La-Z-Boy profits more than double in quarter
November 28, 2013,
Monroe, Mich. - Driven by double-digit increases in sales an d operating income from its bellwether upholstery segment, La-Z-Boy said profits more than doubled in the quarter ended Oct. 26.
The company recorded net income of $16.7 million or 31 cents per share in the quarter, which was well ahead of the $6.62 million or 12 cents per share on the bottom line in the same quarter in 2012.
Companywide sales were $366.4 million, a 13.7% increase from $322.2 million in the comparable quarter.
"Our performance for the quarter reflects the successful execution of our sales, merchandising and integrated retail strategies as well as the efficiencies with which we are running our operations," said Kurt Darrow, chairman, president and CEO. "We believe our positive sales trajectory is indicative of continued market share gains, and with the strength of the La-Z-Boy brand, our vast distribution network and our lean manufacturing structure, we are well positioned for future profitable growth."
Sales in the upholstery segment were up 14.2% to $296.2 million, and the segment's operating profit was up nearly 50% to $32.5 million.
Delivered sales at companyowned stores rose 19.9% to $73.4 million, and the segment recorded an operating profit of $3.25 million. In the same quarter last year, the stores had an operating loss of $575,000.
Case goods sales, meanwhile, fell 1.7% to $33.9 million.
Darrow said the upholstery business continued to be driven by a variety of marketing initiatives surrounding the company's Live Life Comfortably campaign featuring actress Brooke Shields. In addition, he's also very bullish about the Urban Attitudes collection that was unveiled at last month's High Point Market.
"The collection was well received across our entire dealer base, and we look forward to it making its way onto retail floors over the course of the next several months," Darrow said.
He said the operating profit increase in the retail segment was driven primarily by the ability to leverage fixed costs with higher sales volume.
"Although traffic for the period was flat, we experienced an increase in average ticket, as well as other key metrics," said Darrow.
The retail segment includes 97 of the 314 La-Z-Boy Furniture Galleries stores. During the quarter the company completed the acquisition of three stores in the Las Vegas market and announced the purchase of two stores in the Youngstown, Ohio, market. In addition, a companyowned store in the Buffalo, N.Y., market, opened last week, replacing a closed store that had been operated by an independent licensee.
Companywide sales for the six months ended Oct. 26 rose 9.9% to $685.3 million.
Six-month profits totaled $26.3 million or 49 cents per share. That was up from $11 million or 20 cents per share in the first half of the previous fiscal year.
La-Z-Boy directors also hiked the cash dividend to 6 cents per share, a 2-cent increase. The new dividend will be paid Dec. 10 to shareholders of record on Nov. 29.
Earnings per share are fully diluted.
Quarter ended 10/26
Earnings per share
9 months ended 10/26
Earnings per share
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