LA-Z-BOY INC (LZB)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

We have prepared this Management’s Discussion and Analysis as an aid to understanding our financial results. It should be read in conjunction with the accompanying Consolidated Financial Statements and related Notes to Consolidated Financial Statements. After a cautionary note regarding forward-looking statements, we begin with an introduction to our key businesses and then provide discussions of our results of operations, liquidity and capital resources, and critical accounting policies.

Cautionary Note Regarding Forward-Looking Statements

La-Z-Boy Incorporated and its subsidiaries (individually and collectively, "we," "our," "us," "La-Z-Boy" or the "Company") make "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, forward-looking statements include information concerning expectations, projections or trends relating to our results of operations, financial results, financial condition, strategic initiatives and plans, acquisitions, expenses, dividends, share repurchases, liquidity, use of cash and cash requirements, borrowing capacity, investments, future economic performance, and our business and industry.

Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements may include words such as "aim," "anticipates," "believes," "continues," "estimates," "expects," "feels," "forecasts," "hopes," "intends," "likely," "non-recurring," "one-time," "outlook," "plans," "projects," "seeks," "short-term," "target," "unusual," or words of similar meaning, or future or conditional verbs, such as "will," "should," "could," or "may." A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. You should not place undue reliance on forward-looking statements, which speak to our views only as of the date of this report. These forward-looking statements are all based on currently available operating, financial, and competitive information and are subject to various risks and uncertainties, many of which are unforeseeable and beyond our control. Additional risks and uncertainties that we do not presently know about or that we currently consider to be immaterial may also affect our business operations and financial performance.

Our actual future results and trends may differ materially from those we anticipate depending on a variety of factors, including, but not limited to, the risks and uncertainties discussed in our Annual Report for the fiscal year ended April 26, 2025, under Item 1A, "Risk Factors" and Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and in our other filings with the Securities and Exchange Commission ("SEC"). Given these risks and uncertainties, you should not rely on forward-looking statements as a prediction of actual results. Any or all of the forward-looking statements contained in our Annual Report for the fiscal year ended April 26, 2025 or any other public statement made by us, including by our management, may turn out to be incorrect. We are including this cautionary note to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or for any other reason.

Introduction

Our Business

We are the leading global producer of reclining chairs and one of the largest manufacturers/distributors of residential furniture in the United States. The La-Z-Boy Stores retail network is the third largest retailer of single-branded furniture in the United States. We manufacture, market, import, export, distribute and retail upholstery furniture products under the La-Z-Boy®, England, Kincaid®, and Joybird® tradenames. In addition, we import, distribute and retail accessories and casegoods (wood) furniture products under the Kincaid®, American Drew®, Hammary®, and Joybird® tradenames.

As of January 24, 2026, our supply chain operations included the following:

•Five major manufacturing locations and 11 distribution centers in the United States and three facilities in Mexico to support our speed-to-market and customization strategy

•A logistics company that distributes a portion of our products in the United States

•An upholstery manufacturing business in the United Kingdom. As of the end of the third quarter of fiscal 2026, we are in the process of closing this business and we expect to cease production by the end of fiscal 2026.

•A wholesale sales office that is responsible for distribution of our product in the United Kingdom and Ireland

•A global trading company in Hong Kong that helps us manage our Asian supply chain by establishing and maintaining relationships with our Asian suppliers, as well as identifying efficiencies and savings opportunities

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We also participate in two consolidated joint ventures in Thailand that support our international businesses: one that operates a manufacturing facility and another that operates a wholesale sales office. Additionally, we have contracts with several suppliers in Asia to produce products that support our pure import model for casegoods.

We sell our products through multiple channels: to furniture retailers or distributors in the United States, Canada, and approximately 50 other countries, including the United Kingdom, China, Australia, South Korea and New Zealand, directly to consumers through retail stores that we own and operate, and through our websites, www.la-z-boy.com and www.joybird.com.

•The centerpiece of our retail distribution strategy is our network of 374 La-Z-Boy Stores, over 500 La-Z-Boy Comfort Studio® locations, and nearly 900 La-Z-Boy branded space locations, each dedicated to marketing our La-Z-Boy branded products. We consider this dedicated space to be "proprietary."

◦La-Z-Boy Stores help consumers furnish their homes by combining the style, comfort, and quality of La-Z-Boy furniture with our available design services. We own 226 of the La-Z-Boy Stores, while the remainder are independently owned and operated.

