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La-Z-Boy Braces Investors for Flat First Quarter
August 5,
2010 by in UnCategorized 
By Home Furnishings Business in Financial Reports on August 6, 2010
In advance of a meeting with analysts and investors next week, Kurt Darrow, president and chief executive officer of La-Z-Boy Inc. (NYSE: LZB) said the company's first quarter results due out Aug. 17 will show "relatively flat to slightly increased sales" and earnings per share in "a break-even range."
In a release, Darrow said the company's first quarter results were negatively impacted by several factors, including increased raw material costs and supply chain disruptions and delays. Hurricane Alex, he said, also affected shipping from La-Z-Boy's Mexican-based cut-and-sew operations. Those operations are also in transition as the company shifts its custom cut-and-sew product from its U.S. facilities.
"In addition to seasonality playing a role in terms of overall volume levels during the quarter, the storm in Mexico washed out roads, delaying the transport of cut-and-sewn kits to our U.S.-based facilities," Darrow said. "As a result of the supply chain disruptions and delays, our U.S. plants did not run as planned during July and we were required to move approximately $10 million of orders from production in July into August.
Darrow said the company's previous five quarters showed solid, consistent performance in its upholstery business. La-Z-Boy has introduced a number of lean initiatives and cellular production throughout its operations, he said.
"We believe many of the issues that reduced our first-quarter production levels are behind us," Darrow said. "Raw material pricing has been on the decline from its peak in the May-through-June period, supply chain disruptions are being minimized and our Mexico facility is improving its efficiencies. Importantly, the issues faced during the quarter are not systemic to our business and historically our first quarter is not indicative of our performance for the remainder of the year. As an example, in last years first quarter, we earned $0.04 per share and earned $0.62 for the full year.
La-Z-Boy Incorporated will announce its fiscal 2011 first-quarter results Tuesday, Aug. 17, with a conference call scheduled Wednesday, Aug. 18, at 8:30 a.m. eastern time. Details of the call will be issued the week prior to the results announcement.