Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jan. 25, 2020 | Feb. 11, 2020 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jan. 25, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-9656 | |
Entity Registrant Name | LA-Z-BOY INCORPORATED | |
Entity Incorporation, State or Country Code | MI | |
Entity Tax Identification Number | 38-0751137 | |
Entity Address, Address Line One | One La-Z-Boy Drive, | |
Entity Address, City or Town | Monroe, | |
Entity Address, State or Province | MI | |
Entity Address, Postal Zip Code | 48162-5138 | |
City Area Code | 734 | |
Local Phone Number | 242-144 | |
Title of 12(b) Security | Common Stock, $1.00 Par Value | |
Trading Symbol | LZB | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 46,032,716 | |
Entity Central Index Key | 0000057131 | |
Current Fiscal Year End Date | --04-27 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED STATEMENT OF INCOM
CONSOLIDATED STATEMENT OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jan. 25, 2020 | Jan. 26, 2019 | Jan. 25, 2020 | Jan. 26, 2019 | |
Income Statement [Abstract] | ||||
Sales | $ 475,856 | $ 467,582 | $ 1,336,701 | $ 1,291,610 |
Cost of sales | 276,218 | 277,712 | 786,962 | 778,813 |
Gross profit | 199,638 | 189,870 | 549,739 | 512,797 |
Selling, general and administrative expense | 147,325 | 149,027 | 444,403 | 420,294 |
Operating income | 52,313 | 40,843 | 105,336 | 92,503 |
Interest expense | (265) | (538) | (891) | (1,143) |
Interest income | 844 | 540 | 2,093 | 1,534 |
Other expense, net | (5,998) | (941) | (5,390) | (2,046) |
Income before income taxes | 46,894 | 39,904 | 101,148 | 90,848 |
Income tax expense | 12,178 | 10,730 | 25,540 | 22,374 |
Net income | 34,716 | 29,174 | 75,608 | 68,474 |
Net income attributable to noncontrolling interests | (204) | (443) | (434) | (1,428) |
Net income attributable to La-Z-Boy Incorporated | $ 34,512 | $ 28,731 | $ 75,174 | $ 67,046 |
Basic weighted average common shares (in shares) | 46,262 | 46,820 | 46,545 | 46,808 |
Basic net income attributable to La-Z-Boy Incorporated per share (in dollars per share) | $ 0.75 | $ 0.61 | $ 1.61 | $ 1.43 |
Diluted weighted average common shares (in shares) | 46,584 | 47,091 | 46,867 | 47,212 |
Diluted net income attributable to La-Z-Boy Incorporated per share (in dollars per share) | $ 0.74 | $ 0.61 | $ 1.60 | $ 1.42 |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jan. 25, 2020 | Jan. 26, 2019 | Jan. 25, 2020 | Jan. 26, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 34,716 | $ 29,174 | $ 75,608 | $ 68,474 |
Other comprehensive income (loss) | ||||
Currency translation adjustment | (112) | 1,469 | 2,028 | (1,552) |
Change in fair value of cash flow hedges, net of tax | 0 | 10 | ||
Change in fair value of cash flow hedges, net of tax | 70 | (108) | ||
Net unrealized gain on marketable securities, net of tax | 16 | 90 | 170 | 154 |
Net pension amortization, net of tax | 41 | 515 | 123 | 1,548 |
Total other comprehensive income (loss) | (55) | 2,144 | 2,331 | 42 |
Total comprehensive income before allocation to noncontrolling interests | 34,661 | 31,318 | 77,939 | 68,516 |
Comprehensive income attributable to noncontrolling interests | (42) | (1,112) | (1,118) | (1,488) |
Comprehensive income attributable to La-Z-Boy Incorporated | $ 34,619 | $ 30,206 | $ 76,821 | $ 67,028 |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) $ in Thousands | Jan. 25, 2020 | Apr. 27, 2019 |
Current assets | ||
Cash and equivalents | $ 166,272 | $ 129,819 |
Restricted cash | 1,973 | 1,968 |
Receivables, net of allowance of $2,191 at 1/25/20 and $2,180 at 4/27/19 | 153,721 | 143,288 |
Inventories, net | 198,567 | 196,899 |
Other current assets | 82,765 | 69,144 |
Total current assets | 603,298 | 541,118 |
Property, plant and equipment, net | 212,851 | 200,523 |
Goodwill | 185,328 | 185,867 |
Other intangible assets, net | 29,235 | 29,907 |
Deferred income taxes – long-term | 19,928 | 20,670 |
Right of use lease asset | 318,162 | 0 |
Other long-term assets, net | 73,831 | 81,705 |
Total assets | 1,442,633 | 1,059,790 |
Current liabilities | ||
Current portion of long-term debt | 0 | 180 |
Accounts payable | 68,045 | 65,365 |
Lease liability, short-term | 65,128 | 0 |
Accrued expenses and other current liabilities | 195,349 | 173,091 |
Total current liabilities | 328,522 | 238,636 |
Long-term debt | 0 | 19 |
Lease liability, long-term | 267,955 | 0 |
Other long-term liabilities | 116,674 | 124,159 |
Shareholders' equity | ||
Preferred shares – 5,000 authorized; none issued | 0 | 0 |
Common shares, $1 par value – 150,000 authorized; 46,075 outstanding at 1/25/20 and 46,955 outstanding at 4/27/19 | 46,075 | 46,955 |
Capital in excess of par value | 316,764 | 313,168 |
Retained earnings | 353,419 | 325,847 |
Accumulated other comprehensive loss | (2,361) | (3,462) |
Total La-Z-Boy Incorporated shareholders' equity | 713,897 | 682,508 |
Noncontrolling interests | 15,585 | 14,468 |
Total equity | 729,482 | 696,976 |
Total liabilities and equity | $ 1,442,633 | $ 1,059,790 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Thousands | Jan. 25, 2020 | Apr. 27, 2019 |
Current assets | ||
Receivables, allowance | $ 2,191 | $ 2,180 |
Shareholders' equity | ||
Preferred shares, authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred shares, issued (in shares) | 0 | 0 |
Common shares, par value (in dollars per share) | $ 1 | $ 1 |
Common shares, authorized (in shares) | 150,000,000 | 150,000,000 |
Common shares, outstanding (in shares) | 46,075,000 | 46,955,000 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Jan. 25, 2020 | Jan. 26, 2019 | |
Cash flows from operating activities | ||
Net income | $ 75,608 | $ 68,474 |
Adjustments to reconcile net income to cash provided by (used for) operating activities | ||
(Gain)/loss on disposal of assets | (10,051) | 41 |
Change in deferred taxes | 1,238 | 2,538 |
Provision for doubtful accounts | 210 | 477 |
Depreciation and amortization | 23,035 | 23,182 |
Equity-based compensation expense | 7,235 | 8,174 |
Pension plan contributions | 0 | (7,000) |
Change in receivables | (11,178) | 1,152 |
Change in inventories | (62) | (18,950) |
Change in other assets | 53,620 | (10,103) |
Change in payables | 659 | 4,954 |
Change in other liabilities | (20,555) | 18,509 |
Net cash provided by operating activities | 119,759 | 91,448 |
Cash flows from investing activities | ||
Proceeds from disposals of assets | 11,242 | 447 |
Proceeds from insurance | 1,080 | 154 |
Capital expenditures | (35,464) | (35,766) |
Purchases of investments | (26,248) | (14,956) |
Proceeds from sales of investments | 24,688 | 14,304 |
Acquisitions | (6,412) | (78,582) |
Net cash used for investing activities | (31,114) | (114,399) |
Cash flows from financing activities | ||
Net proceeds from credit facility | 0 | 20,000 |
Payments on debt and finance lease liabilities | (135) | (169) |
Stock issued for stock and employee benefit plans, net of shares withheld for taxes | 828 | 4,012 |
Purchases of common stock | (35,346) | (16,726) |
Dividends paid | (18,641) | (17,381) |
Net cash used for financing activities | (53,294) | (10,264) |
Effect of exchange rate changes on cash and equivalents | 1,107 | (74) |
Change in cash, cash equivalents and restricted cash | 36,458 | (33,289) |
Cash, cash equivalents and restricted cash at beginning of period | 131,787 | 136,871 |
Cash, cash equivalents and restricted cash at end of period | 168,245 | 103,582 |
Supplemental disclosure of non-cash investing activities | ||
Capital expenditures included in payables | $ 4,026 | $ 2,827 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Common Shares | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non-Controlling Interests | |
Beginning balance at Apr. 28, 2018 | $ 625,216 | $ 46,788 | $ 298,948 | $ 291,644 | $ (25,199) | $ 13,035 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 18,951 | 18,303 | 648 | ||||
Other comprehensive income (loss) | (3,965) | (2,737) | (1,228) | ||||
Stock issued for stock and employee benefit plans, net of cancellations and withholding tax | (2,009) | 160 | (42) | (2,127) | |||
Purchases of shares of common stock | (7,944) | (257) | (176) | (7,511) | |||
Stock option and restricted stock expense | 2,040 | 2,040 | |||||
Cumulative effect adjustment, net of tax | ASU 2016-01 - Investments | 0 | 1,637 | (1,637) | ||||
Dividends declared and paid | (5,625) | (5,625) | |||||
Ending balance at Jul. 28, 2018 | 626,664 | 46,691 | 300,770 | 296,321 | (29,573) | 12,455 | |
Beginning balance at Apr. 28, 2018 | 625,216 | 46,788 | 298,948 | 291,644 | (25,199) | 13,035 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 68,474 | ||||||
Other comprehensive income (loss) | 42 | ||||||
Cumulative effect adjustment, net of tax | (1,637) | ||||||
Ending balance at Jan. 26, 2019 | 671,786 | 46,730 | 306,896 | 330,491 | (26,854) | 14,523 | |
Beginning balance at Jul. 28, 2018 | 626,664 | 46,691 | 300,770 | 296,321 | (29,573) | 12,455 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 20,349 | 20,012 | 337 | ||||
Other comprehensive income (loss) | 1,863 | 1,244 | 619 | ||||
Stock issued for stock and employee benefit plans, net of cancellations and withholding tax | 6,048 | 335 | 5,748 | (35) | |||
Purchases of shares of common stock | (3,666) | (121) | (2,456) | (1,089) | |||
Stock option and restricted stock expense | 3,639 | 3,639 | |||||
Dividends declared and paid | (5,653) | (5,653) | |||||
Dividends declared not paid | (13) | (13) | |||||
Ending balance at Oct. 27, 2018 | 649,231 | 46,905 | 307,701 | 309,543 | (28,329) | 13,411 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 29,174 | 28,731 | 443 | ||||
Other comprehensive income (loss) | 2,144 | 1,475 | 669 | ||||
Stock issued for stock and employee benefit plans, net of cancellations and withholding tax | (27) | 2 | (5) | (24) | |||
Purchases of shares of common stock | (5,116) | (177) | (3,295) | (1,644) | |||
Stock option and restricted stock expense | 2,495 | 2,495 | |||||
Dividends declared and paid | (6,103) | (6,103) | |||||
Dividends declared not paid | (12) | (12) | |||||
Ending balance at Jan. 26, 2019 | 671,786 | 46,730 | 306,896 | 330,491 | (26,854) | 14,523 | |
Beginning balance at Apr. 27, 2019 | 696,976 | 46,955 | 313,168 | 325,847 | (3,462) | 14,468 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 17,988 | 18,069 | (81) | ||||
Other comprehensive income (loss) | 767 | 281 | 486 | ||||
Stock issued for stock and employee benefit plans, net of cancellations and withholding tax | (1,417) | 126 | 126 | (1,669) | |||
Purchases of shares of common stock | (12,313) | (391) | (3,762) | (8,160) | |||
Stock option and restricted stock expense | 1,675 | 1,675 | |||||
Cumulative effect adjustment, net of tax | Accounting Standards Update 2016-02 | [1] | 574 | 574 | ||||
Reclassification of certain income tax effects | Accounting Standards Update 2018-02 | [2] | 0 | 547 | (547) | |||
Dividends declared and paid | (6,112) | (6,112) | |||||
Ending balance at Jul. 27, 2019 | 698,138 | 46,690 | 311,207 | 329,096 | (3,728) | 14,873 | |
Beginning balance at Apr. 27, 2019 | 696,976 | 46,955 | 313,168 | 325,847 | (3,462) | 14,468 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 75,608 | ||||||
Other comprehensive income (loss) | 2,331 | ||||||
Cumulative effect adjustment, net of tax | (547) | ||||||
Ending balance at Jan. 25, 2020 | 729,482 | 46,075 | 316,764 | 353,419 | (2,361) | 15,585 | |
Beginning balance at Jul. 27, 2019 | 698,138 | 46,690 | 311,207 | 329,096 | (3,728) | 14,873 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 22,904 | 22,593 | 311 | ||||
Other comprehensive income (loss) | 1,619 | 1,260 | 359 | ||||
Stock issued for stock and employee benefit plans, net of cancellations and withholding tax | 1,988 | 84 | 1,908 | (4) | |||
Purchases of shares of common stock | (10,854) | (335) | (1,908) | (8,611) | |||
Stock option and restricted stock expense | 3,032 | 3,032 | |||||
Dividends declared and paid | (6,039) | (6,039) | |||||
Dividends declared not paid | (46) | (46) | |||||
Ending balance at Oct. 26, 2019 | 710,742 | 46,439 | 314,239 | 336,989 | (2,468) | 15,543 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 34,716 | 34,512 | 204 | ||||
Other comprehensive income (loss) | (55) | 107 | (162) | ||||
Stock issued for stock and employee benefit plans, net of cancellations and withholding tax | 258 | 14 | 281 | (37) | |||
Purchases of shares of common stock | (12,182) | (378) | (284) | (11,520) | |||
Stock option and restricted stock expense | 2,528 | 2,528 | |||||
Dividends declared and paid | (6,490) | (6,490) | |||||
Dividends declared not paid | (35) | (35) | |||||
Ending balance at Jan. 25, 2020 | $ 729,482 | $ 46,075 | $ 316,764 | $ 353,419 | $ (2,361) | $ 15,585 | |
[1] | Cumulative effect adjustment of deferred gains on prior sale/leaseback transactions as a result of adopting ASU 2016-02. | ||||||
[2] | Income tax effects of the Tax Cuts and Jobs Act are reclassified from Accumulated Other Comprehensive Income ("AOCI") to retained earnings due to the adoption of ASU 2018-02. |
CONSOLIDATED STATEMENT OF CHA_2
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Parenthetical) - $ / shares shares in Thousands | 3 Months Ended | |||||
Jan. 25, 2020 | Oct. 26, 2019 | Jul. 27, 2019 | Jan. 26, 2019 | Oct. 27, 2018 | Jul. 28, 2018 | |
Dividends declared (in dollars per share) | $ 0.14 | $ 0.13 | $ 0.13 | $ 0.13 | $ 0.12 | $ 0.12 |
Dividends paid (in dollars per share) | $ 0.14 | $ 0.13 | $ 0.13 | $ 0.13 | $ 0.12 | $ 0.12 |
Common Shares | ||||||
Shares purchased (in shares) | 378 | 335 | 391 | 177 | 121 | 257 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Jan. 25, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include the consolidated accounts of La-Z-Boy Incorporated and our majority-owned subsidiaries (collectively, the "Company"). We derived the April 27, 2019 , balance sheet from our audited financial statements. We prepared the interim financial information in conformity with generally accepted accounting principles, which we applied on a basis consistent with those reflected in our fiscal 2019 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”), but the information does not include all of the disclosures required by generally accepted accounting principles. In management’s opinion, the interim financial information includes all adjustments and accruals, consisting only of normal recurring adjustments (except as otherwise disclosed), that are necessary for a fair statement of results for the respective interim periods. The interim results reflected in the accompanying financial statements are not necessarily indicative of the results of operations that will occur for the full fiscal year ending April 25, 2020 . To further strengthen our supply chain footprint, on August 8, 2019, we announced our plan to close our Redlands, California upholstered furniture manufacturing facility and move production to available capacity at our other North American facilities. The Company’s Redlands upholstered furniture plant employed about 350 people, accounted for approximately 10% of the La-Z-Boy branded business total upholstery production, and manufactured recliners, motion sofas and classics (high-leg recliners). Production ceased at the Redlands plant as of the end of the second quarter of fiscal 2020 and in the third quarter of fiscal 2020, the facility, which is approximately 200,000 square feet, was sold for $10.8 million , net of closing costs. The sale of the Redlands property resulted in a $9.7 million pre-tax gain, recorded in selling, general and administrative expense ("SG&A") in our consolidated statement of income. In addition, we have transitioned the leather cut-and-sew operation from the Newton, Mississippi upholstered furniture manufacturing plant to another North American-based cut-and-sew facility. The move of the Newton leather cut-and-sew operation impacted about 105 of the 525 employees at that location. As