Note 17: Segment Information

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

Upholstery Segment. Our Upholstery reportable 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, 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 comprising our 156 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 and sells upholstered furniture such as sofas, loveseats, chairs, ottomans, sleeper sofas and beds, and also imports and sells casegoods (wood) furniture such as occasional tables and other accessories. Joybird sells to the end consumer almost exclusively online through its website, www.joybird.com. None of the operating segments included in Corporate & Other meet the requirements of reportable segments.

The accounting policies of the operating segments are the same as those described in Note 1. We account for intersegment revenue transactions between our segments consistent with independent third-party transactions, that is, at current market prices. As a result, the manufacturing profit related to sales to our Retail segment is included within the appropriate Upholstery or Casegoods segment. Operating income realized on intersegment revenue transactions is therefore generally consistent with the operating income realized on our revenue from independent third-party transactions. Segment operating income is based on profit or loss from operations before interest expense, interest income, other income (expense) and income taxes. Identifiable assets are cash and equivalents, notes and accounts receivable, net inventories, net property, plant and equipment, goodwill and other intangible assets. Our unallocated assets include deferred income taxes, corporate assets (including a portion of cash and equivalents), and various other assets. Sales are attributed to countries on the basis of the customer’s location.


	Fiscal Year Ended
	(52 weeks)		(52 weeks)		(52 weeks)
(Amounts in thousands)	4/27/2019		4/28/2018		4/29/2017
Sales
Upholstery segment:
Sales to external customers	$	1,016,957	$	1,010,097	$	986,917
Intersegment sales		251,285		217,266		204,526
Upholstery segment sales		1,268,242		1,227,363		1,191,443

Casegoods segment:
Sales to external customers		95,677		95,919		87,181
Intersegment sales		18,796		15,474		13,047
Casegoods segment sales		114,473		111,393		100,228

Retail segment sales		570,201		474,613		443,238

Corporate and Other:
Sales to external customers		62,566		3,318		2,724
Intersegment sales		11,446		9,421		6,437
Corporate and Other sales		74,012		12,739		9,161

Eliminations		(281,527)		(242,161)		(224,010)
Consolidated sales	$	1,745,401	$	1,583,947	$	1,520,060

Operating Income (Loss)
Upholstery segment	$	127,906	$	130,349	$	148,996
Casegoods segment		12,589		11,641		8,623
Retail segment		37,922		20,709		19,205
Corporate and Other		(48,743)		(33,330)		(43,482)
Consolidated operating income		129,674		129,369		133,342
Interest expense		(1,542)		(538)		(1,073)
Interest income		2,103		1,709		981
Pension termination charge		(32,671)		—		—
Other expense, net		(2,237)		(1,650)		(2,510)
Income before income taxes	$	95,327	$	128,890	$	130,740

Depreciation and Amortization
Upholstery segment	$	16,122	$	15,823	$	14,692
Casegoods segment		1,143		993		863
Retail segment		4,007		3,758		3,131
Corporate and Other		9,875		11,193		10,445
Consolidated depreciation and amortization	$	31,147	$	31,767	$	29,131


Capital Expenditures
Upholstery segment	$	37,114		$	30,049		$	13,193
Casegoods segment		1,949			711			786
Retail segment		4,604			3,377			2,831
Corporate and Other		4,766			2,200			3,494
Consolidated capital expenditures	$	48,433		$	36,337		$	20,304

Assets
Upholstery segment	$	398,469		$	363,864		$	357,889
Casegoods segment		55,295			57,312			53,064
Retail segment		210,863			177,853			172,601
Unallocated assets		395,163			293,938			305,301
Consolidated assets	$	1,059,790		$	892,967		$	888,855

Long-Lived Assets by Geographic Location
Domestic	$	389,892		$	251,778		$	239,198
International		27,529			23,671			23,791
Consolidated long-lived assets	$	417,421		$	275,449		$	262,989

Sales by Country
United States		89	%		87	%		88	%
Canada		6	%		7	%		7	%
Other		5	%		6	%		5	%
Total		100	%		100	%		100	%