La-Z-Boy Sales Drop 4.6% For Fiscal Year

June 19, 2007  by in UnCategorized   

By Home Furnishings Business in Case Goods on June 2007 La-Z-Boy posted net sales of $406.9 million for the fourth quarter ended April 28, a 9.4 percent decline from the $449.4 million posted during the same quarter last year.

Net income for the quarter hit $7.7 million compared to a loss of $10.3 million in last year’s fourth quarter.

Sales for the year were $1.62 billion, a 4.6 percent drop from $1.7 billion for last year. Net income for the year was $4.1 million, compared to a prior-year loss of $3 million.

“We continue to operate in an environment marked by extremely difficult retail conditions across the industry and have remained focused on running our operations with efficiency and ensuring our cost structure is in line with our revenue stream,” said Kurt Darrow, president and chief executive officer. “Despite significantly lower volume in both of our wholesale businesses, we mainted our operating margins this quarter, reflecting the disciplines established throughout our business.”

Sales from the company’s upholstery operations were $303.5 million compared with $341.8 million in the same period last year. For the full year, sales were $1.2 billion compared with $1.3 billion last year.

During the quarter, La-Z-Boy finalized the sale of Sam Moore to Hooker Furniture for $9.9 million and closed two factories.

Case goods sales for the quarter were $64.4 million, a 13.3 percent decline from $74.3 million during the same period last year. For the year, sales in the category were off 10.2 percent at $262.7 million, compared to $292.6 milion in the previous year.

During the year, the company sold American of Martinsville and said it was looking for buyers for Pennsylvania House and Clayton Marcus.

Retail sales for the quarter for the company’s chain of stores were $54.5 million, basically flat against the comparable quarter. For the year, sales climbed 3.2 percent to $220.3 million from $213.4 million, primarily due to additional stores. For the quarter, the retail segment posted a net loss of $7.9 million compared to a loss of $8.5 million in last year’s fourth period. For the year, the retail group posted a loss of $31.2 milion compared to $26 million last year.

“The external environment for home furnishings remains very difficult, and the first quarter is typically the company’s slowest period due to seasonal forces,” Darrow said. “While we have made progress in managing the cost structure of our wholesale businesses, we believe challenging conditions in the marketplace will prevail and we will continue to focus on matching costs to our revenue stream.”

Darrow said the company will no longer provide quarterly projections, instead relying only on annual guidance reports.

For fiscal 2008, Darrow said he expects a 5 percent to 10 percent deline in sales compared with fiscal 2007.