a part of our supply chain optimization initiative, we may incur expenses that qualify as exit and disposal costs under ASC 420, Exit or Disposal Cost Obligations. Other expenses that are an integral component of, and directly attributable to, restructuring activities do not qualify as exit and disposal costs, such as accelerated depreciation, asset impairments and other incremental costs. In the first nine months of fiscal 2020, we recognized pre-tax expenses associated with this initiative of $5.3 million within cost of sales. These costs do not qualify as exit and disposal costs under ASC 420. At January 25, 2020 , we owned preferred shares of two privately held start-up companies, both of which are variable interest entities. We also hold a warrant to purchase common shares of one of these companies. We have not consolidated the results of either of these companies in our financial statements because we do not have the power to direct those activities that most significantly impact the economic performance of either of these companies and, therefore, are not the primary beneficiary. Accounting pronouncement adopted in fiscal 2020 The accounting standards update (“ASU”) described in the paragraph below had a significant impact on our accounting policies and our consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), requiring lessees to record all operating leases on their balance sheet. Under this standard, the lessee is required to record an asset for the right to use the underlying asset for the lease term and a corresponding liability for the contractual lease payments. We have adopted this standard in the first quarter of fiscal 2020 using the modified retrospective approach. See Note 5 for further information. The following table summarizes additional ASUs which were adopted in fiscal 2020 , but did not have a material impact on our accounting policies or our consolidated financial statements and related disclosures. ASU Description ASU 2017-06 Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting ASU 2017-12 Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities ASU 2018-02 Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ASU 2018-07 Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting ASU 2018-13 Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurements ASU 2018-16 Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes 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 2016-13 Financial Instruments – Credit losses (Topic 326): Measurement of Credit Losses on Financial Instruments Fiscal 2021 ASU 2018-14 Compensation – Retirement benefits – Defined Benefit Plans – General (Subtopic 715-20): Changes to the Disclosure Requirements for Defined Benefit Plans Fiscal 2022 ASU 2019-12 Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Fiscal 2022 ASU 2020-01 Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 325, and Topic 815 Fiscal 2022 Subsequent events Subsequent to the end of the third quarter of fiscal 2020, one of our largest customers made a public statement that they are actively exploring a variety of options with creditors, investors and landlords in order to continue serving their customers. As of the end of the third quarter of fiscal 2020, we had a trade receivable from this customer of approximately $7 million , and have not provided for any potential credit losses. We are monitoring this fast-developing situation, including through direct discussions with this customer, and as of the date of this filing, based on all information available to us, believe that the amounts owed as of January 25, 2020 , are materially collectible. |
Acquisitions
Acquisitions | 9 Months Ended |
Jan. 25, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions We did not complete any acquisitions during the nine months ended January 25, 2020 . Joybird acquisition On July 30, 2018, we completed our acquisition of Stitch Industries, Inc. ("Joybird"), an e-commerce retailer and manufacturer of upholstered furniture, for guaranteed cash payments of $75 million , which was subject to a working capital adjustment of $2.5 million . We received the working capital adjustment during the third quarter of fiscal 2019 from amounts placed in escrow at the time of the closing of the transaction. We acquired Joybird to better position ourselves for growth in the online selling environment and increase our visibility with millennial and Gen X consumers, while simultaneously leveraging our supply chain assets. The guaranteed payments include a closing date cash payment of $37.5 million in purchase price consideration (net of the working capital adjustment), $7.5 million in prepaid compensation, and the assumption of $5.0 million of liabilities that will be paid within two years following the acquisition. The remaining $25 million will be paid in five annual installments of $5 million on the anniversary date of the acquisition, the first of which was paid in the first quarter of fiscal 2020. The merger agreement also includes two future earn-out opportunities based on Joybird’s financial performance in fiscal 2021 and fiscal 2023. The $7.5 million of prepaid compensation relates to the retention of the four Joybird founders, now our employees, each of whom will forfeit proportional amounts if one or more of them resigns in the two years following the acquisition. We are amortizing the $7.5 million to SG&A expense over the two-year retention period on a straight-line basis. In addition to the guaranteed cash payments of $75 million , we recorded a contingent consideration liability on the date of acquisition of $7.5 million , which reflects the fair value of the earn-out opportunities as of the date of acquisition. We also recorded a finite-lived intangible asset of $6.4 million reflecting the fair value of the acquired Joybird ® trade name, which we are amortizing to SG&A expense on a straight-line basis over its useful life of eight years . The undiscounted range of the contingent consideration is zero to $65 million and is based on sales and profitability of Joybird in fiscal 2021 and fiscal 2023. Subsequent adjustments to the fair value of the contingent consideration will impact SG&A expense in our consolidated statement of income. We recorded $78.8 million of goodwill related to the Joybird acquisition, related primarily to synergies we expect from the integration of the acquisition and the anticipated future benefits of these synergies. The finite-lived intangible asset and goodwill asset for Joybird are not deductible for federal income tax purposes. We included the Joybird operating segment in our other business activities which we report within our Corporate and Other reportable segment. Refer to Note 6. Goodwill and Other Intangible Assets and Note 16. Fair Value Measurements for further information regarding the valuation of the contingent consideration, goodwill and intangible assets related to Joybird. The following table summarizes the purchase price allocation for Joybird at the date of acquisition: (Unaudited, amounts in thousands) Joybird Acquisition Fair value of consideration: Cash (paid at closing) $ 37,482 Guaranteed payment 22,489 Acquisition earn-out 7,500 Assumption of liability 5,000 Working capital adjustment (2,486 ) Total fair value of consideration 69,985 Amounts recognized for assets acquired and liabilities assumed: Inventory 5,258 Other current assets 3,733 Property, plant and equipment 2,057 Finite-lived tradename 6,400 Other long-term assets 3,647 Accounts payable (8,222 ) Customer deposits (13,904 ) Other current liabilities (7,681 ) Other long-term liabilities (150 ) Total identifiable net liabilities acquired (8,862 ) Goodwill $ 78,847 |
Restricted Cash
Restricted Cash | 9 Months Ended |
Jan. 25, 2020 | |
Cash and Cash Equivalents [Abstract] | |
Restricted Cash | Restricted Cash We have restricted cash on deposit with a bank as collateral for certain letters of credit. All our letters of credit have maturity dates within the next twelve months, but we expect to renew some of these letters of credit when they mature. (Unaudited, amounts in thousands) 1/25/20 1/26/19 Cash and cash equivalents $ 166,272 $ 101,579 Restricted cash 1,973 2,003 Total cash, cash equivalents and restricted cash $ 168,245 $ 103,582 |
Inventories
Inventories | 9 Months Ended |
Jan. 25, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories A summary of inventories is as follows: (Unaudited, amounts in thousands) 1/25/20 4/27/19 Raw materials $ 96,010 $ 90,359 Work in process 14,055 13,728 Finished goods 110,168 114,478 FIFO inventories 220,233 218,565 Excess of FIFO over LIFO (21,666 ) (21,666 ) Total inventories $ 198,567 $ 196,899 |
Leases
Leases | 9 Months Ended |
Jan. 25, 2020 | |
Leases [Abstract] | |
Leases | Leases During the first quarter of fiscal 2020, we adopted ASU 2016-02, Leases (Topic 842) and all related amendments. The guidance requires lessees to recognize substantially all leases on their balance sheet as a right-of-use (“ROU”) asset and a lease liability. The Company leases real estate for retail stores, distribution centers, warehouses, 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 ROU asset and lease liability, we determine our incremental borrowing rate by applying a spread above the U.S. Treasury borrowing rates. In the case 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 asset and lease liability. The Company has elected to apply the practical expedients permitted under transition guidance to forgo the restatement of comparative periods and to not reassess leases entered into prior to adoption. In addition, we have elected the practical expedient to not separate lease and non-lease components when determining the ROU asset and lease liability. We have also made an accounting policy election to not recognize an ROU asset and lease liability on the balance sheet for those leases with an initial term of one year or less and instead, such liabilities will be expensed on a straight-line basis over the lease term. Supplemental balance sheet information related to leases: (Unaudited, amounts in thousands) 1/25/20 Operating leases ROU assets $ 318,124 Lease liabilities, short-term 65,089 Lease liabilities, long-term 267,955 Finance leases ROU assets $ 38 Lease liabilities, short-term 39 Lease liabilities, long-term — The ROU assets by segment are as follows: (Unaudited, amounts in thousands) 1/25/20 Upholstery $ 57,800 Casegoods 4,214 Retail 242,987 Corporate & Other 13,161 Total ROU assets $ 318,162 The components of lease cost are as follows for the respective periods ended January 25, 2020 : (Unaudited, amounts in thousands) Quarter Ended Nine Months Ended Operating lease cost $ 18,987 $ 57,024 Financing lease cost 40 139 Short-term lease cost 25 76 Variable lease cost 48 142 Less: Sublease income (633 ) (1,893 ) Total lease cost $ 18,467 $ 55,488 The following tables present supplemental lease disclosures: Nine Months Ended January 25, 2020 (Unaudited, amounts in thousands) Operating Leases Financing Leases Cash paid for amounts included in the measurement of lease liabilities $ 57,851 $ 138 Lease liabilities arising from new ROU assets 52,954 — 1/25/20 (Unaudited, amounts in thousands) Operating Leases Financing Leases Weighted-average remaining lease term (years) 6.7 0.5 Weighted-average discount rate 3.8 % 3.9 % The following table presents our undiscounted cash flows as of January 25, 2020 , and our minimum contractual obligations on our leases as of April 27, 2019 : 1/25/20 4/27/19 (Unaudited, amounts in thousands) Operating Leases Financing Leases Operating Leases Financing Leases Within one year $ 76,348 $ 40 $ 76,508 $ 180 After one year and within two years 66,953 — 71,544 19 After two years and within three years 55,988 — 58,763 — After three years and within four years 44,375 — 46,541 — After four years and within five years 37,576 — 36,082 — After five years 95,660 — 102,782 — Total lease payments 376,900 40 $ 392,220 $ 199 Less: Interest 43,856 1 Total lease obligations $ 333,044 $ 39 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Jan. 25, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets We have goodwill on our consolidated balance sheet as follows: Reportable Segment/Unit Related Acquisition Upholstery segment Acquisition of the wholesale business in the United Kingdom and Ireland Retail segment Acquisitions of La-Z-Boy Furniture Galleries ® stores Corporate & Other Acquisition of Joybird The following is a roll-forward of goodwill for the nine months ended January 25, 2020 : (Unaudited, amounts in thousands) Upholstery Segment Retail Segment Corporate and Other Total Goodwill Balance at April 27, 2019 $ 12,148 $ 94,103 $ 79,616 $ 185,867 Acquisition adjustment — — (769 ) (769 ) Translation adjustment 148 82 — 230 Balance at January 25, 2020 $ 12,296 $ 94,185 $ 78,847 $ 185,328 We have intangible assets on our consolidated balance sheet as follows: Reportable Segment/Unit Intangible Asset Useful Life Upholstery segment Primarily acquired customer relationships from our acquisition of the wholesale business in the United Kingdom and Ireland Amortizable over useful lives that do not exceed 15 years Casegoods segment American Drew ® trade name Indefinite-lived Retail segment Reacquired rights to own and operate La-Z-Boy Furniture Galleries ® stores Indefinite-lived Corporate & Other Joybird ® trade name Amortizable over eight-year useful life The following is a roll-forward of our other intangible assets for the nine months ended January 25, 2020 : (Unaudited, amounts in thousands) Indefinite- Lived Trade Names Finite- Lived Trade Name Indefinite- Lived Reacquired Rights Other Intangible Assets Total Other Intangible Assets Balance at April 27, 2019 $ 1,155 $ 5,801 $ 20,117 $ 2,834 $ 29,907 Amortization — (598 ) — (165 ) (763 ) Translation adjustment — — 62 29 91 Balance at January 25, 2020 $ 1,155 $ 5,203 $ 20,179 $ 2,698 $ 29,235 |
Investments
Investments | 9 Months Ended |
Jan. 25, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments We have current and long-term investments intended to enhance returns on our cash as well as to fund future obligations of our non-qualified defined benefit retirement plan, our executive deferred compensation plan, and our performance compensation retirement plan. 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. We also hold other investments consisting of cost-basis preferred shares of two privately held start-up companies. In the third quarter of fiscal year 2020, we recognized an other-than-temporary impairment of $6.0 million , which represents the full cost-basis value of the investment in one of these privately held start-up companies. The impairment loss is recognized in Other income (expense), net on the consolidated statement of income. Refer to Note 16, Fair Value Measurements for further information. The following summarizes our investments: (Unaudited, amounts in thousands) 1/25/20 4/27/19 Short-term investments: Marketable securities $ 18,891 $ 18,016 Held-to-maturity investments 3,542 3,341 Total short-term investments 22,433 21,357 Long-term investments: Marketable securities 21,902 24,085 Cost basis investments 6,479 11,979 Total long-term investments 28,381 36,064 Total investments $ 50,814 $ 57,421 Investments to enhance returns on cash $ 30,109 $ 31,470 Investments to fund compensation/retirement plans 14,226 13,972 Other investments 6,479 11,979 Total investments $ 50,814 $ 57,421 The following is a summary of the unrealized gains, unrealized losses, and fair value by investment type: 1/25/20 4/27/19 (Unaudited, amounts in thousands) Gross Unrealized Gains Gross Unrealized Losses Fair Value Gross Unrealized Gains Gross Unrealized Losses Fair Value Equity securities $ 1,922 $ (6,000 ) $ 13,600 $ 1,841 $ — $ 19,535 Fixed income 199 (8 ) 31,962 75 (111 ) 33,217 Other 376 — 5,252 258 (13 ) 4,669 Total securities $ 2,497 $ (6,008 ) $ 50,814 $ 2,174 $ (124 ) $ 57,421 The following table summarizes sales of marketable securities: Quarter Ended Nine Months Ended (Unaudited, amounts in thousands) 1/25/20 1/26/19 1/25/20 1/26/19 Proceeds from sales $ 11,517 $ 6,550 $ 23,887 $ 14,304 Gross realized gains 431 726 618 811 Gross realized losses (62 ) (261 ) (150 ) (327 ) The following is a summary of the fair value of fixed income marketable securities, classified as available-for-sale securities, by contractual maturity: (Unaudited, amounts in thousands) 1/25/20 Within one year $ 19,041 Within two to five years 10,000 Within six to ten years 1,639 Thereafter 1,282 Total $ 31,962 |
