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La-Z-Boy 2Q Sales Drop 2.6% to $293 Million
November 22,
2010 by in UnCategorized 
By Home Furnishings Business in Financial Reports on November 23, 2010
La-Z-Boy Inc. (NYSE: LZB) reported net income of $3.9 million for the second quarter ended Oct. 23, compared to $6 million posted in the second quarter in fiscal 2010.
The company's net sales for the second quarter were $293 million, down 2.6 percent compared with net sales in the second quarter of fiscal 2010.
While macroeconomic challenges continue to impact the overall furniture industry, the significant changes made to our cost structure have enabled La-Z-Boy to operate profitably in the lower-volume environment," said Kurt Darrow, president and CEO. "Importantly, with this lower cost structure in place, we are focusing on initiatives to pave the way for future growth and market share gains when the economy strengthens and consumers are more inclined to purchase big-ticket items. While these investments are presently impacting our earnings power, we believe they are essential to positioning the company for the future. Specifically, we are investing in the La-Z-Boy brand platform, research, technology and customer care.
For the fiscal 2011 second quarter, sales in the companys upholstery segment decreased 3.4 percent to $224.9 million compared with $232.8 million in the prior years second quarter. The operating margin for the 2011 quarter was 7.6 percent compared with 10.9 percent in last years comparable quarter.
In the casegoods segment, sales for the fiscal second quarter were $39.5 million, up 5.9 percent from $37.3 million in the fiscal 2010 second quarter, and the segments operating margin was 3.5 percent compared with -0.5 percent.
For the quarter, retail sales were $39.2 million, up 3.2 percent compared with the prior-year period. The retail group posted an operating loss of $4.4 million for the quarter, compared with a loss of $5.3 million in last years second quarter.
Our retail group continues to make progress in decreasing its quarterly losses, through continuous improvements in selling processes, expense controls and marketing efficiencies, but is challenged by its lease expense to sales ratio in the lower volume environment," Darrow said.
The entire earnings release can be downloaded from La-Z-Boy's Web site.