◦La-Z-Boy Comfort Studio® locations are defined spaces within larger independent retailers that are dedicated to displaying and selling La-Z-Boy branded products, while La-Z-Boy branded space locations display a curated selection of La-Z-Boy branded products within larger independent dealers. All La-Z-Boy Comfort Studio® locations and La-Z-Boy branded space locations are independently owned and operated.

◦In total, we have approximately 7.7 million square feet of proprietary floor space dedicated to selling La-Z-Boy branded products in North America within our La-Z-Boy Stores and La-Z-Boy Comfort Studio® locations.

◦We also have approximately 2.6 million square feet of floor space outside of North America dedicated to selling La-Z-Boy branded products.

•Our other brands, England, American Drew, Hammary, and Kincaid enjoy distribution through many of the same outlets, with over half of Hammary’s sales originating through the La-Z-Boy Store network.

◦Kincaid and England have their own dedicated proprietary in-store programs with 685 outlets and approximately 2.0 million square feet of proprietary floor space.

◦During the second quarter of fiscal 2026, the Company committed to a plan to dispose a portion of our Casegoods wholesale business. Refer to Note 4, Assets Held for Sale, to our consolidated financial statements for further information.

•Joybird sells product online and has 15 small-format stores in key markets.

Century Vision Strategy

Our goal is to deliver value to our shareholders over the long term by executing our Century Vision, our strategic plan for growth to our centennial year in 2027, in which we aim to grow sales and market share and strengthen our operating margins. The foundation of our strategic plan is to drive disproportionate growth of our two consumer brands, La-Z-Boy and Joybird, by delivering the transformational power of comfort with a consumer-first approach. We plan to drive growth in the following ways:

Expanding the La-Z-Boy brand reach

•Leveraging our connection to comfort and reinvigorating our brand with a consumer focus and expanded omni-channel presence. Our strategic initiatives to leverage and reinvigorate our iconic La-Z-Boy brand center on a renewed focus on leveraging the compelling La-Z-Boy comfort message, accelerating our omni-channel offering, and identifying additional consumer-base growth opportunities. We leverage our consumer insights to develop and deliver on-trend upholstered furniture, particularly in the motion and reclining categories. We launched our brand campaign and marketing platform in fiscal 2024, Long Live the Lazy, with compelling, consumer inspired, messaging designed to increase recognition and consideration of the brand. We expect that this messaging will enhance the appeal of our brand with a broader consumer base. Further, our goal is to connect with consumers along their purchase journey through multiple means, whether online or in person. We are driving change throughout our digital platforms to improve the user experience, with a specific focus on the ease with which customers browse through our broad product assortment, customize products to their liking, find stores to make a purchase, or purchase at www.la-z-boy.com.

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•Growing our La-Z-Boy Store network. We expect our strategic initiatives in this area to generate growth in our Retail segment through an increased company-owned store count and in our Wholesale segment as our proprietary distribution network expands. We are not only focused on growing the number of locations, but also on upgrading existing store locations to our new concept designs. We are prioritizing growth of our company-owned Retail business by opportunistically acquiring existing La-Z-Boy Stores and opening new La-Z-Boy Stores where we see opportunity for growth, or where we believe we have opportunities for further market penetration.

•Expanding the reach of our wholesale distribution channels. Consumers experience the La-Z-Boy brand in many channels including the La-Z-Boy Store network, the La-Z-Boy Comfort Studio® locations, our store-within-a-store format, and La-Z-Boy branded space locations. While consumers increasingly interact with the brand digitally, our consumers also demonstrate an affinity for visiting our stores to shop, allowing us to frequently deliver the flagship La-Z-Boy Store, La-Z-Boy Comfort Studio®, or La-Z-Boy branded space experience and provide design services. In addition to our branded distribution channels, approximately 1,900 other dealers sell La-Z-Boy products, which include some of the best-known names in the industry, providing us the benefit of multi-channel distribution. We believe there is significant growth potential for our consumer brands through these retail channels.

Profitably growing the Joybird brand

•Profitably growing the Joybird brand with a digital-first consumer experience. Joybird is a leading omni-channel, direct to consumer retailer and manufacturer of upholstered furniture. We believe that Joybird is a brand with significant potential and our strategic initiatives in this area focus on fueling profitable growth through the opening of additional small-format stores in key markets, an increase in digital marketing spend to drive awareness and customer acquisition, ongoing investments in technology, and an expansion of product assortment.