Employee Benefits
Employee Benefits | 9 Months Ended |
Jan. 25, 2020 | |
Retirement Benefits [Abstract] | |
Employee Benefits | Employee Benefits Pension During the fourth quarter of fiscal 2019 , we terminated our defined benefit pension plan for eligible factory hourly employees in our La-Z-Boy operating unit. In connection with the plan termination, we settled all future obligations under the plan through a combination of lump-sum payments to eligible participants who elected to receive them, and the transfer of any remaining benefit obligations under the plan to a highly rated insurance company. During the second quarter of fiscal 2020 , we received a pre-tax refund of $1.9 million from the insurance company, representing an overpayment of the expected benefit obligations that were settled during the fourth quarter of fiscal 2019 . The refund was recorded as a component of other income (expense), net in our consolidated statement of income. There were no net periodic pension costs associated with the terminated pension plan in the quarter and nine months ended January 25, 2020 . For the quarter and nine months ended January 26, 2019 , net periodic pension costs were as follows: Quarter Ended Nine Months Ended (Unaudited, amounts in thousands) 01/26/19 01/26/19 Service cost $ 223 $ 869 Interest cost 1,116 3,348 Expected return on plan assets (1,136 ) (3,408 ) Net amortization 639 1,917 Net periodic pension cost $ 842 $ 2,726 The components of net periodic pension cost other than the service cost were included in other income (expense), net in our consolidated statement of income. Service cost was recorded in cost of sales in our consolidated statement of income. Employee Vacation Policy Changes |
Product Warranties
Product Warranties | 9 Months Ended |
Jan. 25, 2020 | |
Product Warranties Disclosures [Abstract] | |
Product Warranties | Product Warranties We accrue an estimated liability for product warranties when we recognize revenue on the sale of warranted products. We estimate future warranty claims on new sales based on our historical claims experience and also provide for any additional anticipated future costs on previously sold products. We incorporate repair costs into our liability estimates, including materials, labor and overhead amounts necessary to perform repairs and any costs associated with delivering repaired product to our customers. Over 90% of our warranty liability relates to our Upholstery segment as we generally warrant our products against defects for one year on fabric and leather, from one to ten years on cushions and padding, and provide a limited lifetime warranty on certain mechanisms and frames. Our Upholstery 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 products sold by Joybird, which is part of our Corporate and Other results. For all our manufacturer warranties, the warranty period begins when the consumer receives our product. We use considerable judgment in making our estimates, and we record differences between our actual and estimated costs when the differences are known. A reconciliation of the changes in our product warranty liability is as follows: Quarter Ended Nine Months Ended (Unaudited, amounts in thousands) 01/25/20 01/26/19 01/25/20 01/26/19 Balance as of the beginning of the period $ 23,081 $ 25,197 $ 22,736 $ 21,205 Acquisitions — — — 4,100 Accruals during the period 6,321 5,660 17,746 16,270 Settlements during the period (6,057 ) (5,560 ) (17,137 ) (16,278 ) Balance as of the end of the period $ 23,345 $ 25,297 $ 23,345 $ 25,297 As of January 25, 2020 and April 27, 2019 , we included $14.3 million and $13.9 million , respectively, of our product warranty liability in accrued expenses and other current liabilities on our consolidated balance sheet, and included the remainder 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. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Jan. 25, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The table below summarizes the total stock-based compensation expense we recognized for all outstanding grants in our consolidated statement of income: Quarter Ended Nine Months Ended (Unaudited, amounts in thousands) 01/25/20 01/26/19 01/25/20 01/26/19 Equity-based awards expense $ 2,528 $ 2,495 $ 7,235 $ 8,174 Liability-based awards expense (303 ) 144 37 10 Total stock-based compensation expense $ 2,225 $ 2,639 $ 7,272 $ 8,184 Stock Options. We granted 248,662 stock options to employees during the first quarter of fiscal 2020 and we have stock options outstanding from previous grants. In fiscal 2020 , we have changed the grant mix to include fewer stock options and have replaced those awards with restricted shares. 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 committee 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 the end of the fiscal year in which the grant was made. 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 estimate forfeiture rates based on our employees’ forfeiture history and believe they will approximate future results. We estimate the fair value of the employee stock options at the date of grant using the Black-Scholes option-pricing model, which requires management to make certain assumptions. We estimate expected volatility based on the historical volatility of our common shares. We base the average expected life on the contractual term of the stock option and expected employee exercise trends. We base the risk-free rate on U.S. Treasury issues with a term equal to the expected life assumed at the date of the grant. We calculated the fair value of stock options granted during the first quarter of fiscal 2020 using the following assumptions: (Unaudited) Fiscal 2020 grant Risk-free interest rate 2.19 % Dividend rate 1.72 % Expected life in years 5.0 Stock price volatility 34.27 % Fair value per share $ 7.94 Stock Appreciation Rights (“SARs”). We have not granted any SARs to employees since fiscal 2014, but we have SARs outstanding from the fiscal 2013 and fiscal 2014 grants. All outstanding SARs are fully vested and have a term of ten years . SARs will be paid in cash upon exercise and, accordingly, we account for SARs as liability-based awards that we re-measure to fair value at the end of each reporting period. In fiscal 2013 and fiscal 2014, we granted SARs as described in our Annual Report on Form 10-K for the fiscal year ended April 27, 2013 and April 26, 2014, respectively. As of January 25, 2020 , we had 7,149 and 13,869 SARs outstanding for the fiscal 2013 and fiscal 2014 awards, respectively. These awards have exceeded their expected life and will be re-measured to fair value based on their intrinsic value, which is the market value of our common stock on the last day of the reporting period less the exercise price, until the earlier of the exercise date or the contractual term date. At January 25, 2020 , the intrinsic value per share of the fiscal 2013 and fiscal 2014 awards were $20.59 and $13.50 , respectively. Restricted Stock . We granted 166,649 shares of restricted stock to employees during the first nine months of fiscal 2020. We also have shares of restricted stock outstanding from previous grants. We issue restricted stock at no cost to the employees and the shares are held in an escrow account until the vesting period ends. If a recipient’s employment ends during the escrow period (other than through death or disability), the shares are returned at no cost to the Company. We account for restricted stock awards as equity-based awards because when they vest, they will be settled in common shares. The weighted-average fair value of the restricted stock awarded in the first nine months of fiscal 2020 was $30.41 per share, the market value of our common shares on the date of grant. We estimate forfeiture rates based on our employees' forfeiture history and believe they will approximate future results. We recognize compensation expense for restricted stock over the vesting period equal to the fair value on the grant date of the award. Restricted stock awards vest at 25% per year, beginning one year from the grant date over a term of four years . Restricted Stock Units. During the second quarter of fiscal 2020, we granted 28,332 restricted stock units to our non-employee directors. These restricted stock units vest when the director leaves the board. 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 the grant, which was $31.77 . Performance Shares. During the first quarter of fiscal 2020, we granted 155,605 performance-based shares. We also have performance-based share awards outstanding from previous grants. Payout of these grants depends on our financial performance ( 80% ) 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 ( 20% ). The performance share opportunity ranges from 50% of the employee’s target award if minimum performance requirements are met to a maximum of 200% of the target award based on the attainment of certain financial and shareholder-return goals over a specific performance period, which is generally three fiscal years. We account for performance-based shares as equity-based awards because when they vest, they will be settled in common shares. We estimate forfeiture rates based on our employees' forfeiture history and believe they will approximate future results. For shares that vest based on our results relative to the performance goals, we expense as compensation cost the fair value of the shares as of the day we granted the awards recognized over the performance period, taking into account the probability that we will satisfy the performance goals. The fair value of each share of the awards we granted in fiscal 2020 that vest based on attaining performance goals was $28.68 , the market value of our common shares on the date we granted the awards less the dividends we expect to pay before the shares vest. For shares that vest based on market conditions, we use a Monte Carlo valuation model to estimate each share’s fair value as of the date of grant. The Monte Carlo valuation model uses multiple simulations to evaluate our probability of achieving various stock price levels to determine our expected performance ranking relative to our peer group. For shares that vest based on market conditions, we expense compensation cost, net of estimated forfeitures, over the vesting period regardless of whether the market condition is ultimately satisfied. Based on the Monte Carlo model, the fair value as of the grant date of the fiscal 2020 grant of shares that vest based on market conditions was $38.75 . |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Jan. 25, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The activity in accumulated other comprehensive income (loss) for the quarters ended January 25, 2020 , and January 26, 2019 , is as follows: (Unaudited, amounts in thousands) Translation adjustment Change in fair value of cash flow hedge Unrealized gain (loss) on marketable securities Net pension amortization and net actuarial loss Accumulated other comprehensive loss Balance at October 26, 2019 $ 1,345 $ — $ 418 $ (4,231 ) $ (2,468 ) Changes before reclassifications 50 — 41 — 91 Amounts reclassified to net income — — (20 ) 55 35 Tax effect — — (5 ) (14 ) (19 ) Other comprehensive income attributable to La-Z-Boy Incorporated 50 — 16 41 107 Balance at January 25, 2020 $ 1,395 $ — $ 434 $ (4,190 ) $ (2,361 ) Balance at October 27, 2018 $ (24 ) $ (24 ) $ (197 ) $ (28,084 ) $ (28,329 ) Changes before reclassifications 800 — 72 — 872 Amounts reclassified to net income — 93 48 687 828 Tax effect — (23 ) (30 ) (172 ) (225 ) Other comprehensive income attributable to La-Z-Boy Incorporated 800 70 90 515 1,475 Balance at January 26, 2019 $ 776 $ 46 $ (107 ) $ (27,569 ) $ (26,854 ) The activity in accumulated other comprehensive income (loss) for the nine months ended January 25, 2020 , and January 26, 2019 , is as follows: (Unaudited, amounts in thousands) Translation adjustment Change in fair value of cash flow hedge Unrealized gain (loss) on marketable securities Net pension amortization and net actuarial loss Accumulated other comprehensive loss Balance at April 27, 2019 $ 50 $ 87 $ 6 $ (3,605 ) $ (3,462 ) Changes before reclassifications 1,345 — 253 — 1,598 Reclassification of certain income tax effects (1) — (97 ) 258 (708 ) (547 ) Amounts reclassified to net income — 14 (28 ) 164 150 Tax effect — (4 ) (55 ) (41 ) (100 ) Other comprehensive income (loss) attributable to La-Z-Boy Incorporated 1,345 (87 ) 428 (585 ) 1,101 Balance at January 25, 2020 $ 1,395 $ — $ 434 $ (4,190 ) $ (2,361 ) Balance at April 28, 2018 $ 2,388 $ 154 $ 1,376 $ (29,117 ) $ (25,199 ) Changes before reclassifications (1,612 ) (369 ) 175 — (1,806 ) Cumulative effect adjustment for investments (2) — — (1,637 ) — (1,637 ) Amounts reclassified to net income — 225 29 2,059 2,313 Tax effect — 36 (50 ) (511 ) (525 ) Other comprehensive income (loss) attributable to La-Z-Boy Incorporated (1,612 ) (108 ) (1,483 ) 1,548 (1,655 ) Balance at January 26, 2019 $ 776 $ 46 $ (107 ) $ (27,569 ) $ (26,854 ) (1) Income tax effects of the Tax Cuts and Jobs Act are reclassified from AOCI to retained earnings due to adoption of ASU 2018-02. (2) The cumulative effect adjustment for investments is composed of $2.1 million of unrealized gains on equity investments offset by $0.5 million of tax expense. We reclassified the net $1.6 million of cumulative effect adjustment from accumulated other comprehensive loss to retained earnings as a result of adopting ASU 2016-01. We reclassified the unrealized gain/(loss) on marketable securities from accumulated other comprehensive loss to net income through other income (expense), net in our consolidated statement of income, reclassified the change in fair value of cash flow hedges to net income through cost of sales, and reclassified the net pension amortization to net income through other income (expense), net. The components of non-controlling interest were as follows: Quarter Ended Nine Months Ended (Unaudited, amounts in thousands) 1/25/20 1/26/19 1/25/20 1/26/19 Balance as of the beginning of the period $ 15,543 $ 13,411 $ 14,468 $ 13,035 Net income 204 443 434 1,428 Other comprehensive income (loss) (162 ) 669 683 60 Balance as of the end of the period $ 15,585 $ 14,523 $ 15,585 $ 14,523 |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Jan. 25, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Our revenue is primarily derived from product sales. We report product sales net of discounts and recognize them when control (rights and obligations associated with the product) passes to the customer. For sales to furniture retailers or distributors, control typically transfers when we ship the product. In cases where we sell directly to the end consumer, control of the product is generally transferred upon delivery. For shipping and handling activities, we have elected to apply the accounting policy election permitted in ASC 606-10-25-18B, which allows an entity to account for shipping and handling activities as fulfillment activities (rather than as a promised good or service) when the activities are performed even if those activities are performed after the control of the good has been transferred. We expense shipping and handling costs at the time we recognize revenue in accordance with this election. For sales tax, we elected to apply the