La-Z-Boy Profit Rises, But Misses Estimate; Stock Down - Update

(RTTNews) - Home furniture maker La-Z-Boy Inc (LZB), Tuesday reported a higher first-quarter profit, helped by a 7 percent climb in sales and one-time gains. Nonetheless, earnings missed Wall Street estimates, while sales surpassed expectations.

Moving forward, the company expressed optimism regarding its growth prospects. La-Z-Boy shares slid 5 percent in after-hours trade on the Nasdaq.

"We are pleased with the overall sales increase we achieved this quarter against the backdrop of a challenging retail environment," said CEO Kurt Darrow.

The Monroe, Michigan-based company posted quarterly net earnings of $13 million or $0.25 per share, compared with $9.6 million or $0.18 per share last year.

Results for the quarter included gains of $0.05 per share from discontinued operations.

Excluding items, adjusted earnings for the quarter were $0.20 per share, compared with $0.18 per share a year ago.

On average, six analysts polled by Thomson Reuters expected earnings of $0.21 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the rose to $327 million from $305.5 million in the prior year, topping analysts' expectations of $321.3 million.

Sales at the upholstery segment increased 6.8 percent from a year ago, but operating margin was lower by 70 basis points.

The casegoods segment posted a 16.6 percent increase in sales and a 5.3 percent operating margin compared with 1.8 percent last year.

Same-store written sales for the La-Z-Boy Furniture Galleries store network increased 1 percent, modest than the 12.7 percent last year.

La-Z-Boy earlier announced restructuring measures to boost growth. This includes the plan to cease production at the Hudson, North Carolina plant in the fall and and become a pure importer of casegoods.

The company is also in the process of refreshing its product portfolio and is introducing more more transitional furniture groups.

The company announced a quarterly cash dividend of $0.06 per share as well as share buyback of up to an additional 5 million shares under its existing program.

La-Z-Boy stock closed Tuesday at $23.22, up $0.63 or 2.79%, on a volume of 699k shares. In after hours, the stock dropped $1.12 or 4.82% at $22.10.