La-Z-Boy profits jump nearly 50% as sales rise 8.4%

Larry Thomas -- Furniture Today, February 22, 2012

MONROE, Mich. — Paced by its upholstery and retail segments, La-Z-Boy said its sales for the fiscal third quarter rose 8.4%.

Profits, meanwhile, were nearly 50% above last year's third fiscal quarter, aided by a reduction of valuation reserves against the company's deferred tax assets and money received from antidumping duties.

Companywide sales for the quarter ended Jan. 28 totaled $316.5 million, up from $291.9 million in the previous year's third quarter.

La-Z-Boy said its upholstery segment recorded a 10.7% increase in sales and a 22.4% jump in operating income, while same-store written sales rose 8.6% at the 309 La-Z-Boy Furniture Galleries stores.

Net income totaled $14.96 million or 28 cents per share - a figure that included 7 cents per share for the reduction of valuation reserves and 2 cents per share from antidumping duties.

In last year's third fiscal quarter, net income was $10.01 million or 19 cents per share. That included a tax benefit of 6 cents per share and antidumping duties of 1 cent per share.

"Our results for the quarter demonstrate we are successfully executing against our strategy to drive volume, retail profitability and conversion," said Kurt Darrow, chairman, president and CEO. "During the period, we experienced sales increases in our upholstery and retail segments, achieved the twelfth consecutive quarter of performance improvement in our retail segment, posted an 8.6% same-store sales increase for the La-Z-Boy Furniture Galleries store system, and generated a 70% improvement in operating income."

He said the 84 company-owned stores slashed their operating loss to $646,000 from $2.76 million in last year's third quarter, and said the 67 stores included in last year's third quarter recorded a sales increase of 6.7%.

"Our retail performance indicates we are on a solid path toward profitability as we continue to improve the results of the segment each quarter," Darrow said. "During the quarter, we improved our average ticket through an increase in items per ticket as well as dollars per item. Importantly, our team continues to ensure consumers have a professional shopping experience and receive personalized service."

For the first nine months of the fiscal year, companywide sales totaled $904.3 million, up 6.6% from $848.2 million in the first nine months of the previous fiscal year. Nine-month profits totaled $68.3 million or $1.28 per share, including a $34.8 million income tax benefit and $1.74 million in antidumping duties.

For the comparable nine-month period a year earlier, profits totaled $13.7 million or 26 cents per share, including $903,000 in antidumping duties.