Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Jul. 27, 2019	Aug. 13, 2019
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jul. 27, 2019
Document Transition Report	false
Entity File Number	1-9656
Entity Registrant Name	LA-Z-BOY INCORPORATED
Entity Incorporation, State or Country Code	MI
Entity Tax Identification Number	38-0751137
Entity Address, Address Line One	One La-Z-Boy Drive
Entity Address, City or Town	Monroe
Entity Address, State or Province	MI
Entity Address, Postal Zip Code	48162-5138
City Area Code	734
Local Phone Number	242-1444
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Title of 12(b) Security	Common Stock, $1.00 Par Value
Entity Common Stock, Shares Outstanding		46,632,617
Entity Central Index Key	0000057131
Current Fiscal Year End Date	--04-27
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false
Trading Symbol	LZB
Security Exchange Name	NYSE

CONSOLIDATED STATEMENT OF INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Jul. 27, 2019	Jul. 28, 2018
CONSOLIDATED STATEMENT OF INCOME
Sales	$ 413,633	$ 384,695
Cost of sales	245,921	236,173
Gross profit	167,712	148,522
Selling, general and administrative expense	144,290	125,362
Operating income	23,422	23,160
Interest expense	(318)	(104)
Interest income	727	602
Other income (expense), net	(760)	892
Income before income taxes	23,071	24,550
Income tax expense	5,083	5,599
Net income	17,988	18,951
Net (income) loss attributable to noncontrolling interests	81	(648)
Net income attributable to La-Z-Boy Incorporated	$ 18,069	$ 18,303
Basic weighted average common shares (in shares)	46,820	46,716
Basic net income attributable to La-Z-Boy Incorporated per share (in dollars per share)	$ 0.39	$ 0.39
Diluted weighted average common shares (in shares)	47,125	47,161
Diluted net income attributable to La-Z-Boy Incorporated per share (in dollars per share)	$ 0.38	$ 0.39

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Jul. 27, 2019	Jul. 28, 2018
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Net income	$ 17,988	$ 18,951
Other comprehensive income (loss)
Currency translation adjustment	614	(4,189)
Change in fair value of cash flow hedges, net of tax	4	(333)
Net unrealized gain on marketable securities, net of tax	108	41
Net pension amortization, net of tax	41	516
Total other comprehensive income (loss)	767	(3,965)
Total comprehensive income before allocation to noncontrolling interests	18,755	14,986
Comprehensive (income) loss attributable to noncontrolling interests	(405)	580
Comprehensive income attributable to La-Z-Boy Incorporated	$ 18,350	$ 15,566

CONSOLIDATED BALANCE SHEET - USD ($) $ in Thousands	Jul. 27, 2019	Apr. 27, 2019
Current assets
Cash and equivalents	$ 111,622	$ 129,819
Restricted cash	1,970	1,968
Receivables, net of allowance of $2,177 at 7/27/19 and $2,180 at 4/27/19	134,379	143,288
Inventories, net	197,701	196,899
Other current assets	85,631	69,144
Total current assets	531,303	541,118
Property, plant and equipment, net	204,789	200,523
Goodwill	184,675	185,867
Other intangible assets, net	29,595	29,907
Deferred income taxes - long-term	21,906	20,670
Right of use lease asset	312,433
Other long-term assets, net	77,449	81,705
Total assets	1,362,150	1,059,790
Current liabilities
Current portion of long-term debt		180
Accounts payable	62,935	65,365
Lease liability, short-term	64,158
Accrued expenses and other current liabilities	168,757	173,091
Total current liabilities	295,850	238,636
Long-term debt		19
Lease liability, long-term	262,264
Other long-term liabilities	105,898	124,159
Shareholders' equity
Preferred shares - 5,000 authorized; none issued
Common shares, $1 par value - 150,000 authorized; 46,690 outstanding at 7/27/19 and 46,955 outstanding at 4/27/19	46,690	46,955
Capital in excess of par value	311,207	313,168
Retained earnings	329,096	325,847
Accumulated other comprehensive loss	(3,728)	(3,462)
Total La-Z-Boy Incorporated shareholders' equity	683,265	682,508
Noncontrolling interests	14,873	14,468
Total equity	698,138	696,976
Total liabilities and equity	$ 1,362,150	$ 1,059,790

CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Jul. 27, 2019	Apr. 27, 2019
Current assets
Receivables, allowance (in dollars)	$ 2,177	$ 2,180
Shareholders' equity
Preferred shares, authorized (in shares)	5,000	5,000
Preferred shares, issued (in shares)	0	0
Common shares, par value (in dollars per share)	$ 1	$ 1
Common shares, authorized (in shares)	150,000	150,000
Common shares, outstanding (in shares)	46,690	46,955

CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Jul. 27, 2019	Jul. 28, 2018
Cash flows from operating activities
Net income	$ 17,988	$ 18,951
Adjustments to reconcile net income to cash provided by (used for) operating activities
Gain on disposal of assets	(536)
Change in deferred taxes	(677)	(183)
Provision for doubtful accounts	116	279
Depreciation and amortization	7,298	7,541
Equity-based compensation expense	1,675	2,040
Change in receivables	8,535	14,236
Change in inventories	(527)	(11,092)
Change in other assets	7,305	463
Change in payables	(1,391)	2,491
Change in other liabilities	(20,446)	(2,572)
Net cash provided by operating activities	19,340	32,154
Cash flows from investing activities
Proceeds from disposals of assets	22	61
Proceeds from insurance	642	58
Capital expenditures	(12,299)	(15,873)
Purchases of investments	(5,288)	(4,190)
Proceeds from sales of investments	4,060	4,762
Acquisitions	(5,438)
Net cash used for investing activities	(18,301)	(15,182)
Cash flows from financing activities
Payments on debt and finance lease liabilities	(47)	(59)
Stock issued for stock and employee benefit plans, net of shares withheld for taxes	(1,417)	(2,009)
Purchases of common stock	(12,313)	(7,944)
Dividends paid	(6,112)	(5,625)
Net cash used for financing activities	(19,889)	(15,637)
Effect of exchange rate changes on cash and equivalents	655	(1,601)
Change in cash, cash equivalents and restricted cash	(18,195)	(266)
Cash, cash equivalents and restricted cash at beginning of period	131,787	136,871
Cash, cash equivalents and restricted cash at end of period	113,592	136,605
Supplemental disclosure of non-cash investing activities
Capital expenditures included in payables	$ 2,416	$ 4,122

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - USD ($) $ in Thousands	Common Shares	Capital in Excess of Par Value	Retained Earnings	Accumulated Other Comprehensive Loss	Non-Controlling Interests	Total
Balance at Apr. 28, 2018	$ 46,788	$ 298,948	$ 291,644	$ (25,199)	$ 13,035	$ 625,216
Increase (Decrease) in Stockholders' Equity
Net income			18,303		648	18,951
Other comprehensive loss				(2,737)	(1,228)	(3,965)
Stock issued for stock and employee benefit plans, net of cancellations and withholding tax	160	(42)	(2,127)			(2,009)
Purchases of 257 shares and 391 shares of common stock	(257)	(176)	(7,511)			(7,944)
Stock option and restricted stock expense		2,040				2,040
Cumulative effect adjustment for leases, net of tax (1)				(1,637)
Cumulative effect adjustment for investments, net of tax \| ASU 2016-01 - Investments			1,637	(1,637)
Dividends declared and paid			(5,625)			(5,625)
Balance at Jul. 28, 2018	46,691	300,770	296,321	(29,573)	12,455	626,664
Balance at Apr. 27, 2019	46,955	313,168	325,847	(3,462)	14,468	696,976
Increase (Decrease) in Stockholders' Equity
Net income			18,069		(81)	17,988
Other comprehensive loss				281	486	767
Stock issued for stock and employee benefit plans, net of cancellations and withholding tax	126	126	(1,669)			(1,417)
Purchases of 257 shares and 391 shares of common stock	(391)	(3,762)	(8,160)			(12,313)
Stock option and restricted stock expense		1,675				1,675
Cumulative effect adjustment for leases, net of tax (1) \| ASU 2016-02 - Lease			574			574
Cumulative effect adjustment for leases, net of tax (1)				(547)
Reclassification of certain income tax effects (2) \| ASU 2018-02			547	(547)
Dividends declared and paid			(6,112)			(6,112)
Balance at Jul. 27, 2019	$ 46,690	$ 311,207	$ 329,096	$ (3,728)	$ 14,873	$ 698,138

Basis of Presentation

3 Months Ended

Jul. 27, 2019

Basis of Presentation

Basis of Presentation

Note 1: Basis of Presentation

The accompanying consolidated financial statements include the consolidated accounts of La-Z-Boy Incorporated and our majority-owned subsidiaries. We derived the April 27, 2019, balance sheet from our audited financial statements. We prepared the interim financial information in conformity with generally accepted accounting principles, which we applied on a basis consistent with those reflected in our fiscal 2019 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”), but the information does not include all of the disclosures required by generally accepted accounting principles. In management’s opinion, the interim financial information includes all adjustments and accruals, consisting only of normal recurring adjustments (except as otherwise disclosed), that are necessary for a fair statement of results for the respective interim periods. The interim results reflected in the accompanying financial statements are not necessarily indicative of the results of operations that will occur for the full fiscal year ending April 25, 2020.

To further strengthen our supply chain footprint, on August 8, 2019, we announced our plan to close our Redlands, California upholstered furniture manufacturing facility and move production to available capacity at our other North American facilities. In addition, we will transition the leather cut-and-sew operation from the Newton, Mississippi upholstered furniture manufacturing plant to another North American-based cut-and-sew facility. The company’s Redlands upholstered furniture plant currently employs about 350 people, accounts for approximately 10% of the La-Z-Boy branded business total upholstery production and manufactures recliners, motion sofas and classics (high-leg recliners). We plan to cease production at the Redlands plant in October 2019. The move of the Newton leather cut-and-sew operation is expected to fully transition by the end of calendar 2019 and will impact about 105 of the 525 employees at that location. The Redlands facility, which is approximately 200,000 square feet, will be idled after operations cease and marketed for sale.

As a part of our supply chain optimization initiative, we may incur expenses that qualify as exit and disposal costs under ASC 420, Exit or Disposal Cost Obligations. Other expenses that are an integral component of, and directly attributable to, restructuring activities do not qualify as exit and disposal costs, such as accelerated depreciation, asset impairments and other incremental costs. In the first quarter of fiscal 2020, we recognized a severance liability of $1.5 million within cost of sales that was probable and estimable at the end of the reporting period. These costs do not qualify as exit and disposal costs under ASC 420.

At July 27, 2019, we owned preferred shares of two privately-held companies, both of which are variable interest entities. We also hold a warrant to purchase common shares of one of these companies. We have not consolidated the results of either of these companies in our financial statements because we do not have the power to direct those activities that most significantly impact the economic performance of either of these companies and, therefore, are not the primary beneficiary.

Accounting pronouncements adopted in fiscal 2020

Each accounting standards updates (“ASUs”) adopted below had a significant impact on our accounting policies and/or our consolidated financial statements and related disclosures.

In February 2016, the FASB issued ASU 2016-02 requiring lessees to record all operating leases on their balance sheet. Under this standard, the lessee is required to record an asset for the right to use the underlying asset for the lease term and a corresponding liability for the contractual lease payments. We have adopted this standard in the first quarter of fiscal 2020 using the modified retrospective approach.

The following table summarizes additional ASUs which were adopted in fiscal 2020, but did not have a material impact on our accounting policies or our consolidated financial statements and related disclosures.


