La-Z-Boy logs $2M profit
By Larry Thomas -- Furniture Today, August 24, 2009
Monroe, Mich. — La-Z-Boy said its sales fell 18.3% in the quarter ended July 25, but the upholstery and case goods major earned a profit of $2 million.
The profit, which equals 4 cents per share, reversed a loss in the same quarter last year, when the company recorded a net loss of $8.5 million or 17 cents per share.
"Our results for the period demonstrate the effectiveness of the many structural changes we have made to our business, combined with the major strategic initiatives implemented over the past several years," said Kurt Darrow, president and CEO. "These moves are continuing to bear fruit."
Sales for the period — the first quarter of La-Z-Boy's fiscal year — totaled $262.7 million, down from $321.7 million in the same quarter a year earlier.
Sales in the upholstery segment were down 17% to $196.7 million, but the segment's operating margin increased to 8.3% from 4.2% a year ago. Darrow said the margin increase demonstrated "the magnitude of changes made to our business model, both in terms of its cost structure and operating platform."
"We were able to achieve these results during what is historically our slowest quarter due to seasonality factors, including a one-week plant shutdown for maintenance and vacation," he added.
In the case goods segment, sales tumbled 25.5% to $35.9 million. The business had a break-even operating margin, compared with a margin of 2.9% in the same quarter last year.
Sales at company-owned retail stores fell 15.2% to $36 million. The segment had an operating loss of $5.7 million, but it was the third straight quarter that the loss had been reduced.
"We have a strong marketing presence, which is helping drive traffic into our stores," said Darrow. "Additionally, we have placed significant emphasis on the improvement and effectiveness of our sales team, and converting more customers into buyers while increasing the average ticket."
Same-store sales for company-owned and licensed La-Z-Boy stores fell 2.3% in the quarter.
With the first-quarter earnings, the company has posted back-to-back quarterly profits. In the last quarter of fiscal 2009, it reported net income of $5.3 million despite a 22.7% drop in sales from a year earlier.
La-Z-Boy
Owns American Drew, Bauhaus, England, Hammary, Kincaid and Lea
Earnings per share are fully diluted, and all figures in parentheses are losses or declines.
| Quarter ended 7/25 | 2009 | 2008 | Change |
| (a) Includes writedown of intangibles of $1.3 million in the 2008 quarter, and restructuring charges of $301,000 in the 2009 quarter and $781,000 in the 2008 quarter. Excludes net income attributable to noncontrolling interests of $214,000 in the 2009 quarter and $86,000 in the 2008 quarter. |
|||
| Sales | $262,671,000 | $321,652,000 | (18.3%) |
| Operating income | 3,666,000 | (5,214,000) | — |
| Net income (a) | 1,983,000 | (8,544,000) | — |
| Earnings per share | 0.04 | (0.17) | — |
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