La-Z-Boy sales drop 5.7%
By Furniture Today Staff -- Furniture Today, November 18, 2001
MONROE, Mich. — La-Z-Boy, the nation's biggest residential furniture producer, said sales dropped 5.7% in its second quarter amid continuing weak demand for home furnishings.
The company's case goods group, which accounts for about 30% of total sales, was especially hard hit as sales dropped some 17%. The upholstery group eked out a 0.3% gain.
Net income for the quarter ended Oct. 27 tumbled 57.1% to $12.4 million, largely due to a restructuring charge announced last month. As part of the restructuring, which should be completed by February, five case goods plants and one upholstery plant will be closed. Two other case goods plants are being converted to warehouse and servicing facilities.
"Considering the severe pressure under which our industry has operated recently, we feel good about our performance," said Jerry Kiser, president and chief executive officer.
Kiser said he was especially encouraged by the upholstery group, which accounted for about 70% of the company's quarterly sales of $559.2 million. In a conference call with securities analysts, he said upholstery sales "may have hit bottom," but stressed the company still believes overall demand for furniture will remain soft until the second half of 2002.
He said upholstery sales have been aided in recent months by the performance of dealer-owned La-Z-Boy gallery stores, which recorded a 9% same-store sales gain in October.
David Risley, chief financial officer, told analysts that upholstery sales for the fiscal year should be "significantly above" the 11.3% decline in industrywide shipments recently projected by the American Furniture Manufacturers Assn.
He said the company's case goods shipments should be about the same as the 14.2% industrywide decline projected by AFMA.
| La-Z-Boy | |||
|---|---|---|---|
| Owns Alexvale, Bauhaus, England, Hammary, Kincaid and Ladd | |||
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 10/27 | 2001 | 2000 | Change |
| Sales | $559,189,000 | $592,700,000 | (5.7%) |
| Operating income | 21,606,000 | 44,836,000 | (51.8%) |
| Net income | (a)12,391,000 | (b)28,916,000 | (57.1%) |
| Earnings per share | 0.20 | 0.48 | (58.3%) |
| 6 months ended 10/27 | 2001 | 2000 | Change |
| Sales | $1,018,170,000 | $1,109,407,000 | (8.2%) |
| Operating income | 28,583,000 | 69,416,000 | (58.8%) |
| Net income | (a)15,222,000 | (b)41,919,000 | (63.7%) |
| Earnings per share | 0.25 | 0.69 | (63.8%) |
| (a) Includes a $7.9 million net restructuring charge in both periods. (b) Includes a $3 million net non-recurring gain in both periods. | |||
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