ASU		Description
ASU 2017-06		Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting (a consensus of the Emerging Issues Task Force)
ASU 2017-12		Targeted Improvements to Accounting for Hedging Activities
ASU 2018-02		Income Statement – Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
ASU 2018-07		Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting
ASU 2018-16		Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes

Accounting pronouncements not yet adopted

The following table summarizes additional accounting pronouncements which we have not yet adopted, but we believe will not have a material impact on our accounting policies or our consolidated financial statements and related disclosures.


ASU	Description	Adoption Date
ASU 2016-13	Financial Instruments – Credit losses	Fiscal 2021
ASU 2018-13	Fair Value Measurement – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurements	Fiscal 2021
ASU 2018-14	Compensation – Retirement benefits – Defined Benefit Plans – General – Changes to the Disclosure Requirements for Defined Benefit Plans	Fiscal 2022

Acquisitions

3 Months Ended

Jul. 27, 2019

Acquisitions

Acquisitions

Note 2: Acquisitions

We did not complete any acquisitions during the quarter ended July 27, 2019. Information regarding our fiscal 2019 acquisition below reflects revised estimates based on updated information obtained during the first quarter of fiscal 2020.

Corporate and Other acquisitions

On July 30, 2018, we completed our acquisition of Stitch Industries, Inc. ("Joybird"), an e-commerce retailer and manufacturer of upholstered furniture, for guaranteed cash payments of $75 million, which was subject to a working capital adjustment of $2.5 million. We received the working capital adjustment during the third quarter of fiscal 2019 from amounts placed in escrow at the time of the closing of the transaction. We acquired Joybird to better position ourselves for growth in the online selling environment and increase our visibility with millennial and Gen X consumers, while simultaneously leveraging our supply chain assets.

The guaranteed payments include a closing date cash payment of $37.5 million in purchase price consideration (net of the working capital adjustment), $7.5 million in prepaid compensation, and the assumption of $5.0 million of liabilities that will be paid within two years following the acquisition.The remaining $25 million will

be paid in five annual installments of $5 million on the anniversary date of the acquisition, the first of which was paid in the first quarter of fiscal 2020. The merger agreement also includes two future earn-out opportunities based on Joybird’s financial performance in fiscal 2021 and fiscal 2023.

The $7.5 million of prepaid compensation relates to the retention of the four Joybird founders, now our employees, each of whom will forfeit proportional amounts if one or more of them resigns in the two years following the acquisition. We are amortizing the $7.5 million to selling, general & administrative expense over the two-year retention period on a straight-line basis. In addition to the guaranteed cash payments of $75 million, we recorded a contingent consideration liability on the date of acquisition of $7.5 million, which reflects the provisional fair value of the earn-out opportunities as of the date of acquisition. We also recorded a finite-lived intangible asset of $6.4 million reflecting the provisional fair value of the acquired Joybird^® trade name, which we are amortizing to selling, general, and administrative (“SG&A”) expense on a straight-line basis over its useful life of eight years. The undiscounted range of the contingent consideration is zero to $65 million and is based on sales and profitability of Joybird in fiscal 2021 and fiscal 2023. Subsequent adjustments to the fair value of the contingent consideration will impact SG&A expense in our consolidated statement of income.

We recorded $78.8 million of goodwill related to the Joybird acquisition, related primarily to synergies we expect from the integration of the acquisition and the anticipated future benefits of these synergies. The finite-lived intangible asset and goodwill asset for Joybird are not deductible for federal income tax purposes.

When we acquired Joybird, we based the purchase price allocations on provisional fair values at the date of acquisition. During the first quarter of fiscal 2020, we obtained additional data and have revised certain of our estimates, resulting in the purchase price allocations shown below:


	Second quarter
	fiscal 2019
	Corporate and
	Other
(Amounts in thousands)	acquisitions
Fair value of consideration:
Cash (paid at closing)	$	37,482
Guaranteed payment		22,489
Acquisition earn-out		7,500
Assumption of liability		5,000
Working capital adjustment		(2,486)
Total fair value of consideration		69,985

Amounts recognized for assets acquired and liabilities assumed:
Inventory		5,258
Other current assets		3,733
Property, plant and equipment		2,057
Finite-lived tradename		6,400
Other long-term assets		3,647
Accounts payable		(8,222)
Customer deposits		(13,904)
Other current liabilities		(7,681)
Other long-term liabilities		(150)
Total identifiable net liabilities acquired		(8,862)

Goodwill	$	78,847

We included the Joybird operating segment in our other business activities which we report as Corporate and Other results upon acquisition.

The above acquisition was not material to our financial position or our results of operations, and therefore, pro-forma financial information is not presented. In accordance with Accounting Standard Codification Topic 805-10-25-15, the acquirer has a period of time, referred to as the measurement period, to finalize the accounting for a business combination. The measurement period provides companies with a reasonable period of time to determine, among other things, the identifiable assets acquired, liabilities assumed and consideration transferred for the acquisition, or other amounts used in measuring goodwill. As we are beyond the provisional period, all of the purchase accounting shown above is final.

Restricted Cash

3 Months Ended

Jul. 27, 2019

Restricted Cash

Restricted Cash

Note 3: Restricted Cash

We have restricted cash on deposit with a bank as collateral for certain letters of credit. All of our letters of credit have maturity dates within the next twelve months, but we expect to renew some of these letters of credit when they mature.


(Unaudited, amounts in thousands)	7/27/19		7/28/18
Cash and cash equivalents	$	111,622	$	134,247
Restricted cash		1,970		2,358
Total cash, cash equivalents and restricted cash	$	113,592	$	136,605

Inventories

3 Months Ended

Jul. 27, 2019

Inventories

Inventories

Note 4: Inventories

A summary of inventories is as follows:


(Unaudited, amounts in thousands)	7/27/19		4/27/19
Raw materials	$	94,384	$	90,359
Work in process		13,514		13,728
Finished goods		111,469		114,478
FIFO inventories		219,367		218,565
Excess of FIFO over LIFO		(21,666)		(21,666)
Total inventories	$	197,701	$	196,899

Leases

3 Months Ended

Jul. 27, 2019

Leases

Leases

Note 5: Leases

During the first quarter of fiscal 2020, we adopted ASU 2016-02, Leases (Topic 842) and all related amendments. The guidance requires lessees to recognize substantially all leases on their balance sheet as a right-of-use (“ROU”) asset and a lease liability.

The Company leases real estate for retail stores, distribution centers, warehouses, plants, showrooms and office space. We also have equipment leases for tractors/trailers, IT and office equipment and vehicles. We determine if a contract contains a lease at inception based on our right to control the use of an identified asset and our right to obtain substantially all of the economic benefits from the use of that identified asset. Most of our real estate leases include options to renew or terminate early. We assess these options to determine if we are reasonably certain of exercising these options based on all relevant economic and financial factors. Any options that meet this criteria are included in the lease term at lease commencement.

Most of our leases do not have an interest rate implicit in the lease. As a result, for purposes of measuring our ROU asset and lease liability, we determine our incremental borrowing rate by applying a spread above the U.S. Treasury borrowing rates. In the case an interest rate is implicit in a lease we will use that rate as the discount rate for that lease. Some of our leases contain variable rent payments based on a Consumer Price Index or percentage of sales. Due to the variable nature of these costs, they are not included in the measurement of the ROU asset and lease liability.

The Company has elected to apply the practical expedients permitted under transition guidance to forgo the restatement of comparative periods and to not reassess leases entered into prior to adoption. In addition, we have elected the practical expedient to not separate lease and non-lease components when determining the ROU asset and lease liability. We have also made an accounting policy election to not recognize an ROU asset and lease liability on the balance sheet for those leases with an initial term of one year or less and instead such liabilities will be expensed on a straight-line basis over the lease term.

Supplemental balance sheet information (in thousands) related to leases as of July 27, 2019:


Operating leases
ROU assets	$	312,312
Lease liabilities, short-term		64,031
Lease liabilities, long-term		262,264

Finance leases
ROU assets	$	121
Lease liabilities, short-term		127
Lease liabilities, long-term		—

The ROU assets by segment are as follows (in thousands) as of July 27, 2019:


Upholstery	$	55,057
Casegoods		2,205
Retail		248,338
Corporate & Other		6,833
Total ROU assets	$	312,433

The components of lease cost are as follows (in thousands) for the quarter ended July 27, 2019:


Operating lease cost	$	19,018
Financing lease cost		49
Short-term lease cost		25
Variable lease cost		40
Less: Sublease income		(628)
Total lease cost	$	18,504

The following table presents supplemental lease disclosures for the quarter ended July 27, 2019:


(Dollars in thousands)	Operating			Financing
Cash paid for amounts included in the measurement of lease liabilities	$	19,303		$	49
Lease liabilities arising from new ROU assets		14,353			—

Weighted-average remaining lease term (years)		6.6			0.8
Weighted-average discount rate		3.9	%		3.9	%

The following table presents our undiscounted cash flows as of July 27, 2019 and our minimum contractual obligations on our leases as of April 27, 2019:


	7/27/19				4/27/19
(Amounts in thousands)	Operating Leases		Financing Leases		Operating Leases		Financing Leases
Within one year	$	75,357	$	129	$	76,508	$	180
After one year and within two years		68,610		—		71,544		19
After two years and within three years		55,219		—		58,763		—
After three years and within four years		43,029		—		46,541		—
After four years and within five years		34,193		—		36,082		—
After five years		93,658		—		102,782		—
Total lease payments		370,066		129	$	392,220	$	199
Less: Interest		43,771		2
Total lease obligations	$	326,295	$	127

Goodwill and Other Intangible Assets

3 Months Ended

Jul. 27, 2019

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Note 6: Goodwill and Other Intangible Assets

We have goodwill on our consolidated balance sheet as follows:


Reportable Segment/Unit		Related Acquisition
Upholstery segment		Acquisition of the wholesale business in the United Kingdom and Ireland
Retail segment		Acquisitions of La-Z-Boy Furniture Galleries^® stores
Corporate & Other		Acquisition of Joybird

The following is a roll-forward of goodwill for the quarter ended July 27, 2019:


	Upholstery		Retail		Corporate		Total
(Unaudited, amounts in thousands)	Segment		Segment		and Other		Goodwill
Balance at April 27, 2019	$	12,148	$	94,103	$	79,616	$	185,867
Acquisition adjustment		—		—		(769)		(769)
Translation adjustment		(500)		77		—		(423)
Balance at July 27, 2019	$	11,648	$	94,180	$	78,847	$	184,675

We have intangible assets on our consolidated balance sheet as follows:


Reportable Segment/Unit	Intangible Asset	Useful Life
Upholstery segment	Primarily acquired customer relationships from our acquisition of the wholesale business in the United Kingdom and Ireland	Amortizable over useful lives that do not exceed 15 years
Casegoods segment	American Drew^®trade name	Indefinite-lived
Retail segment	Reacquired rights to own and operate La-Z-Boy Furniture Galleries^® stores	Indefinite-lived
Corporate & Other	Joybird^® trade name	Amortizable over eight-year useful life

The following is a roll-forward of our other intangible assets for the quarter ended July 27, 2019:


	Indefinite-		Finite-		Indefinite-				Total
	Lived		Lived		Lived		Other		Other
	Trade		Trade		Reacquired		Intangible		Intangible
(Amounts in thousands)	Names		Names		Rights		Assets		Assets
Balance at April 27, 2019	$	1,155	$	5,801	$	20,117	$	2,834	$	29,907
Amortization		—		(200)		—		(55)		(255)
Translation adjustment		—		—		58		(115)		(57)
Balance at July 27, 2019	$	1,155	$	5,601	$	20,175	$	2,664	$	29,595

Investments

3 Months Ended

Jul. 27, 2019

Investments

Investments

Note 7: Investments

We have current and long-term investments intended to enhance returns on our cash as well as to fund future obligations of our non-qualified defined benefit retirement plan, our executive deferred compensation plan, and our performance compensation retirement plan. We also hold other investments consisting of cost-basis preferred shares of two privately-held companies. Our short-term investments are included in other current assets and our long-term investments are included in other long-term assets on our consolidated balance sheet.

