Revenue Recognition

3 Months Ended

Jul. 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.

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.

The following table presents our revenue disaggregated by product category and by segment or unit:



	Quarter Ended July 25, 2020
(Unaudited, amounts in thousands)	Wholesale		Retail		Corporate and Other			Total
Motion Upholstery Furniture	$	132,264	$	53,447	$	—		$	185,711
Stationary Upholstery Furniture	58,314		17,655		16,134			92,103
Bedroom Furniture	7,112		1,095		1,231			9,438
Dining Room Furniture	4,547		1,818		657			7,022
Occasional Furniture	8,110		3,410		729			12,249
Other (1)	13,226		13,712		(2,010		)	24,928
Total	$	223,573	$	91,137	$	16,741		$	331,451

Eliminations								(45,993		)
Consolidated Net Sales								$	285,458

	Quarter Ended July 27, 2019
(Unaudited, amounts in thousands)	Wholesale		Retail		Corporate and Other			Total
Motion Upholstery Furniture	$	179,522	$	85,184	$	—		$	264,706
Stationary Upholstery Furniture	91,653		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	11,135		5,125		361			16,621
Other (1)	24,643		19,488		(4,337		)	39,794
Total	$	320,551	$	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 and 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 July 25, 2020, our consolidated balance sheet includes current assets of $39.7 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 2021, we had $17.1 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 July 25, 2020, we included $101.8 million of customer deposits and $39.7 million of deferred revenues in accrued expenses and other current liabilities on our consolidated balance sheet. At the beginning of fiscal 2021, we had $40.7 million of customer deposits and $17.1 million of deferred revenues. During the quarter ended July 25, 2020, we recognized revenue of $49.7 million related to our contract liability balance at April 25, 2020.

The increase in our contract assets and contract liabilities at July 25, 2020 was primarily the result of increased written sales during the first quarter of fiscal 2021 compared with those in the fourth quarter of fiscal 2020.