La-Z-Boy Incorporated

Good morning, ladies and gentlemen, and welcome to the Lazy Boy Fiscal 2023 First Quarter Conference Call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Cathy Liebman, Director of Investor Relations and Corporate Communications. Cathy, over to you.

Thank you, Jenny. Good morning and thank you for joining us to discuss our fiscal 2023 first quarter results. With us today are Melinda Whittington, Lazy Boys President and Chief Executive Officer, and Bob Lucien, CFO. Melinda will open and close the call and Bob will speak to segment performance and the financials midway through. We'll then open the call to questions. Slides will accompany this presentation and you may view them through our webcast link, which will be available for one year. And a telephone replay of the call will be available for one week, beginning this afternoon. Before we begin the presentation, I'd like to remind you that some statements made in today's call include forward-looking statements about Lazy Boy's future performance and other matters. Although we believe these statements to be reasonable, our actual results could differ materially. The most significant risk factors that could affect Our future results are described in our annual report on Form 10-K. We encourage you to review those risk factors as well as other key information details in our SEC filing. Also, our earnings release is available under the News and Events tab on the Investor Relations page of our website, and it includes reconciliations of certain non-GAAP measures which are also included as an appendix at the end of our conference call slide deck. With that, I will now turn the call over to Melinda Whittington, Lazy Boy's President and Chief Executive Officer. Melinda?

Thank you, Kathy, and good morning, everyone. Late yesterday afternoon, following the close of market, we reported record Q1 results. Highlights included Record consolidated first quarter delivered sales and profits for the total company. Record delivered sales and profits for our company-owned retail segment, not only for a first quarter, but an all-time record. Strong delivered and written sales for Joybird. Record delivered sales in a first quarter for our wholesale segment. A significant improvement in consolidated operating margin versus last year's first quarter. and closing on the acquisition of five Lazy Boy Furniture Gallery stores in the Denver market as we continue to build our retail business, opening two new retail locations for Joybird, one in San Francisco and one in Austin, and opening a second Joybird production facility in Tijuana. These initiatives represent the investments we're making to drive brand growth as part of our Century Vision strategy. All in, we delivered great Q1 results in what continues to be a volatile environment. We managed through a myriad of ongoing changes and challenges, and for the period, most everything came together well. While we are proud of this excellent performance, the pace of store traffic has slowed for our industry broadly, likely a reflection of both a return to historical seasonality and lower consumer sentiment due to macroeconomic and geopolitical concerns and uncertainty. For the quarter, this impacted written sales for our company-owned retail segment, with written same-store sales decreasing 15% for the fiscal 23 first quarter, and written same-store sales across our entire Lazy Boy Furniture Galleries network decreasing 14%. However, Written same-store sales for our company-owned stores and Total Network were 12% and 9% higher, respectively, than our pre-pandemic fiscal 2020 first quarter. And we are excited to report that our Joybird business wrote 12% more this Q1 than last year's first quarter, and more than doubled written sales versus our pre-pandemic fiscal 2020 first quarter. As we navigate this uncertain period, we remain focused on managing the business with resilience and agility to respond quickly to changing market conditions. We're continuing to work down our backlog to drive delivered sales and improve service to customers and consumers with shorter lead times. And we are increasing our marketing spend to pre-pandemic levels to increase traffic and conversion in this more challenging environment. while building the equity of our brands to drive market share gains for the long term. On the production side, we're working to reduce startup friction costs at our new plants in Mexico, which will contribute to a lower cost manufacturing footprint, improve our capabilities to service the West Coast, and ultimately improve gross margin as we move forward. Excuse me. We are building our agility to manage the near term, leveraging our 95-year-old foundation, and investing for long-term success through our century vision strategy. Our strong financial position will enable us to make prudent investments to capitalize on the appeal of our brands and to strengthen our supply chain and broader capabilities to support growth objectives. History tells us that consumers turn to strong and well-loved brands during challenging times. And through the moves we're making, we intend to deliver long-term market share gains. Beyond the numbers, I'd like to take a moment to highlight the publication of our inaugural ESG report, which outlines our progress on sustainability and our commitment to a healthy planet and values-based culture. As we build the Lazy Boy Incorporated of tomorrow, our goal is to make the world a better place through the transformational power of comfort. while delivering long-term returns to all stakeholders. I invite you to read our report, which can be found on our website. Now, let me turn the call over to Bob to review our first quarter results in more detail. Bob?