Episode Details

La-Z-Boy (LZB) Q1 FY2027 — LZB released Q1 FY2027 AFTER THE CLOSE on Tuesday August 18 (Form 8-K 0000057131-26-000034 accepted 20:16:32 ET, Form 10-Q 0000057131-26-000035 at 20:20:21 ET; call 8:30 a.m. ET Wednesday Aug 19). The reaction session is Wednesday Aug 19: the shares GAPPED to USD33.70 against Tuesday's USD40.83 close, never traded back to that level, and CLOSED USD33.91 - a fall of 16.95 pct on 2,648,955 shares, 6.80x the 30-session average of 389,686. That is the THIRD-LARGEST single-session decline in 2,512 sessions of tape since 2016, behind only August 2017 (20.16 pct) and February 2022 (17.26 pct). NOTE the vendor EOD changePercent for that session reads PLUS 0.64 because it is measured from the OPEN, not the prior close - it carries the WRONG SIGN. La-Z-Boy Incorporated is a 99-year-old US residential furniture group based in Monroe, Michigan, reporting two segments - Wholesale (manufacturing, over 90 pct of product made in North America) and Retail (company-owned La-Z-Boy Stores) - plus Corporate and Other, which carries Joybird. It is a US domestic filer reporting US GAAP. Q1 FY2027 sales were USD475.7M against USD492.2M, down 3.4 pct, or down 1 pct excluding the divested Casegoods wholesale business. GAAP diluted EPS was a LOSS of USD0.06 and ADJUSTED diluted EPS USD0.43, against USD0.47 a year ago and a published bar of USD0.49. THE CALL: BUY (3/5, MEDIUM - THE CHANNEL MATH IS REAL AND THE TAPE JUST PRICED THE BEAR CASE) — base-case value ~$38.97 vs ~$33.91 today. KEY METRICS: - PRINT: Q1 sales USD475.7M (down 3.4 pct) - BELOW the USD490M floor of management's own June guide. Adjusted operating margin 3.9 pct against a 4.0-5.5 pct guided range and 4.8 pct a year ago. Adjusted EPS USD0.43 vs USD0.47 and a USD0.49 bar. The GAAP loss is two Mexican plant closures, USD17.6M. - ANGLE: Note 11 strikes intersegment sales at market prices, so the factory margin is identical either way. On the same USD228.6M of consumer revenue the company-owned channel earned USD21.9M of adjusted operating profit against USD7.1M through a dealer - 3.07x. External wholesale sales fell 14.3 pct while sales to its OWN stores rose 6.7 pct. - CALL: BUY 3/5. Fair value USD38.97 vs USD33.91 (plus 14.9 pct), cross-checked at USD38.67 on a separate discounted cash flow. 11.3x trailing adjusted earnings, 9.0x net of USD6.67 a share of cash, no external debt, a 2.85 pct dividend. The Q2 guide puts the seasonally STRONGEST quarter on the same 4.0-5.5 pct margin band as the weakest. What to watch: UP: a Q2 FY2027 print at the top of BOTH the USD500-520M sales range and the 4.0-5.5 pct adjusted operating-margin range; a second consecutive POSITIVE written same-store sales figure; visible pace on the USD291.2M open repurchase authorisation, which is 21.4 pct of the market value. DOWN: adjusted operating margin settling at the 5.5 pct top of the guided band as the new normal; capital spending running to the USD110M top of the guide with free cash flow still negative; Joybird written orders staying down double digits. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.