The following summarizes our investments at July 27, 2019, and April 27, 2019:


(Unaudited, amounts in thousands)	7/27/19		4/27/19
Short-term investments:
Marketable securities	$	26,002	$	18,016
Held-to-maturity investments		3,454		3,341
Total short-term investments		29,456		21,357

Long-term investments:
Marketable securities		21,023		24,085
Cost basis investments		11,979		11,979
Total long-term investments		33,002		36,064

Total investments	$	62,458	$	57,421

Investments to enhance returns on cash	$	32,884	$	31,470
Investments to fund compensation/retirement plans	$	17,595	$	13,972
Other investments	$	11,979	$	11,979

The following is a summary of the unrealized gains, unrealized losses, and fair value by investment type at July 27, 2019, and April 27, 2019:


At July 27, 2019
	Gross		Gross
(Unaudited, amounts in thousands)	Unrealized Gains		Unrealized Losses		Fair Value
Equity securities	$	2,066	$	—	$	23,268
Fixed income		155		(47)		34,382
Other		324		(16)		4,808
Total securities	$	2,545	$	(63)	$	62,458


At April 27, 2019
	Gross		Gross
(Unaudited, amounts in thousands)	Unrealized Gains		Unrealized Losses		Fair Value
Equity securities	$	1,841	$	—	$	19,535
Fixed income		75		(111)		33,217
Other		258		(13)		4,669
Total securities	$	2,174	$	(124)	$	57,421

The following table summarizes sales of marketable securities:


	Quarter Ended
(Unaudited, amounts in thousands)	7/27/19		7/28/18
Proceeds from sales	$	4,060	$	4,762
Gross realized gains		6		75
Gross realized losses		(2)		(55)

At July 27, 2019, the fair value of fixed income marketable securities, classified as available-for-sale securities, by contractual maturity was $22.6 million within one year, $9.4 million within two to five years, $1.6 million within six to ten years, and $0.8 million thereafter.

Employee Benefits

3 Months Ended

Jul. 27, 2019

Employee Benefits

Employee Benefits

Note 8: Employee Benefits

Pension

During the fourth quarter of fiscal 2019, we terminated our defined benefit pension plan for eligible factory hourly employees in our La-Z-Boy operating unit. In connection with the plan termination, we settled all future obligations under the plan through a combination of lump-sum payments to eligible participants who elected to receive them, and transferred any remaining benefit obligations under the plan to a highly rated insurance company.

There were no net periodic pension costs associated with the terminated pension plan in the quarter ended July 27, 2019. For the quarter ended July 28, 2018, net periodic pension costs were as follows:


	Quarter Ended
(Unaudited, amounts in thousands)	7/28/18
Service cost	$	323
Interest cost		1,116
Expected return on plan assets		(1,136)
Net amortization		639
Net periodic pension cost	$	942

The components of net periodic pension cost other than the service cost are included in other income (expense), net in our consolidated statement of income. Service cost is recorded in cost of sales in our consolidated statement of income.

Employee Vacation Policy Changes

We enacted changes to our employee vacation policies that became effective on January 1, 2019. Our new vacation policies enhanced the amount of vacation time earned by our employees. Additionally, under these vacation policies, our salary and office hourly employees now accrue vacation in the current calendar year for use in the current calendar year, and any vacation time earned but not used will be forfeited at the end of each calendar year.

Product Warranties

3 Months Ended

Jul. 27, 2019

Product Warranties

Product Warranties

Note 9: Product Warranties

We accrue an estimated liability for product warranties when we recognize revenue on the sale of warranted products. We estimate future warranty claims on new sales based on our historical claims experience and also provide for any additional anticipated future costs on previously sold products. We incorporate repair costs into our liability estimates, including materials, labor and overhead amounts necessary to perform repairs and any costs associated with delivering repaired product to our customers. Over 90% of our warranty liability relates to our Upholstery segment as we generally warrant our products against defects for one year on fabric and leather, from one to ten years on cushions and padding, and provide a limited lifetime warranty on certain mechanisms and frames. Our Upholstery segment warranties cover labor costs relating to our parts for one year. We provide a limited lifetime warranty against defects on a majority of the products sold by Joybird, which is part of our Corporate and Other results. For all our manufacturer warranties, the warranty period begins when the consumer receives our product. We use considerable judgment in making our estimates, and we record differences between our actual and estimated costs when the differences are known.

A reconciliation of the changes in our product warranty liability is as follows:


	Quarter Ended
(Unaudited, amounts in thousands)	7/27/19		7/28/18
Balance as of the beginning of the period	$	22,736	$	21,205
Accruals during the period		5,657		5,121
Settlements during the period		(5,557)		(5,233)
Balance as of the end of the period	$	22,836	$	21,093

As of July 27, 2019, and April 27, 2019, we included $13.9 million of our product warranty liability in accrued expenses and other current liabilities on our consolidated balance sheet, and included the remainder in other

long-term liabilities. We recorded accruals during the periods presented in the table above, primarily to reflect charges that relate to warranties issued during the respective periods.

Stock-Based Compensation

3 Months Ended

Jul. 27, 2019

Stock-Based Compensation

Stock-Based Compensation

Note 10: Stock-Based Compensation

The table below summarizes the total stock-based compensation expense we recognized for all outstanding grants in our consolidated statement of income:


	Quarter Ended
(Unaudited, amounts in thousands)	7/27/19		7/28/18
Equity-based awards expense	$	1,675	$	2,040
Liability-based awards expense		(60)		166
Total stock-based compensation expense	$	1,615	$	2,206

Stock Options. We granted 248,662 stock options to employees during the first quarter of fiscal 2020 and we have stock options outstanding from previous grants. In fiscal 2020, we have changed the grant mix to include fewer stock options and have replaced those awards with restricted shares. We account for stock options as equity-based awards because when they are exercised, they will be settled in common shares. We recognize compensation expense for stock options over the vesting period equal to the fair value on the date our compensation committee approved the awards. The vesting period for our stock options ranges from one to four years, with accelerated vesting upon retirement. The vesting date for retirement-eligible employees is the later of the date they meet the criteria for retirement or the end of the fiscal year in which the grant was made. We accelerate the expense for options granted to retirement-eligible employees over the vesting period, with expense recognized from the grant date through their retirement eligibility date or over the ten months following the grant date, whichever period is longer. We estimate forfeiture rates based on our employees’ forfeiture history and believe they will approximate future results. We estimate the fair value of the employee stock options at the date of grant using the Black-Scholes option-pricing model, which requires management to make certain assumptions. We estimate expected volatility based on the historical volatility of our common shares. We base the average expected life on the contractual term of the stock option and expected employee exercise trends. We base the risk-free rate on U.S. Treasury issues with a term equal to the expected life assumed at the date of the grant.

We calculated the fair value of stock options granted during the first quarter of fiscal 2020 using the following assumptions:


	Fiscal 2020
(Unaudited)	grant
Risk-free interest rate		2.19	%
Dividend rate		1.72	%
Expected life in years		5.0
Stock price volatility		34.27	%
Fair value per share	$	7.94

Stock Appreciation Rights (“SARs”). We have not granted any SARs to employees since fiscal 2014, but we have SARs outstanding from the fiscal 2013 and fiscal 2014 grants. All outstanding SARs are fully vested and have a term of ten years. SARs will be paid in cash upon exercise and, accordingly, we account for SARs as liability-based awards that we re-measure to fair value at the end of each reporting period.

In fiscal 2013 and fiscal 2014, we granted SARs as described in our Annual Report on Form 10-K for the fiscal year ended April 27, 2013 and April 26, 2014, respectively. As of July 27, 2019, we had 7,149 and 14,580 SARs outstanding for the fiscal 2013 and fiscal 2014 awards, respectively. These awards have exceeded their expected life and will be re-measured to fair value based on their intrinsic value, which is the market value of our common stock on the last day of the reporting period less the exercise price, until the earlier of the exercise date or the contractual term date. At July 27, 2019, the intrinsic value per share of the fiscal 2013 and fiscal 2014 awards were $19.71 and $12.62, respectively.

Restricted Stock. We granted 166,399 shares of restricted stock to employees during the first quarter of fiscal 2020. We also have shares of restricted stock outstanding from previous grants. We issue restricted stock at no cost to the employees and the shares are held in an escrow account until the vesting period ends. If a recipient’s employment ends during the escrow period (other than through death or disability), the shares are returned at no cost to the company. We account for restricted stock awards as equity-based awards because when they vest, they will be settled in common shares. The weighted-average fair value of the restricted stock awarded in the first quarter of fiscal 2020 was $30.24 per share, the market value of our common shares on the date of grant. We estimate forfeiture rates based on our employees' forfeiture history and believe they will approximate future results. We recognize compensation expense for restricted stock over the vesting period equal to the fair value on the grant date of the award. Restricted stock awards vest at 25% per year, beginning one year from the grant date over a term of four years.

Performance Shares. During the first quarter of fiscal 2020, we granted 155,605 performance-based shares. We also have performance-based share awards outstanding from previous grants. Payout of these grants depends on our financial performance (80%) and a market-based condition based on the total return our shareholders receive on their investment in our stock relative to returns earned through investments in other public companies (20%). The performance share opportunity ranges from 50% of the employee’s target award if minimum performance requirements are met to a maximum of 200% of the target award based on the attainment of certain financial and shareholder-return goals over a specific performance period, which is generally three fiscal years.

We account for performance-based shares as equity-based awards because when they vest, they will be settled in common shares. We estimate forfeiture rates based on our employees' forfeiture history and believe they will approximate future results. For shares that vest based on our results relative to the performance goals, we expense as compensation cost the fair value of the shares as of the day we granted the awards recognized over the performance period, taking into account the probability that we will satisfy the performance goals. The fair value of each share of the awards we granted in fiscal 2020 that vest based on attaining performance goals was $28.68, the market value of our common shares on the date we granted the awards less the dividends we expect to pay before the shares vest. For shares that vest based on market conditions, we use a Monte Carlo valuation model to estimate each share’s fair value as of the date of grant. The Monte Carlo valuation model uses multiple simulations to evaluate our probability of achieving various stock price levels to determine our expected performance ranking relative to our peer group. For shares that vest based on market conditions, we expense compensation cost, net of estimated forfeitures, over the vesting period regardless of whether the market condition is ultimately satisfied. Based on the Monte Carlo model, the fair value as of the grant date of the fiscal 2020 grant of shares that vest based on market conditions was $38.75.

Accumulated Other Comprehensive Loss

3 Months Ended

Jul. 27, 2019

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

Note 11: Accumulated Other Comprehensive Loss

The activity in accumulated other comprehensive loss for the quarters ended July 27, 2019, and July 28, 2018, is as follows:


					Unrealized
			Change in		gain		Net pension		Accumulated
			fair value		on		amortization		other
	Translation		of cash		marketable		and net		comprehensive
(Unaudited, amounts in thousands)	adjustment		flow hedge		securities		actuarial loss		loss
Balance at April 27, 2019	$	50	$	87	$	6	$	(3,605)	$	(3,462)
Changes before reclassifications		128		—		143		—		271
Reclassification of certain income tax effects (1)		—		(97)		258		(708)		(547)
Amounts reclassified to net income		—		5		—		55		60
Tax effect		—		(1)		(35)		(14)		(50)
Other comprehensive income (loss) attributable to La-Z-Boy Incorporated		128		(93)		366		(667)		(266)
Balance at July 27, 2019	$	178	$	(6)	$	372	$	(4,272)	$	(3,728)

(1)

Income tax effects of the Tax Cuts and Jobs Act are reclassified from AOCI to retained earnings due to adoption of ASU 2018-02.