accounting policy election permitted in ASC 606-10-32-2A, which allows an entity to exclude from the measurement of the transaction price all taxes imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer, including sales, use, excise, value-added, and franchise taxes (collectively referred to as sales taxes). This allows us to present revenue net of these certain types of taxes. The following table presents our revenue disaggregated by product category and by segment or unit: Quarter Ended January 25, 2020 (Unaudited, amounts in thousands) Upholstery Casegoods Retail Corporate and Other Total Motion Upholstery Furniture $ 212,079 $ — $ 100,662 $ — $ 312,741 Stationary Upholstery Furniture 96,429 4,131 33,348 29,094 163,002 Bedroom Furniture — 7,772 1,517 1,842 11,131 Dining Room Furniture — 5,981 3,040 596 9,617 Occasional Furniture 383 11,619 6,148 516 18,666 Other (1) 27,805 (1,388 ) 22,779 (6,379 ) 42,817 Total $ 336,696 $ 28,115 $ 167,494 $ 25,669 $ 557,974 Eliminations (82,118 ) Consolidated Net Sales $ 475,856 Quarter Ended January 26, 2019 Upholstery Casegoods Retail Corporate and Other Total Motion Upholstery Furniture $ 212,631 $ — $ 100,232 $ — $ 312,863 Stationary Upholstery Furniture 94,551 3,844 27,652 24,096 150,143 Bedroom Furniture — 7,447 1,586 1,296 10,329 Dining Room Furniture — 5,733 3,097 610 9,440 Occasional Furniture 391 12,292 5,959 338 18,980 Other (1) 26,875 (1,251 ) 20,891 (3,491 ) 43,024 Total $ 334,448 $ 28,065 $ 159,417 $ 22,849 $ 544,779 Eliminations (77,197 ) Consolidated Net Sales $ 467,582 (1) Primarily includes revenue for delivery, advertising, royalties, parts, accessories, after-treatment products, tariff surcharges, discounts & allowances, rebates and other sales incentives. Nine Months Ended January 25, 2020 (Unaudited, amounts in thousands) Upholstery Casegoods Retail Corporate and Other Total Motion Upholstery Furniture $ 588,820 $ — $ 270,301 $ — $ 859,121 Stationary Upholstery Furniture 281,699 12,873 96,306 79,477 470,355 Bedroom Furniture — 24,711 4,513 4,800 34,024 Dining Room Furniture — 17,656 8,036 1,436 27,128 Occasional Furniture 1,083 33,988 16,728 1,374 53,173 Other (1) 79,365 (4,588 ) 63,010 (16,555 ) 121,232 Total $ 950,967 $ 84,640 $ 458,894 $ 70,532 $ 1,565,033 Eliminations (228,332 ) Consolidated Net Sales $ 1,336,701 Nine Months Ended January 26, 2019 Upholstery Casegoods Retail Corporate and Other Total Motion Upholstery Furniture $ 602,458 $ — $ 260,924 $ — $ 863,382 Stationary Upholstery Furniture 272,087 12,215 76,517 47,791 408,610 Bedroom Furniture — 24,045 3,891 3,756 31,692 Dining Room Furniture — 18,068 7,293 1,429 26,790 Occasional Furniture 1,202 38,003 15,000 828 55,033 Other (1) 69,192 (4,503 ) 54,706 (4,712 ) 114,683 Total $ 944,939 $ 87,828 $ 418,331 $ 49,092 $ 1,500,190 Eliminations (208,580 ) Consolidated Net Sales $ 1,291,610 (1) Primarily includes revenue for delivery, advertising, royalties, parts, accessories, after-treatment products, tariff surcharges, discounts & allowances, rebates and other sales incentives. Motion Upholstery Furniture - Includes gross revenue for upholstered furniture, such as recliners, sofas, loveseats, chairs, sectionals and modulars that have a mechanism that allows the back of the product to recline or the product's footrest to extend. This gross revenue includes sales to La-Z-Boy Furniture Galleries ® stores (including company-owned stores), operators of La-Z-Boy Comfort Studio ® locations, England Custom Comfort Center locations, other major dealers, independent retailers, and the end consumer. Stationary Upholstery Furniture - Includes gross revenue for upholstered furniture, such as sofas, loveseats, chairs, sectionals, modulars, and ottomans that do not have a mechanism. This gross revenue includes sales to La-Z-Boy Furniture Galleries ® stores (including company-owned stores), operators of La-Z-Boy Comfort Studio ® locations, England Custom Comfort Center locations, other major dealers, independent retailers, and the end consumer. Bedroom Furniture - Includes gross revenue for casegoods furniture typically found in a bedroom, such as beds, chests, dressers, nightstands and benches. This gross revenue includes sales to La-Z-Boy Furniture Galleries ® stores (including company-owned stores), independent retailers, and the end consumer. Dining Room Furniture - Includes gross revenue for casegoods furniture typically found in a dining room, such as dining tables, dining chairs, storage units and stools. This gross revenue includes sales to La-Z-Boy Furniture Galleries ® stores (including company-owned stores), independent retailers, and the end consumer. Occasional Furniture - Includes gross revenue for casegoods furniture found throughout the home, such as cocktail tables, chairsides, sofa tables, end tables, and entertainment centers. This gross revenue includes sales to La-Z-Boy Furniture Galleries ® stores (including company-owned stores), independent retailers, and the end consumer. At January 25, 2020 , our consolidated balance sheet includes current assets of $25.3 million that we reported as other receivables. These other receivables represent the remaining consideration to which we are entitled prior to fulfilling our performance obligation. At the beginning of fiscal 2020 , we had $17.0 million of other receivables. 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 deferred revenue (collectively, the “contract liabilities”). At January 25, 2020 , we included $60.9 million of customer deposits and $25.3 million of deferred revenues in accrued expenses and other current liabilities on our consolidated balance sheet. At the beginning of fiscal 2020, we had $42.8 million of customer deposits and $17.0 million of deferred revenues. During the quarter and nine months ended January 25, 2020 we recognized revenue of $0.5 million and $55.0 million , respectively, related to our contract liability balance at April 27, 2019 . We have elected the practical expedient permitted in ASC 606-10-32-18, which allows an entity to recognize the promised amount of consideration without adjusting for the effects of a significant financing component if the contract has a duration of one year or less. As our contracts typically are less than one year in length and do not have significant financing components, we have not adjusted consideration. |
Segment Information
Segment Information | 9 Months Ended |
Jan. 25, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Our reportable operating segments are the Upholstery segment, the Casegoods segment and the Retail segment. Upholstery Segment . Our Upholstery segment is our largest business segment and consists primarily of two operating segments: La-Z-Boy, our largest operating segment, and the operating segment for our England subsidiary. The Upholstery segment also includes our international wholesale businesses. We aggregate these operating segments into one reportable segment because they are economically similar and because they meet the other aggregation criteria for determining reportable segments. Our Upholstery segment manufactures and imports upholstered furniture such as recliners and motion furniture, sofas, loveseats, chairs, sectionals, modulars, ottomans and sleeper sofas. The Upholstery segment sells directly to La-Z-Boy Furniture Galleries ® stores, operators of La-Z-Boy Comfort Studio ® locations and England Custom Comfort Center locations, major dealers, and a wide cross-section of other independent retailers. Casegoods Segment . Our Casegoods segment consists of one operating segment that sells furniture under three brands: American Drew ® , Hammary ® , and Kincaid ® . The Casegoods segment is an importer, marketer, and distributor of casegoods (wood) furniture such as bedroom sets, dining room sets, entertainment centers and occasional pieces, and also manufactures some coordinated upholstered furniture. The Casegoods segment sells directly to major dealers, as well as La-Z-Boy Furniture Galleries ® stores, and a wide cross-section of other independent retailers. Retail Segment . Our Retail segment consists of one operating segment comprised of our 155 company-owned La-Z-Boy Furniture Galleries ® stores. The Retail segment sells primarily upholstered furniture, in addition to some casegoods and other accessories, to end consumers through these stores. Corporate & Other . Corporate & Other includes the shared costs for corporate functions, including human resources, information technology, finance and legal, in addition to revenue generated through royalty agreements with companies licensed to use the La-Z-Boy ® brand name on various products. We consider our corporate functions to be other business activities and have aggregated them with our other insignificant operating segments including our global trading company in Hong Kong and Joybird, an e-commerce retailer that manufactures upholstered furniture such as sofas, loveseats, chairs, ottomans, sleeper sofas and beds, and also imports casegoods (wood) furniture such as occasional tables and other accessories. Joybird sells to the end consumer primarily online through its website, www.joybird.com. None of the operating segments included in Corporate & Other meet the requirements of reportable segments. The following table presents sales and operating income (loss) by segment: Quarter Ended Nine Months Ended (Unaudited, amounts in thousands) 1/25/20 1/26/19 1/25/20 1/26/19 Sales Upholstery segment: Sales to external customers $ 262,835 $ 265,487 $ 746,851 $ 759,569 Intersegment sales 73,861 68,961 204,116 185,370 Upholstery segment sales 336,696 334,448 950,967 944,939 Casegoods segment: Sales to external customers 22,583 23,129 68,561 73,774 Intersegment sales 5,532 4,936 16,079 14,054 Casegoods segment sales 28,115 28,065 84,640 87,828 Retail segment sales 167,494 159,417 458,894 418,331 Corporate and Other: Sales to external customers 22,944 19,549 62,395 39,936 Intersegment sales 2,725 3,300 8,137 9,156 Corporate and Other sales 25,669 22,849 70,532 49,092 Eliminations (82,118 ) (77,197 ) (228,332 ) (208,580 ) Consolidated sales $ 475,856 $ 467,582 $ 1,336,701 $ 1,291,610 Operating Income (Loss) Upholstery segment $ 46,512 $ 34,566 $ 104,859 $ 90,602 Casegoods segment 2,534 3,332 7,336 10,173 Retail segment 16,383 14,158 33,272 25,179 Corporate and Other (13,116 ) (11,213 ) (40,131 ) (33,451 ) Consolidated operating income 52,313 40,843 105,336 92,503 Interest expense (265 ) (538 ) (891 ) (1,143 ) Interest income 844 540 2,093 1,534 Other income (expense), net (5,998 ) (941 ) (5,390 ) (2,046 ) Income before income taxes $ 46,894 $ 39,904 $ 101,148 $ 90,848 |
Income Taxes
Income Taxes | 9 Months Ended |
Jan. 25, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective tax rate was 26.0% and 25.3% for the third quarter and nine months ended January 25, 2020 , respectively. Our effective tax rate was 26.9% and 24.6% for the third quarter and nine months ended January 26, 2019 , respectively. Our effective tax rate varies from the 21% federal statutory rate primarily due to state taxes. Absent discrete adjustments, our effective tax rate in the third quarter of fiscal 2020 would have been 25.8% |
Earnings per Share
Earnings per Share | 9 Months Ended |
Jan. 25, 2020 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share Certain share-based compensation awards that entitle their holders to receive non-forfeitable dividends prior to vesting are considered participating securities. Prior to fiscal 2020 , we granted restricted stock awards that contained non-forfeitable rights to dividends on unvested shares, and we are required to include these participating securities in calculating our basic earnings per common share, using the two-class method. The restricted stock awards we granted in fiscal 2019 and fiscal 2020 do not have non-forfeitable rights to dividends and therefore are not considered participating securities. The dividends on the restricted stock awards granted in fiscal 2019 and fiscal 2020 are, and will continue to be held in escrow, until the stock awards vest at which time we will pay any accumulated dividends. The following is a reconciliation of the numerators and denominators we used in our computations of basic and diluted earnings per share: Quarter Ended Nine Months Ended (Unaudited, amounts in thousands) 1/25/20 1/26/19 1/25/20 1/26/19 Numerator (basic and diluted): Net income attributable to La-Z-Boy Incorporated $ 34,512 $ 28,731 $ 75,174 $ 67,046 Income allocated to participating securities (45 ) (92 ) (121 ) (231 ) Net income available to common Shareholders $ 34,467 $ 28,639 $ 75,053 $ 66,815 Denominator: Basic weighted average common shares outstanding 46,262 46,820 46,545 46,808 Add: Contingent common shares 148 131 147 135 Stock option dilution 174 140 175 269 Diluted weighted average common shares outstanding 46,584 47,091 46,867 47,212 Earnings per Share: Basic $ 0.75 $ 0.61 $ 1.61 $ 1.43 Diluted $ 0.74 $ 0.61 $ 1.60 $ 1.42 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 had outstanding options to purchase 0.3 million shares for the quarter and nine months ended January 25, 2020 , with a weighted average exercise price of $33.15 . We excluded the effect of these options from our diluted share calculation since the weighted average exercise price of the options was higher than the average market price and including the options’ effect would have been anti-dilutive. Similarly, we excluded options to purchase 0.4 million shares from the diluted share calculation for the quarter and nine months ended January 26, 2019 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Jan. 25, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Accounting standards require that we put financial assets and liabilities into one of three categories based on the inputs we use to value them: • Level 1 — Financial assets and liabilities the values of which are based on unadjusted quoted market prices for identical assets and liabilities in an active market that we have the ability to access. • Level 2 — Financial assets and liabilities the values of which are based on quoted prices in markets that are not active or on model inputs that are observable for substantially the full term of the asset or liability. • Level 3 — Financial assets and liabilities the values of which are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Accounting standards require that in making fair value measurements, we use observable market data when available. When inputs used to measure fair value fall within different levels of the hierarchy, we categorize the fair value measurement as being in the lowest level that is significant to the measurement. We recognize transfers between levels of the fair value hierarchy at the end of the reporting period in which they occur. In addition to assets and liabilities that we record at fair value on a recurring basis, we are required to record assets and liabilities at fair value on a non-recurring basis. We measure non-financial assets such as other intangible assets, goodwill, and other long-lived assets at fair value when there is an indicator of impairment, and we record them at fair value only when we recognize an impairment loss. The following table presents the fair value hierarchy for those assets and liabilities we measured at fair value on a recurring basis at January 25, 2020 and April 27, 2019 . There were no transfers into or out of Level 1, Level 2, or Level 3 for any of the periods presented. At January 25, 2020 Fair Value Measurements (Unaudited, amounts in thousands) Level 1 Level 2 Level 3 NAV(1) Total Assets Marketable securities $ 4 $ 33,417 $ — $ 7,372 $ 40,793 Held-to-maturity investments 3,542 — — — 3,542 Cost basis investments — — 6,479 — 6,479 Total assets $ 3,546 $ 33,417 $ 6,479 $ 7,372 $ 50,814 Liabilities Contingent consideration liability $ — $ — $ 7,900 $ — $ 7,900 At April 27, 2019 Fair Value Measurements (Unaudited, amounts in thousands) Level 1 Level 2 Level 3 NAV(1) Total Assets Marketable securities $ 5 $ 34,390 $ — $ 7,706 $ 42,101 Held-to-maturity investments 3,341 — — — 3,341 Cost basis investment — — 11,979 — 11,979 Total assets $ 3,346 $ 34,390 $ 11,979 $ 7,706 $ 57,421 Liabilities Contingent consideration liability $ — $ — $ 7,900 $ — $ 7,900 (1) Certain marketable securities investments are measured at fair value using net asset value per share under the practical expedient methodology. At January 25, 2020 and April 27, 2019 , we held marketable securities intended to enhance returns on our cash and to fund future obligations of our non-qualified defined benefit retirement plan, as well as marketable securities to fund future obligations of our executive deferred compensation plan and our performance compensation retirement plan. We also held other fixed income and cost basis investments. 