La-Z-Boy is consolidating its distribution network from 15 regional centers to three centralized hubs. The redesign will cut warehouse space by 30% and heavy-furniture delivery mileage 20% once complete, CFO Taylor Luebke said on the company’s Q4 FY2026 earnings call.
The progress: The network is down to nine DCs so far. It has closed six since the project began, according to the company's 10-K. Another six consolidations are planned before it hits the three-hub target.
The trade: Fewer but bigger buildings, each covering more ground. One centralized hub can serve territory that once required several regional DCs.
The remaining nodes aren’t disappearing entirely. The network will keep small-format cross-docks near customers to handle final-mile handoffs, while inventory storage and staging move to the three hubs.
Time and cost: Luebke called this a four-year transformation, now in its second year, with Midwest and Eastern hub phases expected to be largely complete this fiscal year.
The company is taking on real costs along the way. Higher distribution spending tied to the project cut 70 basis points from wholesale gross margin in fiscal 2026, according to the 10-K. Luebke has said the full 50 to 75 basis points of benefit will not show up until the project's fourth year.
The enabler: CEO Melinda Whittington said the company’s US-heavy manufacturing footprint makes this possible. About 90% of its upholstered products are made domestically. That lets La-Z-Boy centralize distribution without stretching delivery times past four to six weeks.