			Change in				Net pension
			fair value		Unrealized		amortization		Accumulated
			of cash		gain on		and net		other
	Translation		flow		marketable		actuarial		comprehensive
(Unaudited, amounts in thousands)	adjustment		hedge		securities		loss		loss
Balance at April 28, 2018	$	2,388	$	154	$	1,376	$	(29,117)	$	(25,199)
Changes before reclassifications		(2,961)		(509)		73		—		(3,397)
Cumulative effect adjustment for investments (1)		—		—		(1,637)		—		(1,637)
Amounts reclassified to net income		—		67		(19)		686		734
Tax effect		—		109		(13)		(170)		(74)
Other comprehensive income attributable to La-Z-Boy Incorporated		(2,961)		(333)		(1,596)		516		(4,374)
Balance at July 28, 2018	$	(573)	$	(179)	$	(220)	$	(28,601)	$	(29,573)

(1)

The cumulative effect adjustment for investments is composed of $2.1 million of unrealized gains on equity investments offset by $0.5 million of tax expense. We reclassified the net $1.6 million of cumulative effect adjustment from accumulated other comprehensive loss to retained earnings as a result of adopting Accounting Standards Update 2016-01 (see Note 1 for further information).

We reclassified the unrealized gain/(loss) on marketable securities from accumulated other comprehensive loss to net income through other income (expense), net in our consolidated statement of income, reclassified the change in fair value of cash flow hedges to net income through cost of sales, and reclassified the net pension amortization to net income through other income (expense), net.

The components of non-controlling interest for the quarters ended July 27, 2019, and July 28, 2018, were as follows:


	Quarter Ended
(Unaudited, amounts in thousands)	7/27/19		7/28/18
Balance as of the beginning of the period	$	14,468	$	13,035
Net income		(81)		648
Other comprehensive income		486		(1,228)
Balance as of the end of the period	$	14,873	$	12,455

Revenue Recognition

3 Months Ended

Jul. 27, 2019

Revenue Recognition

Revenue Recognition

Note 12: Revenue Recognition

Our revenue is primarily derived from product sales. We report product sales net of discounts and recognize them when control (rights and obligations associated with the product) passes to the customer. For sales to furniture retailers or distributors, control typically transfers when we ship product. In cases where we sell directly to the end consumer, control of the product is generally transferred upon delivery.

For shipping and handling activities, we have elected to apply the accounting policy election permitted in ASC 606-10-25-18B, which allows an entity to account for shipping and handling activities as fulfillment activities (rather than as a promised good or service) when the activities are performed even if those activities are performed after the control of the good has been transferred. We expense shipping and handling costs at the time we recognize revenue in accordance with this election.

For sales tax, we elected to apply the accounting policy election permitted in ASC 606-10-32-2A, which allows an entity to exclude from the measurement of the transaction price all taxes imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer, including sales, use, excise, value-added, and franchise taxes (collectively referred to as sales taxes). This allows us to present revenue net of these certain types of taxes.

The following table disaggregates our revenue by product category by segment or unit for the quarter ended July 27, 2019:


							Corporate
(Unaudited, amounts in thousands)	Upholstery		Casegoods		Retail		and Other		Total
Motion Upholstery Furniture	$	179,522	$	—	$	85,184	$	—	$	264,706
Stationary Upholstery Furniture		87,509		4,144		29,153		22,952		143,758
Bedroom Furniture		—		8,193		1,447		1,182		10,822
Dining Room Furniture		—		5,405		2,599		394		8,398
Occasional Furniture		312		10,823		5,125		361		16,621
Other (1)		26,073		(1,430)		19,488		(4,337)		39,794
Total	$	293,416	$	27,135	$	142,996	$	20,552		484,099

				Eliminations						(70,466)
				Consolidated Net Sales					$	413,633

(1)

Primarily includes revenue for delivery, advertising, royalties, parts, accessories, after-treatment products, tariff surcharges, discounts & allowances, rebates and other sales incentives.

The following table disaggregates our revenue by product category by segment for the quarter ended July 28, 2018:



(Unaudited, amounts in thousands)	Upholstery		Casegoods		Retail		Total
Motion Upholstery Furniture	$	187,659	$	—	$	74,957	$	262,616
Stationary Upholstery Furniture		85,290		3,942		23,164		112,396
Bedroom Furniture		—		8,364		855		9,219
Dining Room Furniture		—		5,929		1,583		7,512
Occasional Furniture		393		11,988		3,974		16,355
Other (1)		20,056		(1,837)		14,695		32,914
Total	$	293,398	$	28,386	$	119,228		441,012

				Corporate and Other (2)				3,865
				Eliminations				(60,182)
				Consolidated Net Sales			$	384,695

(1)

Primarily includes revenue for delivery, advertising, royalties, parts, accessories, after-treatment products, discounts & allowances, rebates and other sales incentives

(2)

Primarily includes revenue for royalties and intercompany commissions

Motion Upholstery Furniture - Includes gross revenue for upholstered furniture, such as recliners, sofas, loveseats, chairs, sectionals and modulars that have a mechanism that allows the back of the product to recline or the product's footrest to extend. This gross revenue includes sales to La-Z-Boy Furniture Galleries^® stores (including company-owned stores), operators of La-Z-Boy Comfort Studio^® locations, England Custom Comfort Center locations, other major dealers, independent retailers, and the end consumer.

Stationary Upholstery Furniture - Includes gross revenue for upholstered furniture, such as sofas, loveseats, chairs, sectionals, modulars, and ottomans that do not have a mechanism. This gross revenue includes sales to La-Z-Boy Furniture Galleries^® stores (including company-owned stores), operators of La-Z-Boy Comfort Studio^® locations, England Custom Comfort Center locations, other major dealers, independent retailers, and the end consumer.

Bedroom Furniture - Includes gross revenue for casegoods furniture typically found in a bedroom, such as beds, chests, dressers, nightstands and benches. This gross revenue includes sales to La-Z-Boy Furniture Galleries^® stores (including company-owned stores), independent retailers, and the end consumer.

Dining Room Furniture - Includes gross revenue for casegoods furniture typically found in a dining room, such as dining tables, dining chairs, storage units and stools. This gross revenue includes sales to La-Z-Boy Furniture Galleries^® stores (including company-owned stores), independent retailers, and the end consumer.

Occasional Furniture - Includes gross revenue for casegoods furniture found throughout the home, such as cocktail tables, chairsides, sofa tables, end tables, and entertainment centers. This gross revenue includes sales to La-Z-Boy Furniture Galleries^® stores (including company-owned stores), independent retailers, and the end consumer.

Our consolidated balance sheet includes current assets of $18.9 million that we reported as other receivables. These other receivables represent the remaining consideration to which we are entitled prior to fulfilling our performance obligation. At the beginning of fiscal 2020, we had $17.0 million of other receivables.

We receive deposits from end consumers before we recognize revenue, resulting in customer deposits, and in some cases we have the unconditional right to collect the remaining portion of the order price before we fulfill our performance obligation, resulting in deferred revenue (collectively, the “contract liabilities”). At July 27, 2019, we included $48.8 million of customer deposits and $18.9 million of deferred revenues in accrued expenses and other current liabilities on our consolidated balance sheet. At the beginning of fiscal 2020, we had $42.8 million of customer deposits and $17.0 million of deferred revenues. During the quarter ended July 27, 2019, we recognized revenue of $52.4 million related to our contract liabilities.

We have elected the practical expedient permitted in ASC 606-10-32-18, which allows an entity to recognize the promised amount of consideration without adjusting for the effects of a significant financing component if the contract has a duration of one year or less. As our contracts typically are less than one year in length and do not have significant financing components, we have not adjusted consideration.

Segment Information

3 Months Ended

Jul. 27, 2019

Segment Information

Segment Information

Note 13: Segment Information

Our reportable operating segments are the Upholstery segment, the Casegoods segment and the Retail segment.

Upholstery Segment. Our Upholstery segment is our largest business segment and consists primarily of two operating segments: La-Z-Boy, our largest operating segment, and the operating segment for our England subsidiary. The Upholstery segment also includes our international wholesale businesses. We aggregate these operating segments into one reportable segment because they are economically similar and because they meet the other aggregation criteria for determining reportable segments. Our Upholstery segment manufactures and imports upholstered furniture such as recliners and motion furniture, sofas, loveseats, chairs, sectionals, modulars, ottomans and sleeper sofas. The Upholstery segment sells directly to La-Z-Boy Furniture Galleries^® stores, operators of La-Z-Boy Comfort Studio^® locations and England Custom Comfort Center locations, major dealers, and a wide cross-section of other independent retailers.

Casegoods Segment. Our Casegoods segment consists of one operating segment that sells furniture under three brands: American Drew^®, Hammary^®, and Kincaid^®. The Casegoods segment is an importer, marketer, and distributor of casegoods (wood) furniture such as bedroom sets, dining room sets, entertainment centers and occasional pieces, and also manufactures some coordinated upholstered furniture. The Casegoods segment sells directly to major dealers, as well as La-Z-Boy Furniture Galleries^® stores, and a wide cross-section of other independent retailers.

Retail Segment. Our Retail segment consists of one operating segment comprised of our 155 company-owned La-Z-Boy Furniture Galleries^® stores. The Retail segment sells primarily upholstered furniture, in addition to some casegoods and other accessories, to end consumers through these stores.

Corporate & Other. Corporate & Other includes the shared costs for corporate functions, including human resources, information technology, finance 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 e-commerce 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 exclusively online through its website, www.joybird.com. None of the operating segments included in Corporate & Other meet the requirements of reportable segments.


	Quarter Ended
(Unaudited, amounts in thousands)	7/27/19		7/28/18
Sales
Upholstery segment:
Sales to external customers	$	230,767	$	240,054
Intersegment sales		62,649		53,344
Upholstery segment sales		293,416		293,398

Casegoods segment:
Sales to external customers		22,006		24,403
Intersegment sales		5,129		3,983
Casegoods segment sales		27,135		28,386

Retail segment sales		142,996		119,228

Corporate and Other:
Sales to external customers		17,864		1,010
Intersegment sales		2,688		2,855
Corporate and Other sales		20,552		3,865

Eliminations		(70,466)		(60,182)
Consolidated sales	$	413,633	$	384,695

Operating Income (Loss)
Upholstery segment	$	26,267	$	23,884
Casegoods segment		2,597		3,080
Retail segment		8,477		4,458
Corporate and Other		(13,919)		(8,262)
Consolidated operating income		23,422		23,160
Interest expense		(318)		(104)
Interest income		727		602
Other income (expense), net		(760)		892
Income before income taxes	$	23,071	$	24,550

Earnings per Share

3 Months Ended

Jul. 27, 2019

Earnings per Share

Earnings per Share

Note 15: Earnings per Share

Certain share-based compensation awards that entitle their holders to receive non-forfeitable dividends prior to vesting are considered participating securities. Prior to fiscal 2019, we granted restricted stock awards that contained non-forfeitable rights to dividends on unvested shares, and we are required to include these participating securities in calculating our basic earnings per common share, using the two-class method. The restricted stock awards we granted in fiscal 2019 and fiscal 2020 do not have non-forfeitable rights to dividends

and therefore are not considered participating securities. The dividends on the restricted stock awards granted in fiscal 2019 and fiscal 2020 are and will continue to be held in escrow until the stock awards vest at which time we will pay any accumulated dividends.