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. At January 25, 2020 , our Level 3 assets included non-marketable preferred shares of two privately held start-up companies, and a warrant to purchase common shares of one of these privately held start-up companies. The fair value for our Level 3 investments is not readily determinable so we estimate the fair value as costs minus impairment, if any, plus or minus adjustments resulting from observable price changes in orderly transactions for identical or similar investments with the same issuer. During the quarter ended October 26, 2019 , we invested an additional $0.5 million in one of these privately held start-up companies. Subsequently and during the quarter ended January 25, 2020 , with respect to the same investee, we recorded an impairment charge of $6.0 million for the full carrying value as it was determined the value of the investment was not recoverable. For non-marketable equity investments, the measurement of fair value requires significant judgment and includes quantitative and qualitative analysis of identified events or circumstances that impact the fair value of the investment. Among other factors, we assessed the investee’s ability to meet business milestones, its financial condition and near-term prospects (including the rate at which the investee was using its cash), the investee’s need for possible additional funding at a lower valuation, and the competitive environment in which the investee operates its business. There were no other changes to the fair value of our Level 3 assets during the quarter and nine months ended January 25, 2020 . Our Level 3 liability includes our contingent consideration liability from the Joybird acquisition. We estimated the contingent consideration liability based on future revenues and earnings in fiscal 2021 and fiscal 2023. The fair value was determined using a variation of the income approach, known as the real options method, whereby revenue and earnings were simulated over the earn-out periods in a risk-neutral framework using Geometric Brownian Motion. For each simulation path, the potential earn-out payments were calculated based on management’s probability estimates for achievement of the revenue and earnings milestones and then were discounted to the valuation date using a discount rate of 4.2% for the fiscal 2021 milestone and 4.7% for the fiscal 2023 milestone. There were no changes to the fair value of our Level 3 liabilities during the first nine months of fiscal 2020. However, our integration efforts related to the acquired Joybird business are taking longer than anticipated. Consistent with our policy of testing of non-financial assets annually in the fourth quarter or more frequently, if an impairment indicator is identified, we will be undertaking a review of the Joybird business next quarter, which will include future revenue and earnings projections, and which could result in an adjustment to the fair value of the contingent consideration liability as well as intangible assets and goodwill related to Joybird. |
Basis of Presentation Basis of
Basis of Presentation Basis of Presentation (Policies) | 9 Months Ended |
Jan. 25, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recent accounting pronouncements | Accounting pronouncement adopted in fiscal 2020 The accounting standards update (“ASU”) described in the paragraph below had a significant impact on our accounting policies and our consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), requiring lessees to record all operating leases on their balance sheet. Under this standard, the lessee is required to record an asset for the right to use the underlying asset for the lease term and a corresponding liability for the contractual lease payments. We have adopted this standard in the first quarter of fiscal 2020 using the modified retrospective approach. See Note 5 for further information. The following table summarizes additional ASUs which were adopted in fiscal 2020 , but did not have a material impact on our accounting policies or our consolidated financial statements and related disclosures. ASU Description ASU 2017-06 Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting ASU 2017-12 Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities ASU 2018-02 Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ASU 2018-07 Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting ASU 2018-13 Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurements ASU 2018-16 Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes 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 2016-13 Financial Instruments – Credit losses (Topic 326): Measurement of Credit Losses on Financial Instruments Fiscal 2021 ASU 2018-14 Compensation – Retirement benefits – Defined Benefit Plans – General (Subtopic 715-20): Changes to the Disclosure Requirements for Defined Benefit Plans Fiscal 2022 ASU 2019-12 Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Fiscal 2022 ASU 2020-01 Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 325, and Topic 815 Fiscal 2022 |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 9 Months Ended |
Jan. 25, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of New Accounting Pronouncements Adopted and Not Yet Adopted | The following table summarizes additional ASUs which were adopted in fiscal 2020 , but did not have a material impact on our accounting policies or our consolidated financial statements and related disclosures. ASU Description ASU 2017-06 Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting ASU 2017-12 Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities ASU 2018-02 Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ASU 2018-07 Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting ASU 2018-13 Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurements ASU 2018-16 Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes 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 2016-13 Financial Instruments – Credit losses (Topic 326): Measurement of Credit Losses on Financial Instruments Fiscal 2021 ASU 2018-14 Compensation – Retirement benefits – Defined Benefit Plans – General (Subtopic 715-20): Changes to the Disclosure Requirements for Defined Benefit Plans Fiscal 2022 ASU 2019-12 Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Fiscal 2022 ASU 2020-01 Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 325, and Topic 815 Fiscal 2022 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Jan. 25, 2020 | |
Joybird | |
Business Acquisition [Line Items] | |
Summary of fair values at the dates of acquisition | The following table summarizes the purchase price allocation for Joybird at the date of acquisition: (Unaudited, amounts in thousands) Joybird Acquisition Fair value of consideration: Cash (paid at closing) $ 37,482 Guaranteed payment 22,489 Acquisition earn-out 7,500 Assumption of liability 5,000 Working capital adjustment (2,486 ) Total fair value of consideration 69,985 Amounts recognized for assets acquired and liabilities assumed: Inventory 5,258 Other current assets 3,733 Property, plant and equipment 2,057 Finite-lived tradename 6,400 Other long-term assets 3,647 Accounts payable (8,222 ) Customer deposits (13,904 ) Other current liabilities (7,681 ) Other long-term liabilities (150 ) Total identifiable net liabilities acquired (8,862 ) Goodwill $ 78,847 |
Restricted Cash (Tables)
Restricted Cash (Tables) | 9 Months Ended |
Jan. 25, 2020 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of cash, cash equivalents and restricted cash | We have restricted cash on deposit with a bank as collateral for certain letters of credit. All our letters of credit have maturity dates within the next twelve months, but we expect to renew some of these letters of credit when they mature. (Unaudited, amounts in thousands) 1/25/20 1/26/19 Cash and cash equivalents $ 166,272 $ 101,579 Restricted cash 1,973 2,003 Total cash, cash equivalents and restricted cash $ 168,245 $ 103,582 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Jan. 25, 2020 | |
Inventory Disclosure [Abstract] | |
Summary of inventories | A summary of inventories is as follows: (Unaudited, amounts in thousands) 1/25/20 4/27/19 Raw materials $ 96,010 $ 90,359 Work in process 14,055 13,728 Finished goods 110,168 114,478 FIFO inventories 220,233 218,565 Excess of FIFO over LIFO (21,666 ) (21,666 ) Total inventories $ 198,567 $ 196,899 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Jan. 25, 2020 | |
Leases [Abstract] | |
Schedule of supplemental balance sheet information | Supplemental balance sheet information related to leases: (Unaudited, amounts in thousands) 1/25/20 Operating leases ROU assets $ 318,124 Lease liabilities, short-term 65,089 Lease liabilities, long-term 267,955 Finance leases ROU assets $ 38 Lease liabilities, short-term 39 Lease liabilities, long-term — |
Schedule of ROU assets by segment | The ROU assets by segment are as follows: (Unaudited, amounts in thousands) 1/25/20 Upholstery $ 57,800 Casegoods 4,214 Retail 242,987 Corporate & Other 13,161 Total ROU assets $ 318,162 |
Schedule of components of lease cost | The components of lease cost are as follows for the respective periods ended January 25, 2020 : (Unaudited, amounts in thousands) Quarter Ended Nine Months Ended Operating lease cost $ 18,987 $ 57,024 Financing lease cost 40 139 Short-term lease cost 25 76 Variable lease cost 48 142 Less: Sublease income (633 ) (1,893 ) Total lease cost $ 18,467 $ 55,488 |
Schedule of supplemental lease disclosures | The following tables present supplemental lease disclosures: Nine Months Ended January 25, 2020 (Unaudited, amounts in thousands) Operating Leases Financing Leases Cash paid for amounts included in the measurement of lease liabilities $ 57,851 $ 138 Lease liabilities arising from new ROU assets 52,954 — 1/25/20 (Unaudited, amounts in thousands) Operating Leases Financing Leases Weighted-average remaining lease term (years) 6.7 0.5 Weighted-average discount rate 3.8 % 3.9 % |
Schedule of undiscounted cash flows and minimum contractual obligations | The following table presents our undiscounted cash flows as of January 25, 2020 , and our minimum contractual obligations on our leases as of April 27, 2019 : 1/25/20 4/27/19 (Unaudited, amounts in thousands) Operating Leases Financing Leases Operating Leases Financing Leases Within one year $ 76,348 $ 40 $ 76,508 $ 180 After one year and within two years 66,953 — 71,544 19 After two years and within three years 55,988 — 58,763 — After three years and within four years 44,375 — 46,541 — After four years and within five years 37,576 — 36,082 — After five years 95,660 — 102,782 — Total lease payments 376,900 40 $ 392,220 $ 199 Less: Interest 43,856 1 Total lease obligations $ 333,044 $ 39 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Jan. 25, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | We have goodwill on our consolidated balance sheet as follows: Reportable Segment/Unit Related Acquisition Upholstery segment Acquisition of the wholesale business in the United Kingdom and Ireland Retail segment Acquisitions of La-Z-Boy Furniture Galleries ® stores Corporate & Other Acquisition of Joybird The following is a roll-forward of goodwill for the nine months ended January 25, 2020 : (Unaudited, amounts in thousands) Upholstery Segment Retail Segment Corporate and Other Total Goodwill Balance at April 27, 2019 $ 12,148 $ 94,103 $ 79,616 $ 185,867 Acquisition adjustment — — (769 ) (769 ) Translation adjustment 148 82 — 230 Balance at January 25, 2020 $ 12,296 $ 94,185 $ 78,847 $ 185,328 |
Schedule of other intangible assets - Indefinite-lived | We have intangible assets on our consolidated balance sheet as follows: Reportable Segment/Unit Intangible Asset Useful Life Upholstery segment Primarily acquired customer relationships from our acquisition of the wholesale business in the United Kingdom and Ireland Amortizable over useful lives that do not exceed 15 years Casegoods segment American Drew ® trade name Indefinite-lived Retail segment Reacquired rights to own and operate La-Z-Boy Furniture Galleries ® stores Indefinite-lived Corporate & Other Joybird ® trade name Amortizable over eight-year useful life The following is a roll-forward of our other intangible assets for the nine months ended January 25, 2020 : (Unaudited, amounts in thousands) Indefinite- Lived Trade Names Finite- Lived Trade Name Indefinite- Lived Reacquired Rights Other Intangible Assets Total Other Intangible Assets Balance at April 27, 2019 $ 1,155 $ 5,801 $ 20,117 $ 2,834 $ 29,907 Amortization — (598 ) — (165 ) (763 ) Translation adjustment — — 62 29 91 Balance at January 25, 2020 $ 1,155 $ 5,203 $ 20,179 $ 2,698 $ 29,235 |
Schedule of other intangible assets - Amortizable | We have intangible assets on our consolidated balance sheet as follows: Reportable Segment/Unit Intangible Asset Useful Life Upholstery segment Primarily acquired customer relationships from our acquisition of the wholesale business in the United Kingdom and Ireland Amortizable over useful lives that do not exceed 15 years Casegoods segment American Drew ® trade name Indefinite-lived Retail segment Reacquired rights to own and operate La-Z-Boy Furniture Galleries ® stores Indefinite-lived Corporate & Other Joybird ® trade name Amortizable over eight-year useful life The following is a roll-forward of our other intangible assets for the nine months ended January 25, 2020 : (Unaudited, amounts in thousands) Indefinite- Lived Trade Names Finite- Lived Trade Name Indefinite- Lived Reacquired Rights Other Intangible Assets Total Other Intangible Assets Balance at April 27, 2019 $ 1,155 $ 5,801 $ 20,117 $ 2,834 $ 29,907 Amortization — (598 ) — (165 ) (763 ) Translation adjustment — — 62 29 91 Balance at January 25, 2020 $ 1,155 $ 5,203 $ 20,179 $ 2,698 $ 29,235 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Jan. 25, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of investments | The following summarizes our investments: (Unaudited, amounts in thousands) 1/25/20 4/27/19 Short-term investments: Marketable securities $ 18,891 $ 18,016 Held-to-maturity investments 3,542 3,341 Total short-term investments 22,433 21,357 Long-term investments: Marketable securities 21,902 24,085 Cost basis investments 6,479 11,979 Total long-term investments 28,381 36,064 Total investments $ 50,814 $ 57,421 Investments to enhance returns on cash $ 30,109 $ 31,470 Investments to fund compensation/retirement plans 14,226 13,972 Other investments 6,479 11,979 Total investments $ 50,814 $ 57,421 |
Summary of unrealized gains, unrealized losses, and fair value by investment type | The following is a summary of the unrealized gains, unrealized losses, and fair value by investment type: 1/25/20 4/27/19 (Unaudited, amounts in thousands) Gross Unrealized Gains Gross Unrealized Losses Fair Value Gross Unrealized Gains Gross Unrealized Losses Fair Value Equity securities $ 1,922 $ (6,000 ) $ 13,600 $ 1,841 $ — $ 19,535 Fixed income 199 (8 ) 31,962 75 (111 ) 33,217 Other 376 — 5,252 258 (13 ) 4,669 Total securities $ 2,497 $ (6,008 ) $ 50,814 $ 2,174 $ (124 ) $ 57,421 |
