La-Z-Boy’s profits surge, but stock falls
8/20/2014MONROE — La-Z-Boy Inc. said Tuesday that its fiscal first-quarter net profits rose 36 percent from last year, with sales rising 7 percent on gains mainly from its wholesale division.
For the quarter, the Monroe-based furniture company and maker of the iconic recliner had profits of $13.1 million, or 25 cents a share, up from $9.6 million, or 18 cents per share, for the same fiscal period a year ago.
The company’s revenues totaled $327 million, up from $305.5 million a year ago.
In the wholesale division, operating revenue from La-Z-Boy’s upholstery segment rose 6.8 percent to $262.9 million, up from $246.1 million a year ago. Revenue from wood furniture, was up 16.5 percent to $28.9 million from $24.8 million a year ago.
Delivered sales were up 10 percent to $72.9 million, but same-store sales were flat. Overall, the retail division had an operating profit of $315,000 and an operating margin of 0.4 percent for the quarter. Last year operating profits were $1.9 million and the margin was 2.9 percent.
Kurt Darrow, La-Z-Boy’s chairman, president, and chief executive, said he was pleased by the overall sales increase, which came in what he called a challenging retail environment. “At the same time, our balance sheet remains strong, allowing for flexibility and the ability to continue to make investments that will deliver future growth and market share gains,” he said.
For the day, La-Z-Boy’s shares were up 63 cents, closing at $23.22 on the New York Stock Exchange. But the company announced its earnings after the markets closed, and in after hours trading shares had dropped 87 cents two hours after the 4 p.m. close.
Analysts attributed the drop to La-Z-Boy missing estimates of earnings from continuing operations of 21 cents a share. The company’s earnings were 20 cents per share.
Also Tuesday, La-Z-Boy declared a quarterly dividend of 6 cents per share, payable Sept. 10 to shareholders of record as of Aug. 29. It also approved the purchase of up to an additional 5 million shares, or 15 percent of outstanding shares, under its share purchase authorization program.
Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.