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La-Z-Boy (LZB +1%) is trading roughly flat after wrapping up FY25 on a mixed note. This furniture retailer and manufacturer missed slightly on EPS for Q4 (Apr), but revenue grew 3.1% yr/yr to $570.9 mln, which was above the high end of prior guidance of $545-565 mln. However, the mid-point of Q1 (Jul) revenue guidance at $490-510 mln was light of analyst expectations. In fairness, Q1 is generally LZB's lowest sales and margin quarter of the year.

• The growth driver in Q4 was its Retail segment, with delivered revs up 8% yr/yr to $247 mln, led by new stores and acquisitions. During the quarter, LZB opened its 200th company-owned La-Z-Boy Furniture Galleries store, and it now owns 55% of the total network. Written same-store sales for Retail declined -5%, a notable drop from +7% in Q3 and -1% in Q2. LZB cited continued weakness in industry traffic, partially offset by higher average ticket and design sales.
• Wholesale segment sales (includes intersegment sales) increased 2% to $402 mln, driven by growth in its core North America La-Z-Boy wholesale business partially offset by the continued impact of a significant customer transition in its international wholesale business.
• In its digitally-native Joybird business, written sales trends decreased 21% yr/yr in Q4. LZB believes the Joybird consumer has been more significantly impacted by rising macro uncertainty and that this pressure is likely to persist in the near term. LZB says it's making appropriate adjustments to navigate during this time. Notably, LZB is seeing relatively stronger written trends in its Joybird physical stores where it can more fully serve the consumer.
• LZB said that stubbornly high mortgage rates and increased volatility in the economy negatively influenced consumer sentiment in Q4, which, hurt industry traffic. LZB expects economic uncertainty to continue challenging consumers in the near term. However, management noted that La-Z-Boy is an iconic brand in a highly fragmented market and it has navigated challenging times throughout its history. Also, a strong balance sheet helps.
• In terms of tariffs, approximately 90% of LZB's upholstered units sold in North America are produced in the US, with its Mexican operations supporting most of the balance. The vast majority of the products produced and exported out of Mexico are US MCA compliant and therefore not subject to tariffs. So that does not seem to be a big issue for them.

Overall, this was a pretty mixed quarter. Sales were much stronger than expected, especially later in the quarter. However, EPS was a bit weak and the guidance could have been better. Unfortunately, LZB is being impacted by a constrained consumer, who is looking at the macro picture and holding off on buying new furniture. Also, new home purchases are usually a big catalyst to buy new furniture, but the housing market is slow. So this is a rough time for LZB.