Summary of sales of marketable securities | The following table summarizes sales of marketable securities: Quarter Ended Nine Months Ended (Unaudited, amounts in thousands) 1/25/20 1/26/19 1/25/20 1/26/19 Proceeds from sales $ 11,517 $ 6,550 $ 23,887 $ 14,304 Gross realized gains 431 726 618 811 Gross realized losses (62 ) (261 ) (150 ) (327 ) |
Summary of fair value of fixed icome marketable securities | The following is a summary of the fair value of fixed income marketable securities, classified as available-for-sale securities, by contractual maturity: (Unaudited, amounts in thousands) 1/25/20 Within one year $ 19,041 Within two to five years 10,000 Within six to ten years 1,639 Thereafter 1,282 Total $ 31,962 |
Employee Benefits (Tables)
Employee Benefits (Tables) | 9 Months Ended |
Jan. 25, 2020 | |
Retirement Benefits [Abstract] | |
Schedule of net periodic pension costs | For the quarter and nine months ended January 26, 2019 , net periodic pension costs were as follows: Quarter Ended Nine Months Ended (Unaudited, amounts in thousands) 01/26/19 01/26/19 Service cost $ 223 $ 869 Interest cost 1,116 3,348 Expected return on plan assets (1,136 ) (3,408 ) Net amortization 639 1,917 Net periodic pension cost $ 842 $ 2,726 |
Product Warranties (Tables)
Product Warranties (Tables) | 9 Months Ended |
Jan. 25, 2020 | |
Product Warranties Disclosures [Abstract] | |
Reconciliation of changes in product warranty liability | A reconciliation of the changes in our product warranty liability is as follows: Quarter Ended Nine Months Ended (Unaudited, amounts in thousands) 01/25/20 01/26/19 01/25/20 01/26/19 Balance as of the beginning of the period $ 23,081 $ 25,197 $ 22,736 $ 21,205 Acquisitions — — — 4,100 Accruals during the period 6,321 5,660 17,746 16,270 Settlements during the period (6,057 ) (5,560 ) (17,137 ) (16,278 ) Balance as of the end of the period $ 23,345 $ 25,297 $ 23,345 $ 25,297 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Jan. 25, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of total stock-based compensation expense | The table below summarizes the total stock-based compensation expense we recognized for all outstanding grants in our consolidated statement of income: Quarter Ended Nine Months Ended (Unaudited, amounts in thousands) 01/25/20 01/26/19 01/25/20 01/26/19 Equity-based awards expense $ 2,528 $ 2,495 $ 7,235 $ 8,174 Liability-based awards expense (303 ) 144 37 10 Total stock-based compensation expense $ 2,225 $ 2,639 $ 7,272 $ 8,184 |
Fair value assumptions for stock options | We calculated the fair value of stock options granted during the first quarter of fiscal 2020 using the following assumptions: (Unaudited) Fiscal 2020 grant Risk-free interest rate 2.19 % Dividend rate 1.72 % Expected life in years 5.0 Stock price volatility 34.27 % Fair value per share $ 7.94 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Jan. 25, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedul of activity in accumulated other comprehensive loss | The activity in accumulated other comprehensive income (loss) for the quarters ended January 25, 2020 , and January 26, 2019 , is as follows: (Unaudited, amounts in thousands) Translation adjustment Change in fair value of cash flow hedge Unrealized gain (loss) on marketable securities Net pension amortization and net actuarial loss Accumulated other comprehensive loss Balance at October 26, 2019 $ 1,345 $ — $ 418 $ (4,231 ) $ (2,468 ) Changes before reclassifications 50 — 41 — 91 Amounts reclassified to net income — — (20 ) 55 35 Tax effect — — (5 ) (14 ) (19 ) Other comprehensive income attributable to La-Z-Boy Incorporated 50 — 16 41 107 Balance at January 25, 2020 $ 1,395 $ — $ 434 $ (4,190 ) $ (2,361 ) Balance at October 27, 2018 $ (24 ) $ (24 ) $ (197 ) $ (28,084 ) $ (28,329 ) Changes before reclassifications 800 — 72 — 872 Amounts reclassified to net income — 93 48 687 828 Tax effect — (23 ) (30 ) (172 ) (225 ) Other comprehensive income attributable to La-Z-Boy Incorporated 800 70 90 515 1,475 Balance at January 26, 2019 $ 776 $ 46 $ (107 ) $ (27,569 ) $ (26,854 ) The activity in accumulated other comprehensive income (loss) for the nine months ended January 25, 2020 , and January 26, 2019 , is as follows: (Unaudited, amounts in thousands) Translation adjustment Change in fair value of cash flow hedge Unrealized gain (loss) on marketable securities Net pension amortization and net actuarial loss Accumulated other comprehensive loss Balance at April 27, 2019 $ 50 $ 87 $ 6 $ (3,605 ) $ (3,462 ) Changes before reclassifications 1,345 — 253 — 1,598 Reclassification of certain income tax effects (1) — (97 ) 258 (708 ) (547 ) Amounts reclassified to net income — 14 (28 ) 164 150 Tax effect — (4 ) (55 ) (41 ) (100 ) Other comprehensive income (loss) attributable to La-Z-Boy Incorporated 1,345 (87 ) 428 (585 ) 1,101 Balance at January 25, 2020 $ 1,395 $ — $ 434 $ (4,190 ) $ (2,361 ) Balance at April 28, 2018 $ 2,388 $ 154 $ 1,376 $ (29,117 ) $ (25,199 ) Changes before reclassifications (1,612 ) (369 ) 175 — (1,806 ) Cumulative effect adjustment for investments (2) — — (1,637 ) — (1,637 ) Amounts reclassified to net income — 225 29 2,059 2,313 Tax effect — 36 (50 ) (511 ) (525 ) Other comprehensive income (loss) attributable to La-Z-Boy Incorporated (1,612 ) (108 ) (1,483 ) 1,548 (1,655 ) Balance at January 26, 2019 $ 776 $ 46 $ (107 ) $ (27,569 ) $ (26,854 ) (1) Income tax effects of the Tax Cuts and Jobs Act are reclassified from AOCI to retained earnings due to adoption of ASU 2018-02. (2) The cumulative effect adjustment for investments is composed of $2.1 million of unrealized gains on equity investments offset by $0.5 million of tax expense. We reclassified the net $1.6 million of cumulative effect adjustment from accumulated other comprehensive loss to retained earnings as a result of adopting ASU 2016-01. |
Schedule of components of non-controlling interest | The components of non-controlling interest were as follows: Quarter Ended Nine Months Ended (Unaudited, amounts in thousands) 1/25/20 1/26/19 1/25/20 1/26/19 Balance as of the beginning of the period $ 15,543 $ 13,411 $ 14,468 $ 13,035 Net income 204 443 434 1,428 Other comprehensive income (loss) (162 ) 669 683 60 Balance as of the end of the period $ 15,585 $ 14,523 $ 15,585 $ 14,523 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Jan. 25, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue by product category by segment or unit | The following table presents our revenue disaggregated by product category and by segment or unit: Quarter Ended January 25, 2020 (Unaudited, amounts in thousands) Upholstery Casegoods Retail Corporate and Other Total Motion Upholstery Furniture $ 212,079 $ — $ 100,662 $ — $ 312,741 Stationary Upholstery Furniture 96,429 4,131 33,348 29,094 163,002 Bedroom Furniture — 7,772 1,517 1,842 11,131 Dining Room Furniture — 5,981 3,040 596 9,617 Occasional Furniture 383 11,619 6,148 516 18,666 Other (1) 27,805 (1,388 ) 22,779 (6,379 ) 42,817 Total $ 336,696 $ 28,115 $ 167,494 $ 25,669 $ 557,974 Eliminations (82,118 ) Consolidated Net Sales $ 475,856 Quarter Ended January 26, 2019 Upholstery Casegoods Retail Corporate and Other Total Motion Upholstery Furniture $ 212,631 $ — $ 100,232 $ — $ 312,863 Stationary Upholstery Furniture 94,551 3,844 27,652 24,096 150,143 Bedroom Furniture — 7,447 1,586 1,296 10,329 Dining Room Furniture — 5,733 3,097 610 9,440 Occasional Furniture 391 12,292 5,959 338 18,980 Other (1) 26,875 (1,251 ) 20,891 (3,491 ) 43,024 Total $ 334,448 $ 28,065 $ 159,417 $ 22,849 $ 544,779 Eliminations (77,197 ) Consolidated Net Sales $ 467,582 (1) Primarily includes revenue for delivery, advertising, royalties, parts, accessories, after-treatment products, tariff surcharges, discounts & allowances, rebates and other sales incentives. Nine Months Ended January 25, 2020 (Unaudited, amounts in thousands) Upholstery Casegoods Retail Corporate and Other Total Motion Upholstery Furniture $ 588,820 $ — $ 270,301 $ — $ 859,121 Stationary Upholstery Furniture 281,699 12,873 96,306 79,477 470,355 Bedroom Furniture — 24,711 4,513 4,800 34,024 Dining Room Furniture — 17,656 8,036 1,436 27,128 Occasional Furniture 1,083 33,988 16,728 1,374 53,173 Other (1) 79,365 (4,588 ) 63,010 (16,555 ) 121,232 Total $ 950,967 $ 84,640 $ 458,894 $ 70,532 $ 1,565,033 Eliminations (228,332 ) Consolidated Net Sales $ 1,336,701 Nine Months Ended January 26, 2019 Upholstery Casegoods Retail Corporate and Other Total Motion Upholstery Furniture $ 602,458 $ — $ 260,924 $ — $ 863,382 Stationary Upholstery Furniture 272,087 12,215 76,517 47,791 408,610 Bedroom Furniture — 24,045 3,891 3,756 31,692 Dining Room Furniture — 18,068 7,293 1,429 26,790 Occasional Furniture 1,202 38,003 15,000 828 55,033 Other (1) 69,192 (4,503 ) 54,706 (4,712 ) 114,683 Total $ 944,939 $ 87,828 $ 418,331 $ 49,092 $ 1,500,190 Eliminations (208,580 ) Consolidated Net Sales $ 1,291,610 (1) |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Jan. 25, 2020 | |
Segment Reporting [Abstract] | |
Schedule of segment information | The following table presents sales and operating income (loss) by segment: Quarter Ended Nine Months Ended (Unaudited, amounts in thousands) 1/25/20 1/26/19 1/25/20 1/26/19 Sales Upholstery segment: Sales to external customers $ 262,835 $ 265,487 $ 746,851 $ 759,569 Intersegment sales 73,861 68,961 204,116 185,370 Upholstery segment sales 336,696 334,448 950,967 944,939 Casegoods segment: Sales to external customers 22,583 23,129 68,561 73,774 Intersegment sales 5,532 4,936 16,079 14,054 Casegoods segment sales 28,115 28,065 84,640 87,828 Retail segment sales 167,494 159,417 458,894 418,331 Corporate and Other: Sales to external customers 22,944 19,549 62,395 39,936 Intersegment sales 2,725 3,300 8,137 9,156 Corporate and Other sales 25,669 22,849 70,532 49,092 Eliminations (82,118 ) (77,197 ) (228,332 ) (208,580 ) Consolidated sales $ 475,856 $ 467,582 $ 1,336,701 $ 1,291,610 Operating Income (Loss) Upholstery segment $ 46,512 $ 34,566 $ 104,859 $ 90,602 Casegoods segment 2,534 3,332 7,336 10,173 Retail segment 16,383 14,158 33,272 25,179 Corporate and Other (13,116 ) (11,213 ) (40,131 ) (33,451 ) Consolidated operating income 52,313 40,843 105,336 92,503 Interest expense (265 ) (538 ) (891 ) (1,143 ) Interest income 844 540 2,093 1,534 Other income (expense), net (5,998 ) (941 ) (5,390 ) (2,046 ) Income before income taxes $ 46,894 $ 39,904 $ 101,148 $ 90,848 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Jan. 25, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of numerators and denominators used in the computation of basic and diluted earnings per share | The following is a reconciliation of the numerators and denominators we used in our computations of basic and diluted earnings per share: Quarter Ended Nine Months Ended (Unaudited, amounts in thousands) 1/25/20 1/26/19 1/25/20 1/26/19 Numerator (basic and diluted): Net income attributable to La-Z-Boy Incorporated $ 34,512 $ 28,731 $ 75,174 $ 67,046 Income allocated to participating securities (45 ) (92 ) (121 ) (231 ) Net income available to common Shareholders $ 34,467 $ 28,639 $ 75,053 $ 66,815 Denominator: Basic weighted average common shares outstanding 46,262 46,820 46,545 46,808 Add: Contingent common shares 148 131 147 135 Stock option dilution 174 140 175 269 Diluted weighted average common shares outstanding 46,584 47,091 46,867 47,212 Earnings per Share: Basic $ 0.75 $ 0.61 $ 1.61 $ 1.43 Diluted $ 0.74 $ 0.61 $ 1.60 $ 1.42 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Jan. 25, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair value hierarchy for assets and liabilities measured at fair value on a recurring basis | The following table presents the fair value hierarchy for those assets and liabilities we measured at fair value on a recurring basis at January 25, 2020 and April 27, 2019 . There were no transfers into or out of Level 1, Level 2, or Level 3 for any of the periods presented. At January 25, 2020 Fair Value Measurements (Unaudited, amounts in thousands) Level 1 Level 2 Level 3 NAV(1) Total Assets Marketable securities $ 4 $ 33,417 $ — $ 7,372 $ 40,793 Held-to-maturity investments 3,542 — — — 3,542 Cost basis investments — — 6,479 — 6,479 Total assets $ 3,546 $ 33,417 $ 6,479 $ 7,372 $ 50,814 Liabilities Contingent consideration liability $ — $ — $ 7,900 $ — $ 7,900 At April 27, 2019 Fair Value Measurements (Unaudited, amounts in thousands) Level 1 Level 2 Level 3 NAV(1) Total Assets Marketable securities $ 5 $ 34,390 $ — $ 7,706 $ 42,101 Held-to-maturity investments 3,341 — — — 3,341 Cost basis investment — — 11,979 — 11,979 Total assets $ 3,346 $ 34,390 $ 11,979 $ 7,706 $ 57,421 Liabilities Contingent consideration liability $ — $ — $ 7,900 $ — $ 7,900 (1) Certain marketable securities investments are measured at fair value using net asset value per share under the practical expedient methodology. |
Basis of Presentation - Plant C
Basis of Presentation - Plant Closing (Details) $ in Thousands | Aug. 08, 2019USD ($)ft²employee | Jan. 25, 2020USD ($)employee | Jan. 26, 2019USD ($) |
Plant Closing | |||
Aggregate selling price | $ 11,242 | $ 447 | |
Cost of Sales | |||
Plant Closing | |||
Severance costs | $ 5,300 | ||
Redlands, California | |||
Plant Closing | |||
Number of employees | employee | 350 | ||
Area of land | ft² | 200,000 | ||
Aggregate selling price | $ 10,800 | ||
Gain on sale of the property | $ 9,700 | ||
Redlands, California | Product Concentration Risk | La-Z-Boy branded business total upholstery production and manufactures recliners, motion sofas and classics (high-leg recliners) | |||
Plant Closing | |||
Percentage of production | 10.00% | ||
Newton, Mississippi | |||
Plant Closing | |||
Number of employees | employee | 525 | ||
Number of employees impacted by transition of Newton Leather Cut-and-sew operation | employee | 105 |
Basis of Presentation - VIE (De
Basis of Presentation - VIE (Details) - Variable interest entities, not primary beneficiary | Jan. 25, 2020company |
Investments | |
Preferred share investments, number of privately-held companies | 2 |
Preferred share investments with common share warrant, number of privately-held companies | 1 |
Basis of Presentation Basis o_2
Basis of Presentation Basis of Presentation - Subsequent Events (Details) $ in Thousands | Feb. 18, 2020customer | Jan. 25, 2020USD ($) | Apr. 27, 2019USD ($) |
Subsequent Event [Line Items] | |||
Trade receivable before potential credit losses | $ 153,721 | $ 143,288 | |
Customer Exploring Options With Creditors | |||
Subsequent Event [Line Items] | |||
Trade receivable before potential credit losses | $ 7,000 | ||
Customer Exploring Options With Creditors | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Number of customers | customer | 1 |
Acquisitions - Corporate and Ot
Acquisitions - Corporate and Other (Details) $ in Thousands | Jul. 30, 2018USD ($)founderinstallmentopportunity | Jan. 25, 2020USD ($) | Apr. 27, 2019USD ($) |
Amounts recognized for assets acquired and liabilities assumed: | |||
Goodwill | $ 185,328 | $ 185,867 | |
Joybird | |||
Business Acquisition [Line Items] | |||
Total guaranteed payments | $ 75,000 | ||
Prepaid compensation included in guaranteed payments | $ 7,500 | ||
Period for payment of liabilities assumed as consideration | 2 years | ||
Remaining guaranteed payments | $ 25,000 | ||
Number of annual installments | installment | 5 | ||
Annual installments of remaining guaranteed payments | $ 5,000 | ||
Number of future earnout opportunities | opportunity | 2 | ||
Number of co-founders covered by forfeitable initial payment | founder | 4 | ||
Number of years for early resign | 2 years | ||
Period for amortization of prepaid compensation | 2 years | ||
Finite-lived intangible asset, useful life | 8 years | ||
Contingent consideration, low end of range | $ 0 | ||
