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  • Larry Thomas

La-Z-Boy profits jump as quarterly sales grow 5.8%

MONROE, Mich. - La-ZBoy said profits more than doubled in the quarter ended July 27 on a 5.8% increase in sales.
The increases were driven largely by its company-owned stores, which reversed an operating loss from the same quarter last year, and its bellwether upholstery segment, which recorded a 7% sales increase.
     "The momentum in our business continued through what is typically a seasonally slower quarter, and we are pleased with the improved year-over-year sales and earnings results," said Kurt Darrow, chairman, president and CEO. "In addition to harnessing the power of our brand, our efforts to broaden our consumer base with product introductions of compelling, stylish, on-trend furniture are enabling us to gain market share."
    Net sales for the quarter - the first quarter of La-Z-Boy's fiscal year - totaled $318.9 million. That was up from $301.5 million in last year's first fiscal quarter.
     Net income totaled $9.59 million or 18 cents per share, compared with $4.4 million or 8 cents per share in the same quarter last year.
    Sales from the 93 company-owned La-Z-Boy Furniture Galleries stores rose 16% to $66.3 million, and the segment recorded an operating profit of $1.9 million.
     Comparable-store sales from all company-owned and independent La-Z-Boy stores rose 12.7%
     Wholesales sales in the upholstery segment were $254.9 million, up from $238.2 million in last year's first fiscal quarter. Case goods sales, meanwhile, fell 14.9% to $29.4 million.
     Darrow said he was particularly pleased the retail segment recorded an operating profit during what is typically the company's slowest quarter.
     "Increases in traffic and average ticket, as well as other key metrics, including a more favorable merchandising mix which enhanced gross margin performance, led to the improved results," he said of the retail business.
     Darrow also said the company will continue to beef up its Live Life Comfortably advertising campaign, which began 2½ years ago and continues to drive sales increases.
     "The campaign is delivering results, highlighting the broad range of great-looking furniture we offer in addition to our iconic recliner," he said. "Throughout the duration of the campaign, we consistently increased our advertising spend, equating to additional weeks on television, and will plan to make further strategic investments to support our growth initiatives."
     La-Z-Boy ended the quarter with 312 company-owned and licensed stores. During the quarter, one new store was opened, two were closed and one was relocated.
     The company said it is planning about 20 store openings, remodels and relocations during the fiscal year.

La-Z-Boy

Owns American Drew, Bauhaus, England, Hammary, Kincaid and Lea
Earnings per share are fully diluted.

Quarter ended 7/27

2013

2012

Change

Sales

$318,913,000

$301,501,000

5.8%

Operating income

14,822,000

7,626,000

94.4%

Net income

9,590,000

4,398,000

118.1%

Earnings per share

0.18

0.08

125.0%

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