La-Z-Boy Q1 Profit Rises - Update

(RTTNews) - Home furniture maker La-Z-Boy Inc. (LZB), Tuesday reported a surge in profit for the first quarter, driven mainly by growth in revenues and stronger margins. Earnings for the quarter came in ahead of analysts' estimates, but revenues fell short of expectations.

Monroe, Michigan-based La-Z-Boy's first-quarter profit rose to $9.59 million or $0.18 per share from $4.40 million or $0.08 per share last year. On average, five analysts polled by Thomson Reuters expected earnings of $0.15 per share for the quarter. Analysts' estimates typically exclude special items.

La-Z-Boy, which makes namesake living-room recliners, said sales for the first quarter grew 5.8 percent to $318.91 million from $301.50 million last year. Four analysts had a consensus estimate of $323.02 million for the period.

"The momentum in our business continued through what is typically a seasonally slower quarter and we are pleased with the improved year-over-year sales and earnings results. In addition to harnessing the power of our brand, our efforts to broaden our consumer base with product introductions of compelling, stylish, on-trend furniture are enabling us to gain market share," Chief Executive Kurt Darrow said.

Same-store written sales for the La-Z-Boy Furniture Galleries store network increased 12.7 percent for the first quarter compared to a 9.2 percent increase in last year's first quarter.

At wholesale segment, upholstery, which accounts for most of the business, sales increased 7 percent to $254.9 million, while casegoods sales slipped 14.9 percent to $29.4 million. The upholstery segment's operating margin improved to 8.7 percent from 6.5 percent in last year's first quarter.

At retail segment, delivered sales improved 16 percent to $66.3 million from the prior year.

Going forward, Darrow stated, "We are optimistic about the business of La-Z-Boy Incorporated as we move into the stronger fall selling season and are confident we have the right strategy in place to drive profitable growth for the long term."

Darrow also noted that the company is aggressively pursuing the store expansion program through its "4-4-5" strategy, i.e. 400 stores across the La-Z-Boy Furniture Galleries network, averaging $4 million in sales per store, in five years.

LZB closed Tuesday's trading at $21.24, up $0.81 or 3.96%, on the NYSE. The stock further gained $0.36 or 1.69% in after hours trade.