La-Z-Boy Incorporated (NYSE:LZB) Q1 2024 Earnings Call Transcript

But that’s on stable units versus a year ago. So we’re pleased with that as well.

Brad Thomas: That’s great. And let’s see here. To follow up on Bobby’s question, just as we think about the margin outlook here. I was wondering if you all could maybe talk about some of those puts and takes as we think about the balance of the year for gross margin in particular.

Bob Lucian: We don’t — I’m generally — just we’re not giving specific guidance on the components of the P&L. We will continue to do the work that we’ve been focused against over the last couple of years on Century Vision, that’s improving our supply chain. Our margin going forward from a gross margin perspective, we’ll continue to improve as retail is a larger part of our business, and that carries with it a higher gross margin. Importantly, from an overall margin perspective, we are increasing — and I mentioned it in the prepared remarks as well as in the press release that we are going to invest more heavily from a marketing perspective than what we did in the prior year to support the Long Live with Lazy campaign. The work that went into getting the consumer insight and the segmentation work and the development of that campaign.

We really want to leverage that because we think that’s going to really benefit us, particularly on the — from a written sales and a demand perspective going forward. So that will be — while we’re going to be making improvements from a gross margin perspective, SG&A will continue to move up quarter-over-quarter as we invest against that marketing.

Brad Thomas: That’s helpful, Bob. I know you don’t want to get it specifically. I appreciate the details there. If I could squeeze one last one in, just on Joybird. I know that driving better profitability there has been a big focal point for you all. And it looks like the revenue is sequentially pretty similar to what you did last quarter. Can you talk a little bit more about the path to better profitability for Joybird and when do you think you hit the point where you can maybe push a little bit more on driving some growth there again?

Melinda Whittington: Yeah. A couple of things on Joybird. The entire e-com furniture industry, certainly last summer, kind of dramatically slowed down. And it seems like maybe in general, furniture consumers sort of hit that saturation point of who’s going to want to purchase online and who’s going to want to purchase in-store. And there’s still — the majority of consumers does more in-store. So that is a known. And what we’re excited about with Joybird first of all, is that it is an e-commerce brand, so it can benefit from that market for that consumer that’s interested. But we also have a network of stores. And so we believe that combination is a good positive for the longer term for Joybird, and we’ll continue to invest across both of those channels and really create that true omnichannel presence where the consumer can start online and move into store or vice versa.

The pure e-commerce players don’t necessarily have that benefit. The second thing we have is a vertically integrated model where we’re making that furniture, and that gives us the capability to invest in the brand and continue to make it grow over time. As far as — we certainly have taken a pause on that, as you know, to make sure it was early last summer when the majority of e-comm players really saw the slowdown. For Joybird, that didn’t happen until Labor Day last year. And so that will be behind us in our base by the time we finish our second quarter. And with the progress we’re making on bottom line, we’re excited to see that start to start to move into more of a growth mode here. I’m not going to call it specifically, but I think we’re getting closer.