La-Z-Boy Reports Quarterly Loss

February 13, 2007  by in UnCategorized   

By Home Furnishings Business in Recliners on February 2007 La-Z-Boy, Monroe, Mich., reported that net sales in its third quarter were down 9.6 percent to $403.9 million. The decline resulted in a per-share loss of 15 cents. In its earnings announcement Wednesday, the company also said it is in discussions to sell its Pennsylvania House and Clayton Marcus units, saying those divisions are not a strategic fit for La-Z-Boy’s future direction.

Separately, La-Z-Boy announced an agreement to sell its Sam Moore business to Hooker Furniture.

For the nine months that ended Jan. 27, net sales totaled $1.2 billion, a decrease of 2.8 percent compared with the prior-year period. “Despite the challenging sales environment pervasive throughout our industry, we were able to improve margins in our wholesale businesses while doing an excellent job managing our inventory, reducing our debt and generating cash,” said President and CEO Kurt Darrow, referring to the company achieving an operating margin of 7.6 percent during the quarter. “In our company-owned retail segment, we continued to execute against our strategy to strengthen our performance and, therefore, expect meaningful improvement in our next fiscal year.”

Looking ahead, Darrow expects a difficult fourth quarter. The company expects sales to be down 8 percent to 10 percent, and earnings per share to be in the range of 3 cents to 7 cents.

“Although we have made strides in our wholesale divisions from a margin perspective, the challenging retail environment persists and we believe the industry, overall, will continue to go through a difficult period,” he said.