Contingent consideration, high end of range | 65,000 | ||
Fair value of consideration: | |||
Cash (paid at closing) | 37,482 | ||
Guaranteed payment | 22,489 | ||
Acquisition earn-out | 7,500 | ||
Assumption of liability | 5,000 | ||
Working capital adjustment | (2,486) | ||
Total fair value of consideration | 69,985 | ||
Amounts recognized for assets acquired and liabilities assumed: | |||
Inventory | 5,258 | ||
Other current assets | 3,733 | ||
Property, plant and equipment | 2,057 | ||
Finite-lived tradename | 6,400 | ||
Other long-term assets | 3,647 | ||
Accounts payable | (8,222) | ||
Customer deposits | (13,904) | ||
Other current liabilities | (7,681) | ||
Other long-term liabilities | (150) | ||
Total identifiable net liabilities acquired | (8,862) | ||
Goodwill | $ 78,847 |
Restricted Cash (Details)
Restricted Cash (Details) - USD ($) $ in Thousands | Jan. 25, 2020 | Apr. 27, 2019 | Jan. 26, 2019 | Apr. 28, 2018 |
Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 166,272 | $ 129,819 | $ 101,579 | |
Restricted cash | 1,973 | 1,968 | 2,003 | |
Total cash, cash equivalents and restricted cash | $ 168,245 | $ 131,787 | $ 103,582 | $ 136,871 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jan. 25, 2020 | Apr. 27, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 96,010 | $ 90,359 |
Work in process | 14,055 | 13,728 |
Finished goods | 110,168 | 114,478 |
FIFO inventories | 220,233 | 218,565 |
Excess of FIFO over LIFO | (21,666) | (21,666) |
Total inventories | $ 198,567 | $ 196,899 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Jan. 25, 2020 | Apr. 27, 2019 |
Operating leases | ||
Operating leases, ROU assets | $ 318,124 | |
Operating lease liabilities, short-term | 65,089 | |
Operating lease liabilities, long-term | 267,955 | $ 0 |
Finance leases | ||
Finance lease, ROU assets | 38 | |
Finance lease liabilities, short-term | 39 | |
Finance lease, liabilities, long-term | $ 0 |
Leases - ROU Assets by Segment
Leases - ROU Assets by Segment (Details) - USD ($) $ in Thousands | Jan. 25, 2020 | Apr. 27, 2019 |
Leases | ||
Total ROU assets | $ 318,162 | $ 0 |
Upholstery | ||
Leases | ||
Total ROU assets | 57,800 | |
Casegoods | ||
Leases | ||
Total ROU assets | 4,214 | |
Retail | ||
Leases | ||
Total ROU assets | 242,987 | |
Corporate & Other | ||
Leases | ||
Total ROU assets | $ 13,161 |
Leases - Lease cost (Details)
Leases - Lease cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Jan. 25, 2020 | Jan. 25, 2020 | |
Lease cost | ||
Operating lease cost | $ 18,987 | $ 57,024 |
Financing lease cost | 40 | 139 |
Short-term lease cost | 25 | 76 |
Variable lease cost | 48 | 142 |
Less: Sublease income | (633) | (1,893) |
Total lease cost | $ 18,467 | $ 55,488 |
Leases - Supplemental Lease Dis
Leases - Supplemental Lease Disclosures (Details) $ in Thousands | 9 Months Ended |
Jan. 25, 2020USD ($) | |
Leases [Abstract] | |
Cash paid for amounts included in the measurement of lease liabilities, operating | $ 57,851 |
Cash paid for amounts included in the measurement of lease liabilities, financing | 138 |
Lease liabilities arising from new ROU assets, operating | $ 52,954 |
Lease term and discount rate | |
Operating lease, Weighted-average remaining lease term (years) | 6 years 8 months 12 days |
Finance lease, Weighted-average remaining lease term (years) | 15 days |
Operating Lease, Weighted-average discount rate | 3.80% |
Finance lease, Weighted-average discount rate | 3.90% |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Jan. 25, 2020 | Apr. 27, 2019 |
Operating Leases | ||
Within one year | $ 76,348 | |
After one year and within two years | 66,953 | |
After two years and within three years | 55,988 | |
After three years and within four years | 44,375 | |
After four years and within five years | 37,576 | |
After five years | 95,660 | |
Total lease payments | 376,900 | |
Less: Interest | 43,856 | |
Total lease obligations | 333,044 | |
Within one year | $ 76,508 | |
After one year and within two years | 71,544 | |
After two years and within three years | 58,763 | |
After three years and within four years | 46,541 | |
After four years and within five years | 36,082 | |
After five years | 102,782 | |
Total lease payments | 392,220 | |
Financing Leases | ||
Within one year | 40 | |
After one year and within two years | 0 | |
After two years and within three years | 0 | |
After three years and within four years | 0 | |
After four years and within five years | 0 | |
After five years | 0 | |
Total lease payments | 40 | |
Less: Interest | 1 | |
Total lease obligations | $ 39 | |
Within one year | 180 | |
After one year and within two years | 19 | |
After two years and within three years | 0 | |
After three years and within four years | 0 | |
After four years and within five years | 0 | |
After five years | 0 | |
Total lease payments | $ 199 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Schedule of Goodwill (Details) $ in Thousands | 9 Months Ended |
Jan. 25, 2020USD ($) | |
Roll-forward of goodwill | |
Balance at beginning of period | $ 185,867 |
Acquisition adjustment | (769) |
Translation adjustment | 230 |
Balance at end of period | 185,328 |
Upholstery Segment | |
Roll-forward of goodwill | |
Balance at beginning of period | 12,148 |
Acquisition adjustment | 0 |
Translation adjustment | 148 |
Balance at end of period | 12,296 |
Retail Segment | |
Roll-forward of goodwill | |
Balance at beginning of period | 94,103 |
Acquisition adjustment | 0 |
Translation adjustment | 82 |
Balance at end of period | 94,185 |
Corporate and Other | |
Roll-forward of goodwill | |
Balance at beginning of period | 79,616 |
Acquisition adjustment | (769) |
Translation adjustment | 0 |
Balance at end of period | $ 78,847 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Intangible Assets (Details) $ in Thousands | 9 Months Ended |
Jan. 25, 2020USD ($) | |
Roll-forward of other intangible assets | |
Balance at beginning of period | $ 29,907 |
Amortization | (763) |
Translation adjustment | 91 |
Balance at end of period | 29,235 |
Finite- Lived Trade Name | |
Roll-forward of other intangible assets | |
Balance at beginning of period | 5,801 |
Amortization | (598) |
Balance at end of period | 5,203 |
Other Intangible Assets | |
Roll-forward of other intangible assets | |
Balance at beginning of period | 2,834 |
Amortization | (165) |
Translation adjustment | 29 |
Balance at end of period | 2,698 |
Finite- Lived Trade Name | |
Roll-forward of other intangible assets | |
Balance at beginning of period | 1,155 |
Balance at end of period | 1,155 |
Indefinite- Lived Reacquired Rights | |
Roll-forward of other intangible assets | |
Balance at beginning of period | 20,117 |
Translation adjustment | 62 |
Balance at end of period | $ 20,179 |
Upholstery Segment | Maximum | |
Other intangible assets | |
Useful life | 15 years |
Corporate and Other | |
Other intangible assets | |
Useful life | 8 years |
Investments - Other Investments
Investments - Other Investments (Details) $ in Millions | 3 Months Ended |
Jan. 25, 2020USD ($)company | |
Investments | |
Other-than-temporary impairment recognized | $ | $ 6 |
Level 3 | |
Investments | |
Preferred share investments, number of privately-held companies | 2 |
Number of privately-held companies impaired | 1 |
Investments - Components (Detai
Investments - Components (Details) - USD ($) $ in Thousands | Jan. 25, 2020 | Apr. 27, 2019 |
Investments | ||
Total investments | $ 50,814 | $ 57,421 |
Investments to enhance returns on cash | ||
Investments | ||
Total investments | 30,109 | 31,470 |
Investments to fund compensation/retirement plans | ||
Investments | ||
Total investments | 14,226 | 13,972 |
Other investments | ||
Investments | ||
Total investments | 6,479 | 11,979 |
Short-term investments | ||
Investments | ||
Marketable securities | 18,891 | 18,016 |
Held-to-maturity investments | 3,542 | 3,341 |
Total investments | 22,433 | 21,357 |
Long-term investments | ||
Investments | ||
Marketable securities | 21,902 | 24,085 |
Cost basis investments | 6,479 | 11,979 |
Total investments | $ 28,381 | $ 36,064 |
Investments - Unrealized Gains
Investments - Unrealized Gains and Losses and Fair Value (Details) - USD ($) $ in Thousands | Jan. 25, 2020 | Apr. 27, 2019 |
Summary of investments | ||
Gross Unrealized Gains | $ 2,497 | $ 2,174 |
Gross Unrealized Losses | (6,008) | (124) |
Fair Value | 50,814 | 57,421 |
Equity securities | ||
Summary of investments | ||
Gross Unrealized Gains | 1,922 | 1,841 |
Fair Value | 13,600 | 19,535 |
Fixed income | ||
Summary of investments | ||
Gross Unrealized Gains | 199 | 75 |
Gross Unrealized Losses | (8) | (111) |
Fair Value | 31,962 | 33,217 |
Other | ||
Summary of investments | ||
Gross Unrealized Gains | 376 | 258 |
Gross Unrealized Losses | 0 | (13) |
Fair Value | $ 5,252 | $ 4,669 |
Investments - Sales and Maturit
Investments - Sales and Maturities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jan. 25, 2020 | Jan. 26, 2019 | Jan. 25, 2020 | Jan. 26, 2019 | |
Sales of marketable securities | ||||
Proceeds from sales | $ 11,517 | $ 6,550 | $ 23,887 | $ 14,304 |
Gross realized gains | 431 | 726 | 618 | 811 |
Gross realized losses | (62) | $ (261) | (150) | $ (327) |
Fair value of available-for-sale securities by contractual maturity | ||||
Within one year | 19,041 | 19,041 | ||
Within two to five years | 10,000 | 10,000 | ||
Within six to ten years | 1,639 | 1,639 | ||
Thereafter | 1,282 | 1,282 | ||
Total | $ 31,962 | $ 31,962 |
Employee Benefits - Pension (De
Employee Benefits - Pension (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Jan. 26, 2019 | Jan. 26, 2019 | |
Net periodic pension costs | ||
Service cost | $ 223 | $ 869 |
Interest cost | 1,116 | 3,348 |
Expected return on plan assets | (1,136) | (3,408) |
Net amortization | 639 | 1,917 |
Net periodic pension cost | $ 842 | $ 2,726 |
Employee Benefits Employee Bene
Employee Benefits Employee Benefits - Narratives (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 25, 2020 | Oct. 26, 2019 | |
Schedule of Compensation Related Costs [Line Items] | ||
Refund for overpaid benefit obligations | $ 1.9 | |
Non-cash gain due to change in employee vacation policy | $ 5.1 | |
Cost of Sales | ||
Schedule of Compensation Related Costs [Line Items] | ||
Non-cash gain due to change in employee vacation policy | 1.3 | |
Incremental expense due to change in employee vacation policy | $ 0.3 |
Product Warranties (Details)
Product Warranties (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jan. 25, 2020 | Jan. 26, 2019 | Jan. 25, 2020 | Jan. 26, 2019 | Apr. 27, 2019 | |
Reconciliation of changes in product warranty liability | |||||
Balance as of the beginning of the period | $ 23,081 | $ 25,197 | $ 22,736 | $ 21,205 | |
Acquisitions | 0 | 0 | 0 | 4,100 | |
Accruals during the period | 6,321 | 5,660 | 17,746 | 16,270 | |
Settlements during the period | (6,057) | (5,560) | (17,137) | (16,278) | |
Balance as of the end of the period | 23,345 | $ 25,297 | 23,345 | $ 25,297 | |
Product warranty liability accrued | $ 14,300 | $ 14,300 | $ 13,900 | ||
Minimum | Upholstery | |||||
Product Warranties | |||||
Percentage of warranty liability relating to the segment | 90.00% | ||||
Fabric and leather | Upholstery | |||||
Product Warranties | |||||
Warranty term (in years) | 1 year | ||||
Cushions and padding | Minimum | Upholstery | |||||
Product Warranties | |||||
Warranty term (in years) | 1 year | ||||
Cushions and padding | Maximum | Upholstery | |||||
Product Warranties | |||||
Warranty term (in years) | 10 years | ||||
Labor costs relating to parts | Upholstery | |||||
Product Warranties | |||||
Warranty term (in years) | 1 year |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jan. 25, 2020 | Jan. 26, 2019 | Jan. 25, 2020 | Jan. 26, 2019 | |
Stock-based compensation expense recognized for outstanding grants | ||||
Equity-based awards expense | $ 2,528 | $ 2,495 | $ 7,235 | $ 8,174 |
Liability-based awards expense | (303) | 144 | 37 | 10 |
Total stock-based compensation expense | $ 2,225 | $ 2,639 | $ 7,272 | $ 8,184 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) - Stock Options - $ / shares | 3 Months Ended | 9 Months Ended |
Jul. 27, 2019 | Jan. 25, 2020 | |
Stock-Based Compensation | ||
Shares granted (in shares) | 248,662 | |
Fair value assumptions | ||
Risk-free interest rate | 2.19% | |
Dividend rate | 1.72% | |
Expected life in years | 5 years | |
Stock price volatility | 34.27% | |
Fair value per share (in dollars per share) | $ 7.94 | |
Minimum | ||
Stock-Based Compensation | ||
Vesting period | 1 year | |
Period of recognition of expenses for retirement-eligible employees from the grant date | 10 months | |
Maximum | ||
Stock-Based Compensation | ||
Vesting period | 4 years |
Stock-Based Compensation - SARs
Stock-Based Compensation - SARs (Details) - Stock Appreciation Rights | 9 Months Ended |
Jan. 25, 2020$ / sharesshares | |
Stock-Based Compensation | |
Term of award | 10 years |
Fiscal 2013 Grant | |
Stock-Based Compensation | |
Number of awards outstanding (in shares) | shares | 7,149 |
Fair value per share (in dollars per share) | $ / shares | $ 20.59 |
Fiscal 2014 Grant | |
Stock-Based Compensation | |
Number of awards outstanding (in shares) | shares | 13,869 |
Fair value per share (in dollars per share) | $ / shares | $ 13.50 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock and RSUs (Details) - $ / shares | 3 Months Ended | 9 Months Ended |
Oct. 26, 2019 | Jan. 25, 2020 | |
Restricted Stock | ||
Stock-Based Compensation | ||
Number of shares or units granted (in shares) | 166,649 | |
Fair value per share (in dollars per share) | $ 30.41 | |
Percentage vesting each year from date of grant | 25.00% | |
Period from grant date for first vesting | 1 year | |
Vesting period | 4 years | |
Restricted Stock Units (RSUs) | ||
Stock-Based Compensation | ||
Number of shares or units granted (in shares) | 28,332 | |
Fair value per share (in dollars per share) | $ 31.77 |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Awards (Details) - $ / shares | 3 Months Ended | 9 Months Ended |
Jul. 27, 2019 | Jan. 25, 2020 | |
Performance-Based Shares | ||
Stock-Based Compensation | ||
Number of shares or units granted (in shares) | 155,605 | |
Performance Awards | ||
Stock-Based Compensation | ||
Percentage of payout dependent on financial performance | 80.00% | |
Percentage of payout dependent on total shareholder return | 20.00% | |
Performance awards, performance period | 3 years | |
Performance Awards | Minimum | ||
Stock-Based Compensation | ||
Performance award opportunity as a percentage of target award | 50.00% | |
Performance Awards | Maximum | ||
Stock-Based Compensation | ||
Performance award opportunity as a percentage of target award | 200.00% | |
Performance-Based Shares, vesting based on performance goals | Fiscal 2019 Grant | ||
Stock-Based Compensation | ||
Granted (in dollars per share) | $ 28.68 | |
Performance Based Shares, vesting based on market conditions | Fiscal 2019 Grant | ||
Stock-Based Compensation | ||
Granted (in dollars per share) | $ 38.75 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Jan. 25, 2020 | Jul. 27, 2019 | Jan. 26, 2019 | Jul. 28, 2018 | Jan. 25, 2020 | Jan. 26, 2019 | |
Activity in accumulated other comprehensive loss | ||||||
Beginning balance | $ 710,742 | $ 696,976 | $ 649,231 | $ 625,216 | $ 696,976 | $ 625,216 |
Changes before reclassifications | 91 | 872 | 1,598 | (1,806) | ||
Reclassification of certain income tax effects/Cumulative effect adjustment for investments | (547) | (1,637) | ||||
Amounts reclassified to net income | 35 | 828 | 150 | 2,313 | ||
Tax effect | (19) | (225) | (100) | (525) | ||
Other comprehensive income (loss) attributable to La-Z-Boy Incorporated | 107 | 1,475 | 1,101 | (1,655) | ||
Ending balance | 729,482 | 698,138 | 671,786 | 626,664 | 729,482 | 671,786 |
Components of non-controlling interest | ||||||
Balance as of the beginning of the period | 15,543 | 14,468 | 13,411 | 13,035 | 14,468 | 13,035 |
