Revenue Recognition

9 Months Ended

Jan. 25, 2020

Revenue from Contract with Customer [Abstract]

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 the 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 presents our revenue disaggregated by product category and by segment or unit:



	Quarter Ended January 25, 2020
(Unaudited, amounts in thousands)	Upholstery		Casegoods			Retail		Corporate and Other			Total
Motion Upholstery Furniture	$	212,079	$	—		$	100,662	$	—		$	312,741
Stationary Upholstery Furniture	96,429		4,131			33,348		29,094			163,002
Bedroom Furniture	—		7,772			1,517		1,842			11,131
Dining Room Furniture	—		5,981			3,040		596			9,617
Occasional Furniture	383		11,619			6,148		516			18,666
Other (1)	27,805		(1,388		)	22,779		(6,379		)	42,817
Total	$	336,696	$	28,115		$	167,494	$	25,669		$	557,974

			Eliminations								(82,118		)
			Consolidated Net Sales								$	475,856

	Quarter Ended January 26, 2019
	Upholstery		Casegoods			Retail		Corporate and Other			Total
Motion Upholstery Furniture	$	212,631	$	—		$	100,232	$	—		$	312,863
Stationary Upholstery Furniture	94,551		3,844			27,652		24,096			150,143
Bedroom Furniture	—		7,447			1,586		1,296			10,329
Dining Room Furniture	—		5,733			3,097		610			9,440
Occasional Furniture	391		12,292			5,959		338			18,980
Other (1)	26,875		(1,251		)	20,891		(3,491		)	43,024
Total	$	334,448	$	28,065		$	159,417	$	22,849		$	544,779

			Eliminations								(77,197		)
			Consolidated Net Sales								$	467,582


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



	Nine Months Ended January 25, 2020
(Unaudited, amounts in thousands)	Upholstery		Casegoods			Retail		Corporate and Other			Total
Motion Upholstery Furniture	$	588,820	$	—		$	270,301	$	—		$	859,121
Stationary Upholstery Furniture	281,699		12,873			96,306		79,477			470,355
Bedroom Furniture	—		24,711			4,513		4,800			34,024
Dining Room Furniture	—		17,656			8,036		1,436			27,128
Occasional Furniture	1,083		33,988			16,728		1,374			53,173
Other (1)	79,365		(4,588		)	63,010		(16,555		)	121,232
Total	$	950,967	$	84,640		$	458,894	$	70,532		$	1,565,033

			Eliminations								(228,332		)
			Consolidated Net Sales								$	1,336,701

	Nine Months Ended January 26, 2019
	Upholstery		Casegoods			Retail		Corporate and Other			Total
Motion Upholstery Furniture	$	602,458	$	—		$	260,924	$	—		$	863,382
Stationary Upholstery Furniture	272,087		12,215			76,517		47,791			408,610
Bedroom Furniture	—		24,045			3,891		3,756			31,692
Dining Room Furniture	—		18,068			7,293		1,429			26,790
Occasional Furniture	1,202		38,003			15,000		828			55,033
Other (1)	69,192		(4,503		)	54,706		(4,712		)	114,683
Total	$	944,939	$	87,828		$	418,331	$	49,092		$	1,500,190

			Eliminations								(208,580		)
			Consolidated Net Sales								$	1,291,610


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

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.

At January 25, 2020, our consolidated balance sheet includes current assets of $25.3 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 customer deposits from end consumers before we recognize revenue 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 January 25, 2020, we included $60.9 million of customer deposits and $25.3 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 and nine months ended January 25, 2020 we recognized revenue of $0.5 million and $55.0 million, respectively, related to our contract liability balance at April 27, 2019.

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.