MONROE - As it warned last month that its sales and profit would slip, La-Z-Boy Inc. yesterday posted a loss of $6.4 million on sales that plunged 13 percent for the quarter ending Oct. 29.
The Michigan firm attributed 40 percent of the sales decline to a shortage of a critical foam component needed in its upholstered furniture, but said a restructuring charge and softer-than-expected sales in its stores contributed to the poor earnings.
The nation's No. 2 furniture company said sales for the quarter were $454.6 million, down $66.2 million from a year ago. The loss of 12 cents a share compared with a profit of 17 cents a share, or $8.9 million, for its second fiscal quarter a year ago. The announcement was made after the stock markets had closed for the day.
The company said it was confident it has made needed changes to streamline its manufacturing, including closing its only Canadian factory, but noted that it is concerned about the nation's economy and consumer confidence, and expects sales for the current quarter to be flat compared with a year earlier.
Hurricanes Katrina and Rita cut power and damaged its factory production as well as disrupted its supply of foam used in upholstery, further hindering production, La-Z-Boy said. The company took a restructuring charge when it closed the Canadian plant, and it is in the process of buying its retail stores and converting them to new formats that have boosted sales.
La-Z-Boy reported a first quarter profit this year of $3.2 million, and had a profit last fiscal year of $37.2 million, but it has struggled financially in the two years. For the fiscal year ending in April, 2004, it reported its first annual loss in three decades, of $5.8 million.
The company yesterday also declared a quarterly dividend of 11 cents a share, payable Dec. 9 to holders of record Nov. 30.