Net income | 204 | 443 | 434 | 1,428 | ||
Other comprehensive income (loss) | (162) | 669 | 683 | 60 | ||
Balance as of the end of the period | 15,585 | 14,523 | 15,585 | 14,523 | ||
ASU 2016-01 - Investments | ||||||
Activity in accumulated other comprehensive loss | ||||||
Reclassification of certain income tax effects/Cumulative effect adjustment for investments | 0 | |||||
Translation adjustment | ||||||
Activity in accumulated other comprehensive loss | ||||||
Beginning balance | 1,345 | 50 | (24) | 2,388 | 50 | 2,388 |
Changes before reclassifications | 50 | 800 | 1,345 | (1,612) | ||
Other comprehensive income (loss) attributable to La-Z-Boy Incorporated | 50 | 800 | 1,345 | (1,612) | ||
Ending balance | 1,395 | 776 | 1,395 | 776 | ||
Change in fair value of cash flow hedge | ||||||
Activity in accumulated other comprehensive loss | ||||||
Beginning balance | 0 | 87 | (24) | 154 | 87 | 154 |
Changes before reclassifications | 0 | (369) | ||||
Reclassification of certain income tax effects/Cumulative effect adjustment for investments | (97) | |||||
Amounts reclassified to net income | 0 | 93 | 14 | 225 | ||
Tax effect | 0 | (23) | (4) | 36 | ||
Other comprehensive income (loss) attributable to La-Z-Boy Incorporated | 0 | 70 | (87) | (108) | ||
Ending balance | 0 | 46 | 0 | 46 | ||
Unrealized gain (loss) on marketable securities | ||||||
Activity in accumulated other comprehensive loss | ||||||
Beginning balance | 418 | 6 | (197) | 1,376 | 6 | 1,376 |
Changes before reclassifications | 41 | 72 | 253 | 175 | ||
Reclassification of certain income tax effects/Cumulative effect adjustment for investments | 258 | (1,637) | ||||
Amounts reclassified to net income | (20) | 48 | (28) | 29 | ||
Tax effect | (5) | (30) | (55) | (50) | ||
Other comprehensive income (loss) attributable to La-Z-Boy Incorporated | 16 | 90 | 428 | (1,483) | ||
Ending balance | 434 | (107) | 434 | (107) | ||
Unrealized gain (loss) on marketable securities | ASU 2016-01 - Investments | ||||||
Activity in accumulated other comprehensive loss | ||||||
Reclassification of certain income tax effects/Cumulative effect adjustment for investments | 1,600 | |||||
Cumulative effect on retained earnings, tax | 500 | |||||
Cumulative effect on retained earnings, before tax | 2,100 | |||||
Net pension amortization and net actuarial loss | ||||||
Activity in accumulated other comprehensive loss | ||||||
Beginning balance | (4,231) | (3,605) | (28,084) | (29,117) | (3,605) | (29,117) |
Reclassification of certain income tax effects/Cumulative effect adjustment for investments | (708) | |||||
Amounts reclassified to net income | 55 | 687 | 164 | 2,059 | ||
Tax effect | (14) | (172) | (41) | (511) | ||
Other comprehensive income (loss) attributable to La-Z-Boy Incorporated | 41 | 515 | (585) | 1,548 | ||
Ending balance | (4,190) | (27,569) | (4,190) | (27,569) | ||
Accumulated other comprehensive loss | ||||||
Activity in accumulated other comprehensive loss | ||||||
Beginning balance | (2,468) | (3,462) | (28,329) | (25,199) | (3,462) | (25,199) |
Ending balance | $ (2,361) | $ (3,728) | $ (26,854) | (29,573) | $ (2,361) | $ (26,854) |
Accumulated other comprehensive loss | ASU 2016-01 - Investments | ||||||
Activity in accumulated other comprehensive loss | ||||||
Reclassification of certain income tax effects/Cumulative effect adjustment for investments | $ (1,637) |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jan. 25, 2020 | Jan. 26, 2019 | Jan. 25, 2020 | Jan. 26, 2019 | |
Revenue Recognition | ||||
Consolidated net sales | $ 475,856 | $ 467,582 | $ 1,336,701 | $ 1,291,610 |
Upholstery | ||||
Revenue Recognition | ||||
Consolidated net sales | 262,835 | 265,487 | 746,851 | 759,569 |
Casegoods | ||||
Revenue Recognition | ||||
Consolidated net sales | 22,583 | 23,129 | 68,561 | 73,774 |
Retail | ||||
Revenue Recognition | ||||
Consolidated net sales | 167,494 | 159,417 | 458,894 | 418,331 |
Corporate & Other | ||||
Revenue Recognition | ||||
Consolidated net sales | 22,944 | 19,549 | 62,395 | 39,936 |
Operating Segments | ||||
Revenue Recognition | ||||
Consolidated net sales | 557,974 | 544,779 | 1,565,033 | 1,500,190 |
Operating Segments | Motion Upholstery Furniture | ||||
Revenue Recognition | ||||
Consolidated net sales | 312,741 | 312,863 | 859,121 | 863,382 |
Operating Segments | Stationary Upholstery Furniture | ||||
Revenue Recognition | ||||
Consolidated net sales | 163,002 | 150,143 | 470,355 | 408,610 |
Operating Segments | Bedroom Furniture | ||||
Revenue Recognition | ||||
Consolidated net sales | 11,131 | 10,329 | 34,024 | 31,692 |
Operating Segments | Dining Room Furniture | ||||
Revenue Recognition | ||||
Consolidated net sales | 9,617 | 9,440 | 27,128 | 26,790 |
Operating Segments | Occasional Furniture | ||||
Revenue Recognition | ||||
Consolidated net sales | 18,666 | 18,980 | 53,173 | 55,033 |
Operating Segments | Other | ||||
Revenue Recognition | ||||
Consolidated net sales | 42,817 | 43,024 | 121,232 | 114,683 |
Operating Segments | Upholstery | ||||
Revenue Recognition | ||||
Consolidated net sales | 336,696 | 334,448 | 950,967 | 944,939 |
Operating Segments | Upholstery | Motion Upholstery Furniture | ||||
Revenue Recognition | ||||
Consolidated net sales | 212,079 | 212,631 | 588,820 | 602,458 |
Operating Segments | Upholstery | Stationary Upholstery Furniture | ||||
Revenue Recognition | ||||
Consolidated net sales | 96,429 | 94,551 | 281,699 | 272,087 |
Operating Segments | Upholstery | Occasional Furniture | ||||
Revenue Recognition | ||||
Consolidated net sales | 383 | 391 | 1,083 | 1,202 |
Operating Segments | Upholstery | Other | ||||
Revenue Recognition | ||||
Consolidated net sales | 27,805 | 26,875 | 79,365 | 69,192 |
Operating Segments | Casegoods | ||||
Revenue Recognition | ||||
Consolidated net sales | 28,115 | 28,065 | 84,640 | 87,828 |
Operating Segments | Casegoods | Stationary Upholstery Furniture | ||||
Revenue Recognition | ||||
Consolidated net sales | 4,131 | 3,844 | 12,873 | 12,215 |
Operating Segments | Casegoods | Bedroom Furniture | ||||
Revenue Recognition | ||||
Consolidated net sales | 7,772 | 7,447 | 24,711 | 24,045 |
Operating Segments | Casegoods | Dining Room Furniture | ||||
Revenue Recognition | ||||
Consolidated net sales | 5,981 | 5,733 | 17,656 | 18,068 |
Operating Segments | Casegoods | Occasional Furniture | ||||
Revenue Recognition | ||||
Consolidated net sales | 11,619 | 12,292 | 33,988 | 38,003 |
Operating Segments | Casegoods | Other | ||||
Revenue Recognition | ||||
Consolidated net sales | (1,388) | (1,251) | (4,588) | (4,503) |
Operating Segments | Retail | ||||
Revenue Recognition | ||||
Consolidated net sales | 167,494 | 159,417 | 458,894 | 418,331 |
Operating Segments | Retail | Motion Upholstery Furniture | ||||
Revenue Recognition | ||||
Consolidated net sales | 100,662 | 100,232 | 270,301 | 260,924 |
Operating Segments | Retail | Stationary Upholstery Furniture | ||||
Revenue Recognition | ||||
Consolidated net sales | 33,348 | 27,652 | 96,306 | 76,517 |
Operating Segments | Retail | Bedroom Furniture | ||||
Revenue Recognition | ||||
Consolidated net sales | 1,517 | 1,586 | 4,513 | 3,891 |
Operating Segments | Retail | Dining Room Furniture | ||||
Revenue Recognition | ||||
Consolidated net sales | 3,040 | 3,097 | 8,036 | 7,293 |
Operating Segments | Retail | Occasional Furniture | ||||
Revenue Recognition | ||||
Consolidated net sales | 6,148 | 5,959 | 16,728 | 15,000 |
Operating Segments | Retail | Other | ||||
Revenue Recognition | ||||
Consolidated net sales | 22,779 | 20,891 | 63,010 | 54,706 |
Corporate and Other | Corporate & Other | ||||
Revenue Recognition | ||||
Consolidated net sales | 25,669 | 22,849 | 70,532 | 49,092 |
Corporate and Other | Corporate & Other | Stationary Upholstery Furniture | ||||
Revenue Recognition | ||||
Consolidated net sales | 29,094 | 24,096 | 79,477 | 47,791 |
Corporate and Other | Corporate & Other | Bedroom Furniture | ||||
Revenue Recognition | ||||
Consolidated net sales | 1,842 | 1,296 | 4,800 | 3,756 |
Corporate and Other | Corporate & Other | Dining Room Furniture | ||||
Revenue Recognition | ||||
Consolidated net sales | 596 | 610 | 1,436 | 1,429 |
Corporate and Other | Corporate & Other | Occasional Furniture | ||||
Revenue Recognition | ||||
Consolidated net sales | 516 | 338 | 1,374 | 828 |
Corporate and Other | Corporate & Other | Other | ||||
Revenue Recognition | ||||
Consolidated net sales | (6,379) | (3,491) | (16,555) | (4,712) |
Eliminations | ||||
Revenue Recognition | ||||
Consolidated net sales | (82,118) | (77,197) | (228,332) | (208,580) |
Eliminations | Upholstery | ||||
Revenue Recognition | ||||
Consolidated net sales | 73,861 | 68,961 | 204,116 | 185,370 |
Eliminations | Casegoods | ||||
Revenue Recognition | ||||
Consolidated net sales | 5,532 | 4,936 | 16,079 | 14,054 |
Eliminations | Corporate & Other | ||||
Revenue Recognition | ||||
Consolidated net sales | $ 2,725 | $ 3,300 | $ 8,137 | $ 9,156 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Jan. 25, 2020 | Jan. 25, 2020 | Apr. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |||
Other receivables, included in other current assets | $ 25.3 | $ 25.3 | $ 17 |
Customer deposits, included in accrued expenses and other current liabilities | 60.9 | 60.9 | 42.8 |
Deferred revenues, included in accrued expenses and other current liabilities | 25.3 | 25.3 | $ 17 |
Revenue recognized related to contract liabilities | $ 0.5 | $ 55 |
Segment Information - Reportabl
Segment Information - Reportable and Operating Segments (Details) | 9 Months Ended |
Jan. 25, 2020storebrandsegment | |
Upholstery Segment | |
Segment Information | |
Number of operating segments | 2 |
Number of reportable segments | 1 |
Casegoods Segment | |
Segment Information | |
Number of operating segments | 1 |
Number of brands | brand | 3 |
Retail Segment | |
Segment Information | |
Number of operating segments | 1 |
Number of Stores | store | 155 |
Segment Information - Income St
Segment Information - Income Statement Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jan. 25, 2020 | Jan. 26, 2019 | Jan. 25, 2020 | Jan. 26, 2019 | |
Segment Information | ||||
Sales | $ 475,856 | $ 467,582 | $ 1,336,701 | $ 1,291,610 |
Operating Income (Loss) | 52,313 | 40,843 | 105,336 | 92,503 |
Interest expense | (265) | (538) | (891) | (1,143) |
Interest income | 844 | 540 | 2,093 | 1,534 |
Other expense, net | (5,998) | (941) | (5,390) | (2,046) |
Income before income taxes | 46,894 | 39,904 | 101,148 | 90,848 |
Upholstery Segment | ||||
Segment Information | ||||
Sales | 262,835 | 265,487 | 746,851 | 759,569 |
Casegoods Segment | ||||
Segment Information | ||||
Sales | 22,583 | 23,129 | 68,561 | 73,774 |
Retail Segment | ||||
Segment Information | ||||
Sales | 167,494 | 159,417 | 458,894 | 418,331 |
Corporate & Other | ||||
Segment Information | ||||
Sales | 22,944 | 19,549 | 62,395 | 39,936 |
Operating Segments | ||||
Segment Information | ||||
Sales | 557,974 | 544,779 | 1,565,033 | 1,500,190 |
Operating Segments | Upholstery Segment | ||||
Segment Information | ||||
Sales | 336,696 | 334,448 | 950,967 | 944,939 |
Operating Income (Loss) | 46,512 | 34,566 | 104,859 | 90,602 |
Operating Segments | Casegoods Segment | ||||
Segment Information | ||||
Sales | 28,115 | 28,065 | 84,640 | 87,828 |
Operating Income (Loss) | 2,534 | 3,332 | 7,336 | 10,173 |
Operating Segments | Retail Segment | ||||
Segment Information | ||||
Sales | 167,494 | 159,417 | 458,894 | 418,331 |
Operating Income (Loss) | 16,383 | 14,158 | 33,272 | 25,179 |
Corporate and Other | ||||
Segment Information | ||||
Operating Income (Loss) | (13,116) | (11,213) | (40,131) | (33,451) |
Corporate and Other | Corporate & Other | ||||
Segment Information | ||||
Sales | 25,669 | 22,849 | 70,532 | 49,092 |
Eliminations | ||||
Segment Information | ||||
Sales | (82,118) | (77,197) | (228,332) | (208,580) |
Eliminations | Upholstery Segment | ||||
Segment Information | ||||
Sales | 73,861 | 68,961 | 204,116 | 185,370 |
Eliminations | Casegoods Segment | ||||
Segment Information | ||||
Sales | 5,532 | 4,936 | 16,079 | 14,054 |
Eliminations | Corporate & Other | ||||
Segment Information | ||||
Sales | $ 2,725 | $ 3,300 | $ 8,137 | $ 9,156 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 9 Months Ended | ||
Jan. 25, 2020 | Jan. 26, 2019 | Jan. 25, 2020 | Jan. 26, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate (as a percent) | 26.00% | 26.90% | 25.30% | 24.60% |
Statutory tax rate (as a percent) | 21.00% | |||
Effective tax rate absent discrete adjustments (as a percent) | 25.80% |
Earnings per Share - Reconcilia
Earnings per Share - Reconciliation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jan. 25, 2020 | Jan. 26, 2019 | Jan. 25, 2020 | Jan. 26, 2019 | |
Numerator (basic and diluted): | ||||
Net income attributable to La-Z-Boy Incorporated | $ 34,512 | $ 28,731 | $ 75,174 | $ 67,046 |
Income allocated to participating securities | (45) | (92) | (121) | (231) |
Net income available to common Shareholders | $ 34,467 | $ 28,639 | $ 75,053 | $ 66,815 |
Denominator: | ||||
Basic weighted average common shares outstanding (in shares) | 46,262 | 46,820 | 46,545 | 46,808 |
Add: | ||||
Contingent common shares (in shares) | 148 | 131 | 147 | 135 |
Stock option dilution (in shares) | 174 | 140 | 175 | 269 |
Diluted weighted average common shares outstanding (in shares) | 46,584 | 47,091 | 46,867 | 47,212 |
Basic (in dollars per share) | $ 0.75 | $ 0.61 | $ 1.61 | $ 1.43 |
Diluted (in dollars per share) | $ 0.74 | $ 0.61 | $ 1.60 | $ 1.42 |
Earnings per Share - Antidiluti
Earnings per Share - Antidilutive Securities (Details) - $ / shares shares in Millions | 3 Months Ended | 9 Months Ended | |
Jan. 25, 2020 | Jan. 25, 2020 | Jan. 26, 2019 | |
Anti-dilutive options | |||
Outstanding options excluded from diluted share calculation (in shares) | 0.4 | 0.4 | |
Outstanding options | |||
Anti-dilutive options | |||
Outstanding options excluded from diluted share calculation (in shares) | 0.3 | 0.3 | |
Antidilutive options excluded from diluted share calculation, weighted average exercise price (in dollars per share) | $ 33.15 | $ 33.15 |
Fair Value Measurements - Hiera
Fair Value Measurements - Hierarchy and Transfers (Details) - USD ($) $ in Thousands | Jan. 25, 2020 | Apr. 27, 2019 |
Assets | ||
Total assets | $ 50,814 | $ 57,421 |
Recurring basis | ||
Assets | ||
Marketable securities | 40,793 | 42,101 |
Held-to-maturity investments | 3,542 | 3,341 |
Cost basis investments | 6,479 | 11,979 |
Total assets | 50,814 | 57,421 |
Liabilities | ||
Contingent consideration liability | 7,900 | 7,900 |
Recurring basis | Level 1 | ||
Assets | ||
Marketable securities | 4 | 5 |
Held-to-maturity investments | 3,542 | 3,341 |
Total assets | 3,546 | 3,346 |
Recurring basis | Level 2 | ||
Assets | ||
Marketable securities | 33,417 | 34,390 |
Total assets | 33,417 | 34,390 |
Recurring basis | Level 3 | ||
Assets | ||
Cost basis investments | 6,479 | 11,979 |
Total assets | 6,479 | 11,979 |
Liabilities | ||
Contingent consideration liability | 7,900 | 7,900 |
Recurring basis | NAV | ||
Assets | ||
Marketable securities | 7,372 | 7,706 |
Total assets | $ 7,372 | $ 7,706 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 Investments (Details) - Level 3 $ in Millions | 3 Months Ended | 9 Months Ended | |
Jan. 25, 2020USD ($)company | Oct. 26, 2019USD ($) | Jan. 25, 2020company | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Preferred share investments, number of privately-held companies | company | 2 | 2 | |
Preferred share investments with common share warrant, number of privately-held companies | company | 1 | 1 | |
Increase in fair value of investment | $ | $ 0.5 | ||
Impairment charge for carrying value | $ | $ 6 | ||
Joybird | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Discount rate for fiscal 2021 milestone contingent consideration | 4.20% | ||
Discount rate for fiscal 2023 milestone contingent consideration | 4.70% |