The following is a reconciliation of the numerators and denominators we used in our computations of basic and diluted earnings per share:


	Quarter Ended
(Unaudited, amounts in thousands)	7/27/19		7/28/18
Numerator (basic and diluted):
Net income attributable to La-Z-Boy Incorporated	$	18,069	$	18,303
Income allocated to participating securities		(39)		(76)
Net income available to common Shareholders	$	18,030	$	18,227

Denominator:
Basic weighted average common shares outstanding		46,820		46,716
Add:
Contingent common shares		130		66
Stock option dilution		175		379
Diluted weighted average common shares outstanding		47,125		47,161

Earnings per Share:
Basic	$	0.39	$	0.39
Diluted	$	0.38	$	0.39

The values for contingent common shares set forth above reflect the dilutive effect of common shares that we would have issued to employees under the terms of performance-based share awards if the relevant performance period for the award had been the reporting period.

We had outstanding options to purchase 0.4 million shares for the quarter ended July 27, 2019, with a weighted average exercise price of $33.15. We excluded the effect of these options from our diluted share calculation since the weighted average exercise price of the options was higher than the average market price and including the options’ effect would have been anti-dilutive. Similarly, we excluded options to purchase 0.4 million shares from the diluted share calculation for the quarter ended July 28, 2018.

Fair Value Measurements

3 Months Ended

Jul. 27, 2019

Fair Value Measurements

Fair Value Measurements

Note 16: Fair Value Measurements

Accounting standards require that we put financial assets and liabilities into one of three categories based on the inputs we use to value them:

●

Level 1 — Financial assets and liabilities the values of which are based on unadjusted quoted market prices for identical assets and liabilities in an active market that we have the ability to access.

●

Level 2 — Financial assets and liabilities the values of which are based on quoted prices in markets that are not active or on model inputs that are observable for substantially the full term of the asset or liability.

●

Level 3 — Financial assets and liabilities the values of which are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.

Accounting standards require that in making fair value measurements, we use observable market data when available. When inputs used to measure fair value fall within different levels of the hierarchy, we categorize the fair value measurement as being in the lowest level that is significant to the measurement. We recognize transfers between levels of the fair value hierarchy at the end of the reporting period in which they occur.

In addition to assets and liabilities that we record at fair value on a recurring basis, we are required to record assets and liabilities at fair value on a non-recurring basis. We measure non-financial assets such as other intangible assets, goodwill, and other long-lived assets at fair value when there is an indicator of impairment, and we record them at fair value only when we recognize an impairment loss.

The following table presents the fair value hierarchy for those assets and liabilities we measured at fair value on a recurring basis at July 27, 2019, and April 27, 2019. There were no transfers into or out of Level 1, Level 2, or Level 3 for any of the periods presented.


At July 27, 2019
	Fair Value Measurements
(Unaudited, amounts in thousands)	Level 1		Level 2		Level 3
Assets
Marketable securities	$	10	$	35,627	$	—
Held-to-maturity investments		3,454		—		—
Cost basis investments		—		—		11,979
Total assets	$	3,464	$	35,627	$	11,979

Liabilities
Contingent consideration liability	$	—	$	—	$	7,900


At April 27, 2019
	Fair Value Measurements
(Unaudited, amounts in thousands)	Level 1		Level 2		Level 3
Assets
Marketable securities	$	5	$	34,390	$	—
Held-to-maturity investments		3,341		—		—
Cost basis investment		—		—		11,979
Total assets	$	3,346	$	34,390	$	11,979

Liabilities
Contingent consideration liability	$	—	$	—	$	7,900

At July 27, 2019 and April 27, 2019, we held marketable securities intended to enhance returns on our cash and to fund future obligations of our non-qualified defined benefit retirement plan, as well as marketable securities to fund future obligations of our executive deferred compensation plan and our performance compensation retirement plan. We also held other fixed income and cost basis investments.

The fair value measurements for our Level 1 and Level 2 securities are based on quoted prices in active markets, as well as through broker quotes and independent valuation providers, multiplied by the number of shares owned exclusive of any transaction costs. At July 27, 2019, our Level 3 investments included preferred shares of two privately-held companies, and a warrant to purchase common shares of one of these privately-

held companies. The fair value for our Level 3 investments is not readily available so we estimate the fair value as costs minus impairment, if any, plus or minus adjustments resulting from observable price changes in orderly transactions for identical or similar investments with the same issuer. Our Level 3 liability includes our contingent consideration liabilities on recent acquisitions. We estimated the provisional fair value of the $7.9 million contingent consideration liability for the acquisition of Joybird. The fair value of contingent consideration is based on future revenues and earnings in fiscal 2021 and fiscal 2023. The fair value was determined using a variation of the income approach, known as the real options method, whereby revenue and earnings were simulated over the earn-out periods in a risk-neutral framework using Geometric Brownian Motion. For each simulation path, the potential earn-out payments were calculated based on management’s probability estimates for achievement of the revenue and earnings milestones and then were discounted to the valuation date using a discount rate of 4.2% for the fiscal 2021 milestone and 4.7% for the fiscal 2023 milestone. We estimated the fair value of the remainder of our Level 3 contingent consideration liabilities using the present value of the probability-weighted future cash flows.

There were no changes to the fair value of our Level 3 assets and liabilities during the first quarter of fiscal 2020. Our asset leveling presented above does not include certain marketable securities investments that are measured at fair value using net asset value per share under the practical expedient methodology. These investments are still included in the total fair value column of the table in our investment footnote (see Note 7). The fair value of the investments measured using net asset value at July 27, 2019, and April 27, 2019, was $11.4 million and $7.7 million, respectively.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Acquisitions (Tables)

3 Months Ended

Jul. 27, 2019

Joybird

Summary of fair values at the dates of acquisition


	Second quarter
	fiscal 2019
	Corporate and
	Other
(Amounts in thousands)	acquisitions
Fair value of consideration:
Cash (paid at closing)	$	37,482
Guaranteed payment		22,489
Acquisition earn-out		7,500
Assumption of liability		5,000
Working capital adjustment		(2,486)
Total fair value of consideration		69,985

Amounts recognized for assets acquired and liabilities assumed:
Inventory		5,258
Other current assets		3,733
Property, plant and equipment		2,057
Finite-lived tradename		6,400
Other long-term assets		3,647
Accounts payable		(8,222)
Customer deposits		(13,904)
Other current liabilities		(7,681)
Other long-term liabilities		(150)
Total identifiable net liabilities acquired		(8,862)

Goodwill	$	78,847

Inventories (Tables)

3 Months Ended

Jul. 27, 2019

Inventories

Summary of inventories


(Unaudited, amounts in thousands)	7/27/19		4/27/19
Raw materials	$	94,384	$	90,359
Work in process		13,514		13,728
Finished goods		111,469		114,478
FIFO inventories		219,367		218,565
Excess of FIFO over LIFO		(21,666)		(21,666)
Total inventories	$	197,701	$	196,899

Leases (Tables)

3 Months Ended

Jul. 27, 2019

Leases

Schedule of supplemental balance sheet information

Supplemental balance sheet information (in thousands) related to leases as of July 27, 2019:


Operating leases
ROU assets	$	312,312
Lease liabilities, short-term		64,031
Lease liabilities, long-term		262,264

Finance leases
ROU assets	$	121
Lease liabilities, short-term		127
Lease liabilities, long-term		—

Schedule of ROU assets by segment

The ROU assets by segment are as follows (in thousands) as of July 27, 2019:


Upholstery	$	55,057
Casegoods		2,205
Retail		248,338
Corporate & Other		6,833
Total ROU assets	$	312,433

Schedule of components of lease cost

The components of lease cost are as follows (in thousands) for the quarter ended July 27, 2019:


Operating lease cost	$	19,018
Financing lease cost		49
Short-term lease cost		25
Variable lease cost		40
Less: Sublease income		(628)
Total lease cost	$	18,504

Schedule of supplemental lease disclosures

The following table presents supplemental lease disclosures for the quarter ended July 27, 2019:


(Dollars in thousands)	Operating			Financing
Cash paid for amounts included in the measurement of lease liabilities	$	19,303		$	49
Lease liabilities arising from new ROU assets		14,353			—

Weighted-average remaining lease term (years)		6.6			0.8
Weighted-average discount rate		3.9	%		3.9	%

Schedule of undiscounted cash flows and minimum contractual obligations

The following table presents our undiscounted cash flows as of July 27, 2019 and our minimum contractual obligations on our leases as of April 27, 2019:


	7/27/19				4/27/19
(Amounts in thousands)	Operating Leases		Financing Leases		Operating Leases		Financing Leases
Within one year	$	75,357	$	129	$	76,508	$	180
After one year and within two years		68,610		—		71,544		19
After two years and within three years		55,219		—		58,763		—
After three years and within four years		43,029		—		46,541		—
After four years and within five years		34,193		—		36,082		—
After five years		93,658		—		102,782		—
Total lease payments		370,066		129	$	392,220	$	199
Less: Interest		43,771		2
Total lease obligations	$	326,295	$	127

Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Jul. 27, 2019

Goodwill and Other Intangible Assets

Roll-forward of goodwill


	Upholstery		Retail		Corporate		Total
(Unaudited, amounts in thousands)	Segment		Segment		and Other		Goodwill
Balance at April 27, 2019	$	12,148	$	94,103	$	79,616	$	185,867
Acquisition adjustment		—		—		(769)		(769)
Translation adjustment		(500)		77		—		(423)
Balance at July 27, 2019	$	11,648	$	94,180	$	78,847	$	184,675

Roll-forward of other intangible assets - Indefinite-lived


	Indefinite-		Finite-		Indefinite-				Total
	Lived		Lived		Lived		Other		Other
	Trade		Trade		Reacquired		Intangible		Intangible
(Amounts in thousands)	Names		Names		Rights		Assets		Assets
Balance at April 27, 2019	$	1,155	$	5,801	$	20,117	$	2,834	$	29,907
Amortization		—		(200)		—		(55)		(255)
Translation adjustment		—		—		58		(115)		(57)
Balance at July 27, 2019	$	1,155	$	5,601	$	20,175	$	2,664	$	29,595

Roll-forward of other intangible assets - Amortizable


	Indefinite-		Finite-		Indefinite-				Total
	Lived		Lived		Lived		Other		Other
	Trade		Trade		Reacquired		Intangible		Intangible
(Amounts in thousands)	Names		Names		Rights		Assets		Assets
Balance at April 27, 2019	$	1,155	$	5,801	$	20,117	$	2,834	$	29,907
Amortization		—		(200)		—		(55)		(255)
Translation adjustment		—		—		58		(115)		(57)
Balance at July 27, 2019	$	1,155	$	5,601	$	20,175	$	2,664	$	29,595

Investments (Tables)

3 Months Ended

Jul. 27, 2019

Investments

Summary of investments


(Unaudited, amounts in thousands)	7/27/19		4/27/19
Short-term investments:
Marketable securities	$	26,002	$	18,016
Held-to-maturity investments		3,454		3,341
Total short-term investments		29,456		21,357

Long-term investments:
Marketable securities		21,023		24,085
Cost basis investments		11,979		11,979
Total long-term investments		33,002		36,064

Total investments	$	62,458	$	57,421

Investments to enhance returns on cash	$	32,884	$	31,470
Investments to fund compensation/retirement plans	$	17,595	$	13,972
Other investments	$	11,979	$	11,979

Summary of unrealized gains, unrealized losses, and fair value by investment type


At July 27, 2019
	Gross		Gross
(Unaudited, amounts in thousands)	Unrealized Gains		Unrealized Losses		Fair Value
Equity securities	$	2,066	$	—	$	23,268
Fixed income		155		(47)		34,382
Other		324		(16)		4,808
Total securities	$	2,545	$	(63)	$	62,458


At April 27, 2019
	Gross		Gross
(Unaudited, amounts in thousands)	Unrealized Gains		Unrealized Losses		Fair Value
Equity securities	$	1,841	$	—	$	19,535
Fixed income		75		(111)		33,217
Other		258		(13)		4,669
Total securities	$	2,174	$	(124)	$	57,421

