086 21.0 % Domestic State and Local Income Taxes, net of Federal Benefit (1) 6,035 4.3 % Foreign Tax Effects United Kingdom Nondeductible operating losses 2,752 2.0 % Other ( 272 ) ( 0.2 ) % Other foreign jurisdictions 1,081 0.8 % Effects of Cross-Border Transactions ( 1,095 ) ( 0.8 ) % Tax Credits ( 726 ) ( 0.5 ) % Nontaxable or Nondeductible Items Nondeductible asset impairment 4,193 3.0 % Nondeductible executive compensation 1,611 1.2 % Other ( 307 ) ( 0.2 ) % Changes in Unrecognized Tax Benefits 167 0.1 % Other Adjustments US federal tax effects of United Kingdom plant closure ( 5,851 ) ( 4.2 ) % Other ( 780 ) ( 0.6 ) % Effective Tax Rate $ 35,894 25.9 % (1) The domestic state jurisdictions that make up greater than 50% of the total effect of this category include CA, PA, IL, MI, MD, VA, WI, and NY. 66 Fiscal Year Ended (52 weeks) (52 weeks) (% of income before income taxes) 4/26/2025 4/27/2024 Statutory tax rate 21.0 % 21.0 % Increase (reduction) in income taxes resulting from: State income taxes, net of federal benefit 5.1 % 4.3 % Change in valuation allowance 1.8 % — % Non-deductible asset impairment 3.5 % — % Foreign rate differences 1.2 % ( 0.2 ) % Miscellaneous items ( 1.2 ) % ( 0.3 ) % Effective tax rate 31.4 % 24.8 % For our Canada and Mexico foreign operating units, we permanently reinvest the earnings and consequently do not record a deferred tax liability relative to the undistributed earnings. The Company is not permanently reinvested on undistributed earnings for its Thailand and United Kingdom foreign operating units and has provided for deferred tax attributable to those earnings of approximately $ 1.4 million as of the end of fiscal 2026. The primary components of our deferred tax assets and (liabilities) were as follows: (Amounts in thousands) 4/25/2026 4/26/2025 Assets Leases $ 142,209 $ 123,764 Deferred and other compensation 14,570 15,533 State income tax—net operating losses, credits and other 6,537 4,718 Warranty 5,890 7,247 Workers' compensation 1,982 1,962 Bad debt 1,535 1,516 Employee benefits 2,202 2,611 Federal and foreign net operating losses, credits 947 2,613 Other — 1,999 Valuation allowance ( 2,388 ) ( 4,055 ) Total deferred tax assets 173,484 157,908 Liabilities Right of use lease assets ( 132,402 ) ( 114,705 ) Property, plant and equipment ( 26,973 ) ( 14,795 ) Inventory ( 2,597 ) ( 2,899 ) Goodwill and other intangibles ( 23,757 ) ( 19,986 ) Tax on undistributed foreign earnings ( 1,425 ) ( 1,194 ) Other ( 309 ) — Net deferred tax assets (liabilities) $ ( 13,979 ) $ 4,329 The deferred tax assets associated with loss carry forwards and the related expiration dates are as follows: (Amounts in thousands) Amount Expiration Various U.S. state net operating losses (excluding federal tax effect) $ 2,162 Fiscal 2027-2041 Foreign capital losses 17 Indefinite Foreign net operating losses 930 Indefinite 67 We evaluate our deferred taxes to determine if a valuation allowance is required. Accounting standards require that we assess whether a valuation allowance should be established based on the consideration of all available evidence using a "more likely than not" standard with significant weight being given to evidence that can be objectively verified. The evaluation of the amount of net deferred tax assets expected to be realized necessarily involves forecasting the amount of taxable income that will be generated in future years. We have forecasted future results using estimates management believes to be reasonable. We based these estimates on objective evidence such as expected trends resulting from certain leading economic indicators. The realization of deferred income tax assets is dependent on future events and actual results may vary from management's forecasts due to economic volatility and uncertainty along with unpredictable complexities in the global supply chain. Such variances could result in adjustments to the valuation allowance on deferred tax assets in future periods, and such adjustments could be material to the financial statements. A summary of the valuation allowance by jurisdiction is as follows: (Amounts in thousands) 4/25/2026 4/26/2025 Change U.S. State $ 1,621 $ 1,449 $ 172 Foreign 767 2,606 ( 1,839 ) Total $ 2,388 $ 4,055 $ ( 1,667 ) The remaining valuation allowance of $ 2.4 million is related to certain U.S. state and foreign deferred tax assets. The U.S. state deferred taxes are primarily related to state net operating losses and state tax credits. The foreign deferred taxes are primarily related to net operating losses. As of April 25, 2026, we had a gross unrecognized tax benefit of $ 1.2 million related to uncertain tax positions in various jurisdictions. A reconciliation of the beginning and ending balance of these unrecognized tax benefits is as follows: Fiscal Year Ended (52 weeks) (52 weeks) (52 weeks) (Amounts in thousands) 4/25/2026 4/26/2025 4/27/2024 Balance at the beginning of the period $ 1,062 $ 1,175 $ 1,084 Additions: Positions taken during the current year 273 100 168 Positions taken during