Enhancing our enterprise capabilities

•Enhancing our enterprise capabilities to support the growth of our consumer brands and enable potential

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

We have prepared this Management's Discussion and Analysis as an aid to understanding our financial results. It should be read in conjunction with the accompanying Consolidated Financial Statements and related Notes to Consolidated Financial Statements. It also includes management’s analysis of past financial results and certain potential factors that may affect future results, potential future risks and approaches that may be used to manage those risks. Refer to "Cautionary Note Regarding Forward-Looking Statements” at the beginning of this report for a discussion of factors that may cause results to differ materially. Note that our 2026, 2025 and 2024 fiscal years all included 52 weeks.

Introduction

Our Business

We are the leading global producer of reclining chairs and one of the largest manufacturers/distributors of residential furniture in the United States. The La-Z-Boy Stores retail network is the second largest retailer of single-branded furniture in the United States. We manufacture, market, import, export, distribute and retail upholstery furniture products under the La-Z-Boy®, England, and Joybird® tradenames. In addition, we import, distribute and retail accessories and casegoods (wood) furniture products under the Hammary® and Joybird® tradenames. During fiscal 2026, we also imported, distributed, and retailed accessories and casegoods (wood) furniture products under the Kincaid® and American Drew® tradenames, and following the completion of the sale of certain assets of the Kincaid® and American Drew® wholesale businesses on May 29, 2026, we continue to retail such products. Refer to Note 4, Assets Held for Sale and Note 21, Subsequent Events, to our consolidated financial statements for further information.

For additional information about our business, refer to Part I, Item 1, Business of this report.

Century Vision Strategy

As La-Z-Boy approaches its centennial anniversary in 2027, we remain focused on executing our Century Vision strategy to grow sales and market share through growth of our consumer brands, La-Z-Boy and Joybird, and sustainably grow our operating margin well beyond this milestone year. Building on a century of innovation, comfort, craftsmanship, and consumer

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trust, we are working to leverage our iconic brand to expand market reach and strengthen our engagement with consumers, dealers and partners. Through continued investment in brand evolution, retail expansion, digital transformation, innovation, and consumer insights, we aim to deliver the transformational power of comfort to future generations with a consumer-first approach while honoring our almost 100 year heritage that has made La-Z-Boy one of America's most recognized and enduring brands. Our Century Vision strategy continues to have significant runway and we are executing through the following initiatives:

Expanding the La-Z-Boy brand reach

•Leveraging our connection to comfort and reinvigorating our brand with a consumer focus, expanded omni-channel presence, and digital transformation. Our strategic initiatives to leverage and reinvigorate our iconic La-Z-Boy brand center on a renewed focus on leveraging the compelling La-Z-Boy comfort message, accelerating our omni-channel offering, and identifying additional consumer-base growth opportunities. We leverage our consumer insights to develop and deliver meaningful product innovation, particularly in the motion and reclining categories. We also utilize consumer insights to optimize our messaging and marketing campaigns to increase recognition and consideration of La-Z-Boy among both existing and prospective customers. Our Long Live the Lazy campaign, launched in 2024, continues to resonate through its compelling, consumer-inspired message. In 2025, we successfully launched a refreshed brand identity - the first significant evolution of the La-Z-Boy brand in more than two decades - designed to modernize the brand, enhance differentiation, and strengthen relevance with a broader consumer audience across retail and digital footprints. Further, our goal is to connect with consumers along their purchase journey through multiple means, whether online or in person. We are driving change throughout our digital platforms to improve the user experience, with a specific focus on the ease with which customers browse through our broad product assortment, customize products to their liking, find stores to make a purchase, or purchase at www.la-z-boy.com. We believe that our digital transformation will improve traffic both online and in our retail locations.

•Growing our La-Z-Boy retail business. We expect to grow our Retail segment through organic same-store sales growth and by increasing company-owned stores through the opening of new stores and acquisitions. Opportunistically acquiring existing La-Z-Boy Stores and opening new La-Z-Boy Stores where we see opportunity for growth or further market penetration continues to be a priority. Over the last five years, as a result of opening new company-owned stores and acquiring independent La-Z-Boy Stores, we have increased our ownership percentage in this store network from 45% to 61%. With 378 stores currently in the La-Z-Boy Store network, we believe there is opportunity to open approximately ten stores annually, with the majority being company-owned, targeting a network of 450 stores.

