La-Z-Boy reports net income of $5.91 million for quarter

But sales decline more than 9% versus last year

Furniture Today Staff -- Furniture Today, November 18, 2009

MONROE, Mich. — Despite a sales decline of more than 9%, La-Z-Boy reported net income of $5.91 million for the quarter ended Oct. 24 - the company's third consecutive quarterly profit.

The profitable quarter reversed a net loss in the same quarter last year, and the company said its financial picture should continue to improve as the benefits from a variety of cost-cutting measures and operational upgrades become more evident.

"Today, La-Z-Boy is operating from a more competitive platform and, over the next 12 to 18 months, our operations will be further strengthened by previously announced projects underway," said Kurt Darrow, president and CEO.

Sales for the most recent quarter, the second quarter of La-Z-Boy's fiscal year, totaled $300.7 million, down from $331.9 million in last year's second fiscal quarter.

The quarterly profit, which equals 11 cents per share, compares with a net loss of $53.74 million, or $1.05 per share, in the same period last year. Last year's second quarter included a non-cash charge of 74 cents per share for a valuation allowance against the company's deferred tax assets.

In La-Z-Boy's upholstery segment, sales fell 6.1% to $232.8 million, but the operating margin increased to 10.9% from 3.4% in last year's second fiscal quarter.

Case goods sales fell 23% to $37.3 million, and the segment operated on a break-even basis.

Sales at company-owned La-Z-Boy Furniture Galleries stores fell 3.7% to $38 million, and the segment cut its operating loss nearly in half.

"While we are pleased with the progress made over the course of the past year, our team is focused on driving traffic into the stores, building stronger relationships with the customer through various follow-up programs, improving its close ratio and increasing the average ticket," Darrow said.

Same-store written sales for all company-owned and independently licensed stores fell 0.6% in the quarter.

For the first six months of its fiscal year, companywide sales fell 13.8% to $563.4 million.

Six-month net income was $7.89 million, or 15 cents per share. That compares with a net loss of $62.3 million, or $1.21 per share, in the same period in 2008.