Summary of sales of marketable securities


	Quarter Ended
(Unaudited, amounts in thousands)	7/27/19		7/28/18
Proceeds from sales	$	4,060	$	4,762
Gross realized gains		6		75
Gross realized losses		(2)		(55)

Product Warranties (Tables)

3 Months Ended

Jul. 27, 2019

Product Warranties

Reconciliation of changes in product warranty liability


	Quarter Ended
(Unaudited, amounts in thousands)	7/27/19		7/28/18
Balance as of the beginning of the period	$	22,736	$	21,205
Accruals during the period		5,657		5,121
Settlements during the period		(5,557)		(5,233)
Balance as of the end of the period	$	22,836	$	21,093

Stock-Based Compensation (Tables)

3 Months Ended

Jul. 27, 2019

Stock-Based Compensation

Summary of total stock-based compensation expense


	Quarter Ended
(Unaudited, amounts in thousands)	7/27/19		7/28/18
Equity-based awards expense	$	1,675	$	2,040
Liability-based awards expense		(60)		166
Total stock-based compensation expense	$	1,615	$	2,206

Fair value assumptions for stock options


	Fiscal 2020
(Unaudited)	grant
Risk-free interest rate		2.19	%
Dividend rate		1.72	%
Expected life in years		5.0
Stock price volatility		34.27	%
Fair value per share	$	7.94

Accumulated Other Comprehensive Loss (Tables)

3 Months Ended

Jul. 27, 2019

Accumulated Other Comprehensive Loss

Activity in accumulated other comprehensive loss

The activity in accumulated other comprehensive loss for the quarters ended July 27, 2019, and July 28, 2018, is as follows:


					Unrealized
			Change in		gain		Net pension		Accumulated
			fair value		on		amortization		other
	Translation		of cash		marketable		and net		comprehensive
(Unaudited, amounts in thousands)	adjustment		flow hedge		securities		actuarial loss		loss
Balance at April 27, 2019	$	50	$	87	$	6	$	(3,605)	$	(3,462)
Changes before reclassifications		128		—		143		—		271
Reclassification of certain income tax effects (1)		—		(97)		258		(708)		(547)
Amounts reclassified to net income		—		5		—		55		60
Tax effect		—		(1)		(35)		(14)		(50)
Other comprehensive income (loss) attributable to La-Z-Boy Incorporated		128		(93)		366		(667)		(266)
Balance at July 27, 2019	$	178	$	(6)	$	372	$	(4,272)	$	(3,728)

(1)

Income tax effects of the Tax Cuts and Jobs Act are reclassified from AOCI to retained earnings due to adoption of ASU 2018-02.


			Change in				Net pension
			fair value		Unrealized		amortization		Accumulated
			of cash		gain on		and net		other
	Translation		flow		marketable		actuarial		comprehensive
(Unaudited, amounts in thousands)	adjustment		hedge		securities		loss		loss
Balance at April 28, 2018	$	2,388	$	154	$	1,376	$	(29,117)	$	(25,199)
Changes before reclassifications		(2,961)		(509)		73		—		(3,397)
Cumulative effect adjustment for investments (1)		—		—		(1,637)		—		(1,637)
Amounts reclassified to net income		—		67		(19)		686		734
Tax effect		—		109		(13)		(170)		(74)
Other comprehensive income attributable to La-Z-Boy Incorporated		(2,961)		(333)		(1,596)		516		(4,374)
Balance at July 28, 2018	$	(573)	$	(179)	$	(220)	$	(28,601)	$	(29,573)

(1)

Components of non-controlling interest


	Quarter Ended
(Unaudited, amounts in thousands)	7/27/19		7/28/18
Balance as of the beginning of the period	$	14,468	$	13,035
Net income		(81)		648
Other comprehensive income		486		(1,228)
Balance as of the end of the period	$	14,873	$	12,455

Revenue Recognition (Tables)

3 Months Ended

Jul. 27, 2019

Revenue Recognition

Schedule of disaggregation of revenue by product category by segment or unit

The following table disaggregates our revenue by product category by segment or unit for the quarter ended July 27, 2019:


							Corporate
(Unaudited, amounts in thousands)	Upholstery		Casegoods		Retail		and Other		Total
Motion Upholstery Furniture	$	179,522	$	—	$	85,184	$	—	$	264,706
Stationary Upholstery Furniture		87,509		4,144		29,153		22,952		143,758
Bedroom Furniture		—		8,193		1,447		1,182		10,822
Dining Room Furniture		—		5,405		2,599		394		8,398
Occasional Furniture		312		10,823		5,125		361		16,621
Other (1)		26,073		(1,430)		19,488		(4,337)		39,794
Total	$	293,416	$	27,135	$	142,996	$	20,552		484,099

				Eliminations						(70,466)
				Consolidated Net Sales					$	413,633

(1)

Primarily includes revenue for delivery, advertising, royalties, parts, accessories, after-treatment products, tariff surcharges, discounts & allowances, rebates and other sales incentives.

The following table disaggregates our revenue by product category by segment for the quarter ended July 28, 2018:



(Unaudited, amounts in thousands)	Upholstery		Casegoods		Retail		Total
Motion Upholstery Furniture	$	187,659	$	—	$	74,957	$	262,616
Stationary Upholstery Furniture		85,290		3,942		23,164		112,396
Bedroom Furniture		—		8,364		855		9,219
Dining Room Furniture		—		5,929		1,583		7,512
Occasional Furniture		393		11,988		3,974		16,355
Other (1)		20,056		(1,837)		14,695		32,914
Total	$	293,398	$	28,386	$	119,228		441,012

				Corporate and Other (2)				3,865
				Eliminations				(60,182)
				Consolidated Net Sales			$	384,695

(1)

Primarily includes revenue for delivery, advertising, royalties, parts, accessories, after-treatment products, discounts & allowances, rebates and other sales incentives

(2)

Primarily includes revenue for royalties and intercompany commissions

Segment Information (Tables)

3 Months Ended

Jul. 27, 2019

Segment Information

Schedule of segment information


	Quarter Ended
(Unaudited, amounts in thousands)	7/27/19		7/28/18
Sales
Upholstery segment:
Sales to external customers	$	230,767	$	240,054
Intersegment sales		62,649		53,344
Upholstery segment sales		293,416		293,398

Casegoods segment:
Sales to external customers		22,006		24,403
Intersegment sales		5,129		3,983
Casegoods segment sales		27,135		28,386

Retail segment sales		142,996		119,228

Corporate and Other:
Sales to external customers		17,864		1,010
Intersegment sales		2,688		2,855
Corporate and Other sales		20,552		3,865

Eliminations		(70,466)		(60,182)
Consolidated sales	$	413,633	$	384,695

Operating Income (Loss)
Upholstery segment	$	26,267	$	23,884
Casegoods segment		2,597		3,080
Retail segment		8,477		4,458
Corporate and Other		(13,919)		(8,262)
Consolidated operating income		23,422		23,160
Interest expense		(318)		(104)
Interest income		727		602
Other income (expense), net		(760)		892
Income before income taxes	$	23,071	$	24,550

Earnings per Share (Tables)

3 Months Ended

Jul. 27, 2019

Earnings per Share

Reconciliation of numerators and denominators used in the computation of basic and diluted earnings per share


	Quarter Ended
(Unaudited, amounts in thousands)	7/27/19		7/28/18
Numerator (basic and diluted):
Net income attributable to La-Z-Boy Incorporated	$	18,069	$	18,303
Income allocated to participating securities		(39)		(76)
Net income available to common Shareholders	$	18,030	$	18,227

Denominator:
Basic weighted average common shares outstanding		46,820		46,716
Add:
Contingent common shares		130		66
Stock option dilution		175		379
Diluted weighted average common shares outstanding		47,125		47,161

Earnings per Share:
Basic	$	0.39	$	0.39
Diluted	$	0.38	$	0.39

Fair Value Measurements (Tables)

3 Months Ended

Jul. 27, 2019

Fair Value Measurements

Fair value hierarchy for assets and liabilities measured at fair value on a recurring basis


At July 27, 2019
	Fair Value Measurements
(Unaudited, amounts in thousands)	Level 1		Level 2		Level 3
Assets
Marketable securities	$	10	$	35,627	$	—
Held-to-maturity investments		3,454		—		—
Cost basis investments		—		—		11,979
Total assets	$	3,464	$	35,627	$	11,979

Liabilities
Contingent consideration liability	$	—	$	—	$	7,900


At April 27, 2019
	Fair Value Measurements
(Unaudited, amounts in thousands)	Level 1		Level 2		Level 3
Assets
Marketable securities	$	5	$	34,390	$	—
Held-to-maturity investments		3,341		—		—
Cost basis investment		—		—		11,979
Total assets	$	3,346	$	34,390	$	11,979

Liabilities
Contingent consideration liability	$	—	$	—	$	7,900

Basis of Presentation - Plant Closing (Details) $ in Millions		3 Months Ended
	Aug. 08, 2019 ft² employee	Jul. 27, 2019 USD ($)
Cost of sales
Plant Closing
Severance costs \| $		$ 1.5
Redlands, California
Plant Closing
Number of employees	350
Area of land \| ft²	200,000
Redlands, California \| Product Concentration Risk \| La-Z-Boy branded business total upholstery production and manufactures recliners, motion sofas and classics (high-leg recliners)
Plant Closing
Percentage of production	10.00%
Newton, Mississippi
Plant Closing
Number of employees	525
Number of employees impacted by transition of Newton Leather Cut-and-sew operation	105

Acquisitions - Corporate and Other (Details) $ in Thousands	Jul. 30, 2018 USD ($) installment person item	Jul. 27, 2019 USD ($)	Apr. 27, 2019 USD ($)
Amounts recognized for identifiable assets acquired and liabilities assumed:
Goodwill		$ 184,675	$ 185,867
Joybird
Acquisitions
Total guaranteed payments	$ 75,000
Receivable for working capital adjustment	2,500
Prepaid compensation included in guaranteed payments	$ 7,500
Period for payment of liabilities assumed as consideration	2 years
Remaining guaranteed payments	$ 25,000
Number of annual installments \| installment	5
Annual installments of remaining guaranteed payments	$ 5,000
Number of future earnout opportunities \| item	2
Number of co-founders covered by forfeitable initial payment \| person	4
Period for amortization of prepaid compensation	2 years
Finite-lived intangible asset, useful life	8 years
Contingent consideration, low end of range	$ 0
Contingent consideration, high end of range	65,000
Fair value of consideration:
Cash (paid at closing)	37,482
Guaranteed payment	22,489
Acquisition earn-out	7,500
Assumption of liability	5,000
Working capital adjustment	(2,486)
Total fair value of consideration	69,985
Amounts recognized for identifiable assets acquired and liabilities assumed:
Inventory	5,258
Other current assets	3,733
Property, plant and equipment	2,057
Finite-lived tradename	6,400
Other long-term assets	3,647
Accounts payable	(8,222)
Customer deposits	(13,904)
Other current liabilities	(7,681)
Other long-term liabilities	(150)
Total identifiable net assets acquired	(8,862)
Goodwill	$ 78,847

Restricted Cash (Details) - USD ($) $ in Thousands	Jul. 27, 2019	Apr. 27, 2019	Jul. 28, 2018	Apr. 28, 2018
Restricted Cash
Cash and cash equivalents	$ 111,622	$ 129,819	$ 134,247
Restricted cash	1,970	1,968	2,358
Total cash, cash equivalents and restricted cash	$ 113,592	$ 131,787	$ 136,605	$ 136,871