•Expanding the reach of our wholesale distribution channels. Consumers experience the La-Z-Boy brand in many channels including the La-Z-Boy Store network, the La-Z-Boy Comfort Studio® locations, our store-within-a-store format, and La-Z-Boy branded space locations. While consumers increasingly interact with the brand digitally, our consumers also demonstrate an affinity for visiting our stores to shop, allowing us to frequently deliver the flagship La-Z-Boy Store, La-Z-Boy Comfort Studio®, or La-Z-Boy branded space experience and provide design services. In addition to our branded distribution channels, over 1,000 other dealers sell La-Z-Boy products, which include some of the best-known names in the industry, providing us the benefit of multi-channel distribution. We believe there is significant growth potential for our consumer brands through these retail channels.

Profitably growing the Joybird brand

•Profitably growing the Joybird brand with a digital-first consumer experience. Joybird is a leading omni-channel, direct to consumer retailer and manufacturer of upholstered furniture. We believe that Joybird is a brand with significant long-term potential and our strategic initiatives in this area focus on driving profitable growth through the opening of additional small-format stores in key markets, expanding distribution channels, driving customer acquisition and awareness through digital marketing, and continued optimization of cost structure.

Enhancing our enterprise capabilities

•Enhancing our enterprise capabilities to support the growth of our consumer brands and enable potential acquisitions for growth. Key to successful growth is ensuring we have the capabilities to support that growth, including an agile supply chain, modern technology for consumers, employees, and analytic capabilities, and by delivering a human-centered employee experience. We continue to have initiatives focused on enhancing these capabilities with a consumer-first focus.

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Reportable Segments

Our reportable operating segments include the Retail segment and the Wholesale segment.

•Retail Segment. Our Retail segment consists of one operating segment comprised of our 230 company-owned La-Z-Boy Stores. The Retail segment sells primarily upholstered furniture, in addition to some casegoods and other home furnishing accessories, to end consumers through these stores.

•Wholesale Segment. Our Wholesale segment consists primarily of four operating segments: La-Z-Boy, our largest operating segment, our England subsidiary, our casegoods operating segment that sells furniture under three brands (American Drew®, Hammary®, and Kincaid®), and our international operating segment which includes our international La-Z-Boy wholesale and manufacturing businesses. We aggregate these operating segments into one reportable segment because they are economically similar and meet the other aggregation criteria for determining reportable segments. Our Wholesale segment manufactures and imports upholstered furniture, such as recliners and motion furniture, sofas, loveseats, chairs, sectionals, modulars, ottomans and sleeper sofas and imports casegoods (wood) furniture such as bedroom sets, dining room sets, entertainment centers and occasional pieces. The Wholesale segment sells directly to La-Z-Boy Stores, operators of La-Z-Boy Comfort Studio® and branded space locations, England Custom Comfort Center locations, major dealers, and a wide cross-section of other independent retailers.

•Corporate and Other. Corporate and Other includes the shared costs for corporate functions, including human resources, information technology, finance and accounting, 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 omni-channel 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 online through its website, www.joybird.com, through small-format stores in key markets, and through other distribution channels. None of the operating segments included in Corporate and Other meet the requirements of reportable segments.

Results of Operations

The following discussion provides an analysis of our results of operations and reasons for material changes therein for fiscal year 2026 as compared with fiscal year 2025. Refer to "Results of Operations" in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s 2025 Annual Report on Form 10-K, filed with the SEC on June 17, 2025, for an analysis of the fiscal year 2025 results as compared to fiscal year 2024.

Fiscal Year 2026 and Fiscal Year 2025

Supply Chain Optimization

As a result of a significant customer transition in the current consumer demand environment in the United Kingdom, during fiscal 2025, we recorded charges of $20.6 million for the full impairment of the United Kingdom's reporting unit's goodwill and $2.1 million in SG&A expense for the impairment of various long-lived assets. During fiscal 2025, we also recorded severance charges of $1.1 million in cost of sales to optimize our manufacturing capacity within the United Kingdom.

During fiscal 2026, due to continued challenges in the macroeconomic environment in the United Kingdom, we announced the closure of the United Kingdom manufacturing business and operations ceased at the end of fiscal 2026. We recorded charges of $5.8 million in cost of sales related to this action, primarily for severance and the write-down of remaining inventory balances.

All charges in fiscal 2026 and 2025 were recorded within the Wholesale segment. The comparative impact of these actions in fiscal 2026 relative to fiscal 2025 did not have a meaningful impact on our gross margin or SG&A expense as percentage of sales for La-Z-Boy Incorporated or the Wholesale segment. Refer to the segment discussion below for the comparative impact of the goodwill impairment recorded in fiscal 2025.

Business Realignment

As part of our plan to dispose a portion of our Casegoods wholesale bus

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