FLa-Z-Boy furniture stores are to expand following a recent acquisition in the southeast. (Photo by Smith Collection/Gado/Getty Images)
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What a difference a few days make, even for that most horizontal of retailers, La-Z-Boy Inc.
The Michigan-based company that has come to define the recliner chair sector was feeling anything but relaxed when its shares plummeted earlier this week after setting guidance below expectations.
Come post-trading on Friday those shares were heading upright once again after the intervention of President Trump – who else? – who warned that furniture tariffs were coming along the line once his administration had completed a 50-day investigation into the sector.
But La-Z-Boy, unlike competitors such as Wayfair, Restoration Hardware and Williams Sonoma, manufactures primarily in the U.S. and as a result is unlikely to be impacted by any tariff threats, which was enough to boost its stock right back.
So what exactly happened in an unexpectedly turbulent week for La-Z-Boy?
First up, the furniture manufacturer reported a mixed set of results for its fiscal first quarter 2026, with total sales declining 1% year-over-year to $492 million. While the company’s retail segment drove growth, posting a 5% increase in overall sales and a 2% gain in delivered sales, the wholesale segment improved a paltry 1%.
Adjusted operating margin narrowed to 4.8% from 6.6% a year prior, and adjusted earnings per share dropped 24% to $0.47 versus a $0.53 analyst consensus. Cash flow from operations totaled $36 million, while $22 million was returned to shareholders through dividends and buybacks.
The retail division consists of nearly 210 company-owned La-Z-Boy Furniture Galleries stores and is part of a broader network of nearly 370 La-Z-Boy stores. Joybird, an omni-channel retailer and manufacturer of modern upholstered furniture, has 14 stores in the U.S., with one new store opened in fiscal Q2 2026.
La-Z-Boy Warns on Earnings
In its trading update, the company highlighted a planned acquisition of 15 stores in the southeast, expected to close October, and a successful transition of its Arizona distribution center to a new west coast hub.
But looking ahead, La-Z-Boy forecast Q2 sales between $510 million and $530 million, with even the upper figure short of the consensus expectation of $532 million.
“While continuing to advance our Century Vision strategy and drive long-term shareholder value, we are balancing our optimism in the long-term industry fundamentals and our competitive positioning with a pragmatic approach to current uneven consumer demand. In addition to strengthening our core business, we are also evaluating all alternatives to address financial pressure from non-core parts of our enterprise,” CEO Melinda Whittington admitted in a company statement.
“Our iconic brand, vertically integrated business model, and robust balance sheet are foundational to our continued strategic growth and position us to disproportionately benefit when industry tailwinds reemerge,” she added.
La-Z-Boy Furniture Galleries stores could benefit from U.S. manufacture. (Photo by Justin Sullivan/Getty Images)
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Come Friday and, enter stage left, the Trump administration announced that it had launched an investigation into imported furniture, setting the stage for new tariffs on a broad range of products.
“Within the next 50 days, that Investigation will be completed, and Furniture coming from other Countries into the United States will be Tariffed at a Rate yet to be determined,” Trump wrote on his Truth Social platform. “This will bring the Furniture Business back to North Carolina, South Carolina, Michigan, and States all across the Union.”
La-Z-Boy To Ride Tariffs
While new tariffs could ramp up costs for many major furniture brands, La-Z-Boy has most of its manufacturing located in the U.S., even though it was unclear Friday whether any new tariffs on furniture would be applied on top of country specific tariff rates.
But any new tariffs would come at a challenging time for the U.S. furniture industry.
Companies like Wayfair have been seeing demand weaken for some time on big ticket furniture items, in part because of a slower overall housing market in the U.S. as buyers wait for The Fed to drop interest rates. With fewer new homes being bought, inevitably consumers have fewer reasons to buy new furniture.
But don’t tell La-Z-Boy, the company that saw its stock recline and then rise in a distinctly strange week even for U.S. retail right now.
Source: https://www.forbes.com/sites/markfaithfull/2025/08/24/la-z-boy-sees-stock-down-then-up-as-tarrif-threats-boost-prospects/
