Reportable Segment/Unit

Reporting Unit

Related Acquisition

Wholesale Segment

United Kingdom

Wholesale business in the United Kingdom and Ireland

Wholesale Segment

United Kingdom

La-Z-Boy United Kingdom Manufacturing (Furnico)

Retail Segment

Retail

La-Z-Boy Furniture Galleries® stores

Corporate and Other

Joybird

We test goodwill for impairment on an annual basis in the fourth quarter of each fiscal year, and more frequently if events or changes in circumstances indicate that it may be impaired. Under US GAAP, we have the option to first assess qualitative factors in order to determine if it is more likely than not that the fair value of one of our reporting units is greater than its carrying value ("Step 0"). If the qualitative assessment leads to a determination that the reporting unit’s fair value is less than its carrying value, or if we elect to bypass the qualitative assessment altogether, we are required to perform a quantitative impairment test ("Step 1") by calculating the fair value of the reporting unit and comparing the fair value with its associated carrying value.

During our fiscal 2025 annual impairment test, we first assessed goodwill recoverability qualitatively using the Step 0 approach for each of our reporting units. For our qualitative assessment, we considered the most recent quantitative analysis, which was performed during the fourth quarter of fiscal 2024 for the United Kingdom and Joybird reporting units and during the fourth quarter of fiscal 2020 for the Retail reporting unit, including assumptions used, such as discount rates and tax rates, indicated fair values, and the amounts by which those fair values exceeded their carrying amounts. Further, we compared actual performance in fiscal 2025, along with future financial projections to the internal financial projections used in the prior quantitative analyses. Additionally, we considered various other factors including macroeconomic conditions, relevant industry and market trends, and factors specific to the Company that could indicate a potential change in the fair value of our reporting units. Lastly, we evaluated whether any events have occurred or any circumstances have changed since that time that would indicate that our goodwill may have become impaired since our last quantitative tests.

Based on these qualitative assessments, we determined that it is more likely than not that the fair value of our Retail reporting unit exceeded its carrying value and as such, our goodwill for the Retail reporting unit was not considered impaired as of April 26, 2025 and the Step 1 quantitative goodwill impairment analysis was not necessary. However, for our United Kingdom and Joybird reporting units, we determined that the quantitative Step 1 goodwill impairment test was necessary as noted below.

Due to a decline in the United Kingdom's financial performance in fiscal 2025, primarily due to a significant customer transition and a challenging consumer environment, we deemed it necessary to perform the quantitative Step 1 goodwill impairment test for the United Kingdom reporting unit. To estimate the fair value of this reporting unit, we applied the income approach using discounted future cash flows in which sales and operating income projections were based on assumptions driven by the current economic conditions and assumed a 2.0% terminal growth rate. Our projections of revenue and operating income also include certain assumptions related to incremental business with new customers. Other key assumptions used in the quantitative assessment of the reporting unit's goodwill were a discount rate of 10.4%, reflecting a market participant weighted average cost of capital, and a tax rate of 25.0%, which was specific to the United Kingdom reporting unit. Based on our testing, the carrying value of the United Kingdom reporting unit exceeded its fair value as of April 26, 2025, by an amount greater than the recorded goodwill, and we recorded a non-cash pre-tax impairment charge of $20.6 million during the fourth quarter of fiscal 2025 to reduce the carrying value of the goodwill to zero.

Due to limited headroom from the fiscal 2024 impairment testing, we deemed it necessary to perform the quantitative Step 1 goodwill impairment test for the Joybird reporting unit. To estimate the fair value of this reporting unit, we applied a combination of the income approach and the market approach, weighted 75% and 25%, respectively. The income approach used discounted future cash flows in which sales and operating income projections were based on assumptions driven by current economic conditions and assumed a 2.0% terminal growth rate. Other key assumptions used in the discounted future cash flow model were a discount rate of 17.5%, reflecting a market participant weighted average cost of capital assuming Joybird would be sold as a stand-alone business, and a tax rate of 24.2%, which was specific to the Joybird reporting unit.

