La-Z-Boy Posts Loss, Cuts Outlook

November 13, 2007  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on November 2007 Blaming weak demand for furniture, La-Z-Boy, Monroe, Mich., reported Tuesday that net sales in its second quarter declined 12 percent to $365.4 million, which resulted in an after-tax loss of $9.9 million. The company posted a $1.95 million gain in the same period last year.

With the decline, La-Z-Boy lowered its guidance for its 2008 fiscal year. It now expects sales in the second half of the year to be down 4 percent to 8 percent and earnings per share to be in the range of 6 cents to 14 cents—down from 30 cents in the second half of 2007.

President and CEO Kurt Darrow said, “While we are disappointed that, due to industry headwinds, the improvements we have made in our business model are not clearly evident in our results, we posted reasonable operating margins in each of our wholesale businesses on significantly lower volume. In the midst of what continues to be a challenging environment across the furniture sector, we are executing against our strategy and making the necessary changes to our business model to ensure we remain both a leading and competitive manufacturer, distributor and retailer.”

He said the sale of the company’s Clayton Marcus and Pennsylvania House brands concludes its “portfolio rationalization.” He said the company will focus on manufacturing processes and structure its retail operations as a more efficient, integrated entity.

The company’s $9.9 loss for the quarter, which translates into 19 cents per share, includes a 7 cents-per-share writedown of goodwill, a 12 cents-per-share charge from discontinued operations and a 1 cent restructuring charge.

Sales in the company’s upholstery segment decreased 11.4 percent and casegoods declined 20.6 percent. Same-store sales at company and independent La-Z-Boy Furniture Galleries stores were down 9.1 percent.