Inventories (Details) - USD ($) $ in Thousands	Jul. 27, 2019	Apr. 27, 2019
Inventories
Raw materials	$ 94,384	$ 90,359
Work in process	13,514	13,728
Finished goods	111,469	114,478
FIFO inventories	219,367	218,565
Excess of FIFO over LIFO	(21,666)	(21,666)
Total inventories	$ 197,701	$ 196,899

Leases - Supplemental Balance Sheet Information (Details) $ in Thousands	Jul. 27, 2019 USD ($)
Leases
Operating leases, ROU assets, net	$ 312,312
Operating lease liabilities, short-term	64,031
Operating lease liabilities, long-term	262,264
Finance lease, ROU assets, net	121
Finance lease liabilities, short-term	$ 127

Leases - Lease cost (Details) $ in Thousands	3 Months Ended
Leases - Lease cost (Details) $ in Thousands	Jul. 27, 2019 USD ($)
Lease cost
Operating lease cost	$ 19,018
Financing lease cost	49
Short-term lease cost	25
Variable lease cost	40
Less: Sublease income	(628)
Total lease cost	$ 18,504

Leases - Supplemental Lease Disclosures (Details) $ in Thousands	3 Months Ended
	Jul. 27, 2019 USD ($)
Leases
Cash paid for amounts included in the measurement of lease liabilities, operating	$ 19,303
Cash paid for amounts included in the measurement of lease liabilities, financing	49
Lease liabilities arising from new ROU assets, operating	$ 14,353
Lease term and discount rate
Operating lease, Weighted-average remaining lease term (years)	6 years 7 months 6 days
Finance lease, Weighted-average remaining lease term (years)	9 months 18 days
Operating Lease, Weighted-average discount rate	3.90%
Finance lease, Weighted-average discount rate	3.90%

Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands	Jul. 27, 2019	Apr. 27, 2019
Operating Leases
Within one year	$ 75,357
After one year and within two years	68,610
After two years and within three years	55,219
After three years and within four years	43,029
After four years and within five years	34,193
After five years	93,658
Total lease payments	370,066
Less: Interest	43,771
Total lease obligations	326,295
Within one year		$ 76,508
After one year and within two years		71,544
After two years and within three years		58,763
After three years and within four years		46,541
After four years and within five years		36,082
After five years		102,782
Total lease payments		392,220
Financing Leases
Within one year	129
Total lease payments	129
Less: Interest	2
Total lease obligations	$ 127
Within one year		180
After one year and within two years		19
Total lease payments		$ 199

Goodwill and Other Intangible Assets - Goodwill Roll-forward II (Details) $ in Thousands	3 Months Ended
	Jul. 27, 2019 USD ($)
Roll-forward of goodwill
Balance at beginning of period	$ 185,867
Acquisition adjustment	(769)
Translation adjustment	(423)
Balance at end of period	184,675
Upholstery Segment
Roll-forward of goodwill
Balance at beginning of period	12,148
Translation adjustment	(500)
Balance at end of period	11,648
Retail Segment
Roll-forward of goodwill
Balance at beginning of period	94,103
Translation adjustment	77
Balance at end of period	94,180
Corporate and Other
Roll-forward of goodwill
Balance at beginning of period	79,616
Acquisition adjustment	(769)
Balance at end of period	$ 78,847

Goodwill and Other Intangible Assets - Intangible Assets (Details) $ in Thousands	3 Months Ended
	Jul. 27, 2019 USD ($)
Roll-forward of other intangible assets
Balance at beginning of period	$ 29,907
Amortization	(255)
Translation adjustment	(57)
Balance at end of period	29,595
Trade Names
Roll-forward of other intangible assets
Balance at beginning of period	5,801
Amortization	(200)
Balance at end of period	5,601
Other Intangible Assets
Roll-forward of other intangible assets
Balance at beginning of period	2,834
Amortization	(55)
Translation adjustment	(115)
Balance at end of period	2,664
Trade Names
Roll-forward of other intangible assets
Balance at beginning of period	1,155
Balance at end of period	1,155
Reacquired Rights
Roll-forward of other intangible assets
Balance at beginning of period	20,117
Translation adjustment	58
Balance at end of period	$ 20,175
Upholstery Segment \| Maximum
Other intangible assets
Useful life	15 years
Corporate and Other
Other intangible assets
Useful life	8 years

Investments - Components (Details) - USD ($) $ in Thousands	Jul. 27, 2019	Apr. 27, 2019
Investments
Total investments	$ 62,458	$ 57,421
Investments to enhance returns on cash
Investments
Total investments	32,884	31,470
Investments to fund compensation/retirement plans
Investments
Total investments	17,595	13,972
Other investments
Investments
Total investments	11,979	11,979
Other current assets
Investments
Marketable securities	26,002	18,016
Held-to-maturity investments	3,454	3,341
Total investments	29,456	21,357
Other long-term assets
Investments
Marketable securities	21,023	24,085
Cost basis investments	11,979	11,979
Total investments	$ 33,002	$ 36,064

Investments - Sales and Maturities (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 27, 2019	Jul. 28, 2018
Sales of marketable securities
Proceeds from sales	$ 4,060	$ 4,762
Gross realized gains	6	75
Gross realized losses	(2)	$ (55)
Fair value of available-for-sale securities by contractual maturity
Fair value, available-for-sale securities with contractual maturity within one year	22,600
Fair value, available-for-sale securities with contractual maturity within two to five years	9,400
Fair value, available-for-sale securities with contractual maturity within six to ten years	1,600
Fair value, available-for-sale securities with contractual maturity after ten years	$ 800

Employee Benefits - Pension (Details) $ in Thousands	3 Months Ended
Employee Benefits - Pension (Details) $ in Thousands	Jul. 28, 2018 USD ($)
Net periodic pension costs
Service cost	$ 323
Interest cost	1,116
Expected return on plan assets	(1,136)
Net amortization	639
Net periodic pension cost	$ 942

Product Warranties (Details) - USD ($) $ in Thousands	3 Months Ended
Product Warranties (Details) - USD ($) $ in Thousands	Jul. 27, 2019	Jul. 28, 2018	Apr. 27, 2019
Reconciliation of changes in product warranty liability
Balance as of the beginning of the period	$ 22,736	$ 21,205
Accruals during the period	5,657	5,121
Settlements during the period	(5,557)	(5,233)
Balance as of the end of the period	22,836	$ 21,093
Product warranty liability included in accrued expenses and other current liabilities	$ 13,900		$ 13,900
Minimum \| Upholstery Segment
Product Warranties
Percentage of warranty liability relating to the segment	90.00%
Fabric and leather \| Upholstery Segment
Product Warranties
Warranty term	1 year
Cushions and padding \| Minimum \| Upholstery Segment
Product Warranties
Warranty term	1 year
Cushions and padding \| Maximum \| Upholstery Segment
Product Warranties
Warranty term	10 years
Labor costs relating to parts \| Upholstery Segment
Product Warranties
Warranty term	1 year

Stock-Based Compensation - Stock Options (Details) - Stock Options	3 Months Ended
	Jul. 27, 2019 $ / shares shares
Stock-Based Compensation
Shares granted (in shares) \| shares	248,662
Fair value assumptions
Risk-free interest rate (as a percent)	2.19%
Dividend rate (as a percent)	1.72%
Expected life in years	5 years
Stock price volatility (as a percent)	34.27%
Fair value per share (in dollars per share) \| $ / shares	$ 7.94
Minimum
Stock-Based Compensation
Vesting period	1 year
Period of recognition of expenses for retirement-eligible employees from the grant date	10 months
Maximum
Stock-Based Compensation
Vesting period	4 years

Stock-Based Compensation - SARs (Details) - Stock Appreciation Rights	3 Months Ended
	Jul. 27, 2019 $ / shares shares
Stock-Based Compensation
Term of award	10 years
Fiscal 2013 Grant
Stock-Based Compensation
Number of awards outstanding (in shares) \| shares	7,149
Fair value per share (in dollars per share) \| $ / shares	$ 19.71
Fiscal 2014 Grant
Stock-Based Compensation
Number of awards outstanding (in shares) \| shares	14,580
Fair value per share (in dollars per share) \| $ / shares	$ 12.62

Stock-Based Compensation - Restricted Stock (Details) - Restricted Stock	3 Months Ended
	Jul. 27, 2019 $ / shares shares
Stock-Based Compensation
Number of shares or units granted \| shares	166,399
Fair value per share (in dollars per share) \| $ / shares	$ 30.24
Percentage vesting each year from date of grant	25.00%
Period from grant date for first vesting	1 year
Vesting period	4 years

Stock-Based Compensation - Performance Awards (Details)	3 Months Ended
Stock-Based Compensation - Performance Awards (Details)	Jul. 27, 2019 $ / shares shares
Performance Awards
Stock-Based Compensation
Percentage of payout dependent on financial performance	80.00%
Percentage of payout dependent on total shareholder return	20.00%
Performance awards, performance period	3 years
Performance Awards \| Minimum
Stock-Based Compensation
Performance award opportunity as a percentage of target award	50.00%
Performance Awards \| Maximum
Stock-Based Compensation
Performance award opportunity as a percentage of target award	200.00%
Performance-Based Shares
Stock-Based Compensation
Number of shares or units granted \| shares	155,605
Performance-Based Shares, vesting based on performance goals \| Fiscal 2019 Grant
Stock-Based Compensation
Granted (in dollars per share)	$ 28.68
Performance Based Shares, vesting based on market conditions \| Fiscal 2019 Grant
Stock-Based Compensation
Granted (in dollars per share)	$ 38.75

Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 27, 2019	Jul. 28, 2018
Activity in accumulated other comprehensive loss
Balance	$ 682,508
Balance	683,265
Components of non-controlling interest
Balance as of the beginning of the period	14,468	$ 13,035
Net income	(81)	648
Other comprehensive income (loss)	486	(1,228)
Balance as of the end of the period	14,873	12,455
Accumulated Other Comprehensive Loss
Activity in accumulated other comprehensive loss
Balance	(3,462)	(25,199)
Changes before reclassifications	271	(3,397)
Reclassification of certain income tax effects (1)	(547)	(1,637)
Amounts reclassified to net income	60	734
Tax effect	(50)	(74)
Other comprehensive income (loss) attributable to La-Z-Boy Incorporated	(266)	(4,374)
Balance	(3,728)	(29,573)
Accumulated Other Comprehensive Loss \| ASU 2018-02
Activity in accumulated other comprehensive loss
Cumulative effect adjustment - tax expense	(547)
Translation adjustment
Activity in accumulated other comprehensive loss
Balance	50	2,388
Changes before reclassifications	128	(2,961)
Other comprehensive income (loss) attributable to La-Z-Boy Incorporated	128	(2,961)
Balance	178	(573)
Change in fair value of cash flow hedge
Activity in accumulated other comprehensive loss
Balance	87	154
Changes before reclassifications		(509)
Reclassification of certain income tax effects (1)	(97)
Amounts reclassified to net income	5	67
Tax effect	(1)	109
Other comprehensive income (loss) attributable to La-Z-Boy Incorporated	(93)	(333)
Balance	(6)	(179)
Unrealized gain on marketable securities
Activity in accumulated other comprehensive loss
Balance	6	1,376
Changes before reclassifications	143	73
Reclassification of certain income tax effects (1)	258	(1,637)
Amounts reclassified to net income		(19)
Tax effect	(35)	(13)
Other comprehensive income (loss) attributable to La-Z-Boy Incorporated	366	(1,596)
Balance	372	(220)
Unrealized gain on marketable securities \| ASU 2016-01 - Investments
Activity in accumulated other comprehensive loss
Reclassification of certain income tax effects (1)		1,600
Cumulative effect adjustment - unrealized gains on equity investments		(2,100)
Cumulative effect adjustment - tax expense		(500)
Net pension amortization and net actuarial loss
Activity in accumulated other comprehensive loss
Balance	(3,605)	(29,117)
Reclassification of certain income tax effects (1)	(708)
Amounts reclassified to net income	55	686
Tax effect	(14)	(170)
Other comprehensive income (loss) attributable to La-Z-Boy Incorporated	(667)	516
Balance	$ (4,272)	$ (28,601)

