Monday, Sep 24, 2018
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La-Z-Boy posts annual profit of $80.9M

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    The exterior and entrance of the La-Z-Boy headquarters in Monroe, Mich.

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    Kurt Darrow, chairman, president and CEO, La-Z-Boy, Inc.

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MONROE — Increased sales and profits in all its business segments gave La-Z-Boy Inc. a profit of $80.9 million, or $1.67 a share, for fiscal 2018, the company announced Tuesday.

However, profits were down nearly 6 percent despite revenues of $1.58 billion — up from $1.52 billion a year ago. The nation’s No. 2 furniture manufacturer and maker of the iconic La-Z-Boy recliner said tax reform charges caused earnings to dip from last year’s profits of $85.9 million, or $1.73 a share.

Two analysts surveyed by Zack’s Investment Research had expected an average of $1.86 per share for 2018.

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Kurt Darrow, chairman, president and CEO, La-Z-Boy, Inc.

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Kurt Darrow, La-Z-Boy’s chairman, president, and chief executive, said the increased revenues and an 8.2 percent operating margin were driven by solid performances in the company’s upholstery, wood furniture, and retail sales segments.

“We generated $116 million in cash from operating activities and returned a combined total of almost $79 million to shareholders through share purchases and an increased dividend. Strong cash generation also funded $36 million in capital expenditures, which included four large capital projects across the company, primarily designed to strengthen our operations and competitive positioning,” Mr. Darrow said.

Upholstery sales increased 3 percent to $1.23 billion, wood furniture sales were up 11 percent at $111 million, and retail sales rose 7 percent to $474 million.

For the fiscal fourth quarter, La-Z-Boy’s profits rose 22 percent to $34.2 million, or 72 cents a share, easily beating analysts’ estimate of 64 cents per share. The company said it got a 6 cents per share benefit in the fourth quarter related to tax reform. A year ago profits were $27.9 million, or 57 cents a share.

La-Z-Boy’s fourth quarter revenues totaled $420 million, up 2 percent from $412.7 million.

Mr. Darrow said that during the summer months, the furniture industry typically experiences weaker demand, allowing the majority of the company’s plants to shut down for one week of vacation and maintenance in July, which is part of the fiscal first quarter.

“Accordingly, the first quarter is usually the company’s weakest in terms of sales and earnings,” he said.

On the New York Stock Exchange, La-Z-Boy shares gained 10 cents on Tuesday, closing at $33.25 a share.

Contact Blade Business Writer Jon Chavez at jchavez@theblade.com or 419-724-6128.

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