The market approach used the guideline public company method, which derives a valuation from market multiples based on revenue for comparable public companies and was adjusted for a control premium based on recent merger and acquisition transaction data of target companies similar to the Joybird reporting unit. Based on our testing, the fair value of the Joybird reporting unit exceeded its carrying value as of April 26, 2025 by approximately 16% and no impairment was recorded.

Further, a sensitivity analysis was performed on key assumptions used in the valuation, primarily the discount rate and terminal growth rate, and using a range of reasonable inputs, the fair value of the Joybird reporting unit exceeded its carrying value for each of the various scenarios analyzed. However, changes to other valuation inputs or failure to meet our forecasts, in particular our sales and operating income projections, could reduce the fair value of the Joybird reporting unit and thus increase the possibility that our goodwill may be impaired in the future.


(Amounts in thousands)	Wholesale Segment		Retail Segment		Corporate and Other		Total Goodwill
Balance at April 29, 2023 (1)	$	20,202	$	129,360	$	55,446	$	205,008
Acquisitions	—		9,593		—		9,593

Translation adjustment	(117)		(31)		—		(148)
Balance at April 27, 2024 (1)	20,085		138,922		55,446		214,453
Acquisitions	—		11,269		—		11,269
Impairment	(20,581)		—		—		(20,581)
Translation adjustment	496		(47)		—		449
Balance at April 26, 2025 (1)	$	—	$	150,144	$	55,446	$	205,590

Reportable Segment

Intangible Asset

Useful Life

Wholesale Segment

Customer relationships from our acquisition of the wholesale business in the United Kingdom and Ireland

Amortizable over 15 year useful life

Wholesale Segment

American Drew® trade name

Indefinite-lived

Retail Segment

Reacquired rights to own and operate La-Z-Boy Furniture Galleries® stores

Indefinite-lived

Corporate and Other

Joybird® trade name

Amortizable over eight-year useful life

We test indefinite-lived intangible assets for impairment on an annual basis in the fourth quarter of our fiscal year, or more frequently if events or changes in circumstances indicate that the assets might be impaired. Similar to our goodwill testing, we used the qualitative Step 0 approach to assess if it was more likely than not that the fair values of our indefinite-lived intangible assets were greater than their carrying values. Based on the same qualitative factors outlined above, we determined that it is more likely than not that the fair value of each of our indefinite-lived intangible assets exceeded their respective carrying value and as such, our indefinite-lived intangible assets were not considered impaired as of April 26, 2025, and the Step 1 quantitative impairment analysis was not necessary.

During the fourth quarter of fiscal 2025, as a result of the challenges in our United Kingdom businesses as noted above, we determined there were events that indicated the carrying value of our United Kingdom asset group might be impaired. Using cash flows consistent with those used in the goodwill impairment testing, we determined the projected undiscounted cash flows were less than the carrying value of the asset group. To estimate the fair value of the United Kingdom asset group, we applied the income approach using discounted future cash flows consistent with those used in our goodwill impairment testing. As a result, we recorded an impairment charge of $1.5 million related to our customer relationship intangible asset. The impairment charge was recorded in SG&A expense within the Wholesale segment.


(Amounts in thousands)	Indefinite-Lived Trade Names		Finite-Lived Trade Name		Indefinite-Lived Reacquired Rights		Other Intangible Assets		Total Intangible Assets
Balance at April 29, 2023	$	1,155	$	2,594	$	33,739	$	1,887	$	39,375
Acquisitions	—		—		8,924		—		8,924
Amortization	—		(798)		—		(218)		(1,016)
Translation adjustment	—		—		(23)		(9)		(32)
Balance at April 27, 2024	$	1,155	$	1,796	$	42,640	$	1,660	$	47,251
Acquisitions	—		—		6,404		—		6,404
Amortization	—		(798)		—		(222)		(1,020)
Impairment	—		—		—		(1,479)		(1,479)
Translation adjustment	—		—		(36)		41		5
Balance at April 26, 2025	$	1,155	$	998	$	49,008	$	—	$	51,161