Revenue Recognition - Disaggregation (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 27, 2019	Jul. 28, 2018
Revenue Recognition
Consolidated Net Sales	$ 413,633	$ 384,695
Operating Segments
Revenue Recognition
Consolidated Net Sales	484,099	441,012
Operating Segments \| Motion Upholstery Furniture
Revenue Recognition
Consolidated Net Sales	264,706	262,616
Operating Segments \| Stationary Upholstery Furniture
Revenue Recognition
Consolidated Net Sales	143,758	112,396
Operating Segments \| Bedroom Furniture
Revenue Recognition
Consolidated Net Sales	10,822	9,219
Operating Segments \| Dining Room Furniture
Revenue Recognition
Consolidated Net Sales	8,398	7,512
Operating Segments \| Occasional Furniture
Revenue Recognition
Consolidated Net Sales	16,621	16,355
Operating Segments \| Other (1)
Revenue Recognition
Consolidated Net Sales	39,794	32,914
Operating Segments \| Upholstery Segment
Revenue Recognition
Consolidated Net Sales	293,416	293,398
Operating Segments \| Upholstery Segment \| Motion Upholstery Furniture
Revenue Recognition
Consolidated Net Sales	179,522	187,659
Operating Segments \| Upholstery Segment \| Stationary Upholstery Furniture
Revenue Recognition
Consolidated Net Sales	87,509	85,290
Operating Segments \| Upholstery Segment \| Occasional Furniture
Revenue Recognition
Consolidated Net Sales	312	393
Operating Segments \| Upholstery Segment \| Other (1)
Revenue Recognition
Consolidated Net Sales	26,073	20,056
Operating Segments \| Casegoods Segment
Revenue Recognition
Consolidated Net Sales	27,135	28,386
Operating Segments \| Casegoods Segment \| Stationary Upholstery Furniture
Revenue Recognition
Consolidated Net Sales	4,144	3,942
Operating Segments \| Casegoods Segment \| Bedroom Furniture
Revenue Recognition
Consolidated Net Sales	8,193	8,364
Operating Segments \| Casegoods Segment \| Dining Room Furniture
Revenue Recognition
Consolidated Net Sales	5,405	5,929
Operating Segments \| Casegoods Segment \| Occasional Furniture
Revenue Recognition
Consolidated Net Sales	10,823	11,988
Operating Segments \| Casegoods Segment \| Other (1)
Revenue Recognition
Consolidated Net Sales	(1,430)	(1,837)
Operating Segments \| Retail Segment
Revenue Recognition
Consolidated Net Sales	142,996	119,228
Operating Segments \| Retail Segment \| Motion Upholstery Furniture
Revenue Recognition
Consolidated Net Sales	85,184	74,957
Operating Segments \| Retail Segment \| Stationary Upholstery Furniture
Revenue Recognition
Consolidated Net Sales	29,153	23,164
Operating Segments \| Retail Segment \| Bedroom Furniture
Revenue Recognition
Consolidated Net Sales	1,447	855
Operating Segments \| Retail Segment \| Dining Room Furniture
Revenue Recognition
Consolidated Net Sales	2,599	1,583
Operating Segments \| Retail Segment \| Occasional Furniture
Revenue Recognition
Consolidated Net Sales	5,125	3,974
Operating Segments \| Retail Segment \| Other (1)
Revenue Recognition
Consolidated Net Sales	19,488	14,695
Corporate and Other
Revenue Recognition
Consolidated Net Sales		3,865
Corporate and Other \| Corporate and Other, non-segment
Revenue Recognition
Consolidated Net Sales	20,552
Corporate and Other \| Corporate and Other, non-segment \| Stationary Upholstery Furniture
Revenue Recognition
Consolidated Net Sales	22,952
Corporate and Other \| Corporate and Other, non-segment \| Bedroom Furniture
Revenue Recognition
Consolidated Net Sales	1,182
Corporate and Other \| Corporate and Other, non-segment \| Dining Room Furniture
Revenue Recognition
Consolidated Net Sales	394
Corporate and Other \| Corporate and Other, non-segment \| Occasional Furniture
Revenue Recognition
Consolidated Net Sales	361
Corporate and Other \| Corporate and Other, non-segment \| Other (1)
Revenue Recognition
Consolidated Net Sales	(4,337)
Eliminations
Revenue Recognition
Consolidated Net Sales	$ (70,466)	$ (60,182)

Revenue Recognition - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Jul. 27, 2019	Apr. 29, 2018
Revenue Recognition
Other receivables, included in other current assets	$ 18.9	$ 17.0
Customer deposits, included in accrued expenses and other current liabilities	48.8	42.8
Deferred revenues, included in accrued expenses and other current liabilities	18.9	$ 17.0
Revenue recognized related to contract liabilities	$ 52.4
Revenue, practical expedient elected for financing components of contracts with one year or less duration	true

Segment Information - Reportable and Operating Segments (Details)	3 Months Ended
	Jul. 27, 2019 store segment item
Upholstery Segment
Segment Information
Number of operating segments	2
Number of reportable segments	1
Casegoods Segment
Segment Information
Number of operating segments	1
Number of brands \| item	3
Retail Segment
Segment Information
Number of operating segments	1
Number of Stores \| store	155

Segment Information - Income Statement Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 27, 2019	Jul. 28, 2018
Segment Information
Sales	$ 413,633	$ 384,695
Operating Income (Loss)	23,422	23,160
Interest expense	(318)	(104)
Interest income	727	602
Other income (expense), net	(760)	892
Income before income taxes	23,071	24,550
Upholstery Segment
Segment Information
Sales	230,767	240,054
Casegoods Segment
Segment Information
Sales	22,006	24,403
Retail Segment
Segment Information
Sales	142,996	119,228
Corporate and Other, non-segment
Segment Information
Sales	17,864	1,010
Operating Segments \| Upholstery Segment
Segment Information
Sales	293,416	293,398
Operating Income (Loss)	26,267	23,884
Operating Segments \| Casegoods Segment
Segment Information
Sales	27,135	28,386
Operating Income (Loss)	2,597	3,080
Operating Segments \| Retail Segment
Segment Information
Operating Income (Loss)	8,477	4,458
Corporate and Other
Segment Information
Operating Income (Loss)	(13,919)	(8,262)
Corporate and Other \| Corporate and Other, non-segment
Segment Information
Sales	20,552	3,865
Eliminations
Segment Information
Sales	(70,466)	(60,182)
Eliminations \| Upholstery Segment
Segment Information
Sales	(62,649)	(53,344)
Eliminations \| Casegoods Segment
Segment Information
Sales	(5,129)	(3,983)
Eliminations \| Corporate and Other, non-segment
Segment Information
Sales	$ (2,688)	$ (2,855)

Income Taxes (Details)	3 Months Ended
Income Taxes (Details)	Jul. 27, 2019	Jul. 28, 2018
Income Taxes
Effective tax rate (as a percent)	22.00%	22.80%
Statutory tax rate (as a percent)	21.00%
Effective tax rate absent discrete adjustments (as a percent)	25.20%

Earnings per Share - Reconciliation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Jul. 27, 2019	Jul. 28, 2018
Numerator (basic and diluted):
Net income attributable to La-Z-Boy Incorporated	$ 18,069	$ 18,303
Income allocated to participating securities, basic	(39)	(76)
Net income available to common Shareholders, basic	$ 18,030	$ 18,227
Denominator:
Basic weighted average common shares outstanding (in shares)	46,820	46,716
Add:
Contingent common shares (in shares)	130	66
Stock option dilution (in shares)	175	379
Diluted weighted average common shares outstanding (in shares)	47,125	47,161
Basic	$ 0.39	$ 0.39
Diluted	$ 0.38	$ 0.39

Fair Value Measurements - Hierarchy and Transfers (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Jul. 27, 2019	Apr. 27, 2019
Assets
Total assets	$ 62,458	$ 57,421
Liabilities
Contingent consideration liability	7,900
Recurring basis
Liabilities
Transfers from Level 1 to Level 2 assets	0	0
Transfers from Level 2 to Level 1 assets	0	0
Transfers from Level 1 to Level 2 liabilities	0	0
Transfers from Level 2 to Level 1 liabilities	0	0
Transfers into Level 3 assets	0	0
Transfers out of Level 3 assets	0	0
Transfers into Level 3 liabilities	0	0
Transfers out of Level 3 liabilities	0	0
Recurring basis \| Level 1
Assets
Marketable securities	10	5
Held-to-maturity investments	3,454	3,341
Total assets	3,464	3,346
Recurring basis \| Level 2
Assets
Marketable securities	35,627	34,390
Total assets	35,627	34,390
Recurring basis \| Level 3
Assets
Cost basis investments	11,979	11,979
Total assets	11,979	11,979
Liabilities
Contingent consideration liability	$ 7,900	$ 7,900

Fair Value Measurements - Level 3 Investments (Details) - Level 3	3 Months Ended
	Jul. 27, 2019 company
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Preferred share investments, number of privately-held companies	2
Preferred share investments with common share warrant, number of privately-held companies	1
Joybird
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Discount rate for fiscal 2021 milestone contingent consideration	4.20%
Discount rate for fiscal 2023 milestone contingent consideration	4.70%

Earnings per Share - Antidilutive Securities (Details) - $ / shares shares in Millions	3 Months Ended
	Jul. 27, 2019	Jul. 28, 2018
Anti-dilutive options
Weighted average exercise price of options excluded from diluted share calculation (in dollars per share)		$ 400,000
Outstanding options
Anti-dilutive options
Outstanding options excluded from diluted share calculation (in shares)	0.4
Weighted average exercise price of options excluded from diluted share calculation (in dollars per share)	$ 33.15

Leases - ROU Assets by Segment (Details) $ in Thousands	Jul. 27, 2019 USD ($)
Leases
Total ROU assets	$ 312,433
Upholstery Segment
Leases
Total ROU assets	55,057
Casegoods Segment
Leases
Total ROU assets	2,205
Retail Segment
Leases
Total ROU assets	248,338
Corporate and Other, non-segment
Leases
Total ROU assets	$ 6,833

Investments - Other Investments (Details)	Jul. 27, 2019 company
Cost-basis investments
Investments
Preferred share investments, number of privately-held companies	2

Investments - Unrealized Gains and Losses and Fair Value (Details) - USD ($) $ in Thousands	Jul. 27, 2019	Apr. 27, 2019
Summary of investments
Gross Unrealized Gains	$ 2,545	$ 2,174
Gross Unrealized Losses	(63)	(124)
Fair Value	62,458	57,421
Equity securities
Summary of investments
Gross Unrealized Gains	2,066	1,841
Fair Value	23,268	19,535
Fixed income
Summary of investments
Gross Unrealized Gains	155	75
Gross Unrealized Losses	(47)	(111)
Fair Value	34,382	33,217
Other
Summary of investments
Gross Unrealized Gains	324	258
Gross Unrealized Losses	(16)	(13)
Fair Value	$ 4,808	$ 4,669

Stock-Based Compensation - Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 27, 2019	Jul. 28, 2018
Stock-based compensation expense recognized for outstanding grants
Equity-based awards expense	$ 1,675	$ 2,040
Liability-based awards expense	(60)	166
Total stock-based compensation expense	$ 1,615	$ 2,206

Fair Value Measurements - Net Asset Value (Details) - USD ($) $ in Millions	Jul. 27, 2019	Apr. 27, 2019
Fair Value Measured Using Net Asset Value
Assets
Marketable securities	$ 11.4	$ 7.7