the prior year 27 — 50 Reductions: Positions taken during the prior year — ( 56 ) — Reductions resulting from the lapse of the statute of limitations ( 148 ) ( 157 ) ( 127 ) Balance at the end of the period $ 1,214 $ 1,062 $ 1,175 We recognize interest and penalties associated with uncertain tax positions in income tax expense. We had approximately $ 0.5 million accrued for interest and penalties as of April 25, 2026 and April 26, 2025. If recognized, $ 1.0 million of the total $ 1.2 million of unrecognized tax benefits would decrease our effective tax rate. The remaining balance will be settled or released as tax audits are effectively settled, statutes of limitation expire, or other new information becomes available. Our U.S. federal income tax returns for fiscal years 2023 and subsequent years are still subject to audit. In addition, we conduct business in various states. The major states in which we conduct business are subject to audit for fiscal years 2022 and subsequent years. Our foreign operations are subject to audit for fiscal years 2016 and subsequent years. 68 Cash paid for taxes (net of refunds received) during fiscal year ended April 25, 2026 were as follows: Fiscal Year Ended (52 weeks) (Amounts in thousands) 4/25/2026 U.S Federal $ 21,424 U.S. State 6,365 Mexico 2,301 Other Foreign 328 Total cash paid for taxes (net of refunds received) $ 30,418 Cash paid for taxes (net of refunds received) during the fiscal years ended April 26, 2025, and April 27, 2024, was $ 43.8 million, and $ 34.2 million, respectively. Note 19: 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: Fiscal Year Ended (52 weeks) (52 weeks) (52 weeks) (Amounts in thousands) 4/25/2026 4/26/2025 4/27/2024 Numerator (basic and diluted): Net income attributable to La-Z-Boy Incorporated $ 101,985 $ 99,556 $ 122,626 Denominator: Basic weighted average common shares outstanding 40,982 41,601 42,878 Contingent common shares 246 562 279 Stock option dilution 113 182 123 Diluted weighted average common shares outstanding 41,341 42,345 43,280 Earnings per Share: Basic $ 2.49 $ 2.39 $ 2.86 Diluted (1) $ 2.47 $ 2.35 $ 2.83 (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. We excluded options to purchase 0.2 million shares and 0.5 million shares from the diluted share calculation for the years ended April 25, 2026 and April 27, 2024, respectively. We did not exclude any outstanding options from the diluted share calculation for the fiscal year ended April 26, 2025. Note 20: 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. 69 • 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 April 25, 2026 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. At April 25, 2026 Fair Value Measurements (Amounts in thousands) Level 1 Level 2 Level 3 NAV (1) Total Assets Marketable securities $ — $ 2,573 $ — $ 9,950 $ 12,523 Held-to-maturity investments 5,510 — — — 5,510 Total assets $ 5,510 $ 2,573 $ — $ 9,950 $ 18,033 At April 26, 2025 Fair Value Measurements (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 April 25, 2026 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. Note 21: Subsequent Events Business Realignment On May 29, 2026, we completed the sale of the remaining assets held for sale within the Casegoods disposal group as described in Note 4, Assets Held for Sale, which includes the Kincaid ® and American Drew ® wholesale businesses. The terms of the final purchase agreement are consistent with amounts recognized in the financial statements as of April 25, 2026 and therefore we expect this transaction to have an immaterial impact on our consolidated financial statements during the first quarter of fiscal 2027. The sale of this business does not meet the requirements to be classified as discontinued operations as the disposition does not represent a strategic shift that will have a material effect on the Company’s operations and financial results. Supply Chain Optimization During the first quarter of fiscal 2027, we announced the planned closure of our leased upholstery assembly plant in San Luis Rio Colorado, Mexico, with operations expected to cease by the end of the first quarter of fiscal 2027. Additionally, we announced the planned closure of our leased Joybird manufacturing plant in Tijuana, Mexico, with all manufacturing operations 70 expected to transfer to our U.S. plants by the end of fiscal 2027. We have evaluated the implications of these actions on the consolidated financial statements as of April 25, 2026 and concluded that these events do not require recognition in fiscal 2026. The financial impact of these actions will primarily be recognized during fiscal 2027. Share Repurchase Authorization In April 2026, our board of directors rescinded the remaining repurchase authorization as of May 14, 2026, and established a new stock repurchase program, effective as of May 14, 2026, authorizing the repurchase of up to $ 300 million of Company stock. The new authorization does not have an expiration date. 71 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None.