MONROE, Mich. — La-Z-Boy Inc.’s earnings call following the release of its third-quarter results for 2023 yielded some insights into the company’s go-to strategy for the upcoming year. Here are three key highlights from the call:
La-Z-Boy closed one of its manufacturing facilities in Torreón, Mexico, as part of cost-cutting efforts to insulate against recessionary trends, according to the company. The facility was opened during the pandemic to deal with a huge spike in demand for La-Z-Boy products.
President and CEO Melinda D. Whittington noted that, at that time, La-Z-Boy opened three greenfield manufacturing locations in Mexico and added manufacturing operations at its cut and sew facility in Ramos, Mexico, to service the then nine-month backlog.
“Torreón was the last and smallest facility to come online and accounted for only 3% of the La-Z-Boy branded production. With efficiencies gained at our larger Mexico based operations, we are now able to shift Torreón production to other locations,” said Whittington.
La-Z-Boy is providing comprehensive transition packages to support ex-employees during this time, according to Whittington.
La-Z-Boy continued retail expansion
As part of the company’s push for market share at retail, during the third quarter, La-Z-Boy acquired the Barboursville, W.Va., La-Z-Boy Furniture Gallery, signed an agreement to acquire an additional independent dealer-owned store in Baton Rouge, La., and opened the company’s first outlet in Columbus, Ohio. The company announced plans to open a second outlet in the Chicago market this spring.
La-Z-Boy leadership noted that in this fiscal year, it added five new stores in addition to buying eight stores from independent dealers and remodeled or relocated 16 additional stores.
For the company’s Joybird business, which it acquired in July 2018, La-Z-Boy is committed to returning Joybird to profitable growth. This quarter, Joybird’s sales were down 21% vs. last year’s third quarter, reflecting challenging traffic trends similar to those experienced across online home furnishing brands, noted Whittington. Citing Joybird’s status as a smaller, newer business with fewer retail locations, the company is expecting Joybird to post a loss for the full fiscal year.
La-Z-Boy continues to focus on expanding Joybird’s physical locations. During the most recent third quarter, the company opened a seventh Joybird store in Manhattan and plans to open three additional stores by the summer in Seattle, Philadelphia and a second store planned for Los Angeles.