La-Z-Boy Profit Down, Misses View; Shares Slip 9%

(RTTNews) - La-Z-Boy Inc. (LZB) Tuesday reported a drop in profit for the third quarter, as sales were hurt due mainly to some extreme cold weather. The home furniture maker's bottom line was also impacted by a loss from discontinued operations. Both earnings and revenues for the quarter came in short of Wall Street estimates, sending La-Z-Boy shares down nearly nine percent in after-hours trade.

Monroe, Michigan-based La-Z-Boy's third-quarter profit dropped to $16.5 million or $0.31 per share from $17.1 million or $0.32 per share last year.

Net income from continuing operations attributable to La-Z-Boy was $17.2 million or $0.32 per share, compared with $16.8 million or $0.31 per share, which included $0.04 relating to gains on the sale of investments and a related tax benefit.

On average, five analysts polled by Thomson Reuters expected the company to earn $0.35 per share for the quarter. Analysts' estimates typically exclude special items.

The company recorded a loss from discontinued operations of $717 thousand, compared to a profit of $291 thousand last year.

On February 13, the company agreed to sell Bauhaus U.S.A. Inc., an operating company within La-Z-Boy's upholstery segment, to an investor group led by Bauhaus President Britt Allred. The third-quarter results have been reclassified to reflect the treatment of Bauhaus as a discontinued operation, the company noted.

La-Z-Boy, which makes namesake living-room recliners, said sales for the quarter grew 3 percent to $350.4 million from $340.2 million last year. Analysts estimated revenues of $378.7 million for the quarter.

Chief Executive Kurt Darrow said, "We believe the fundamental pace of our business and ability to improve our profitability on sales growth remains steady and unchanged. During the third quarter, however, weather conditions did have some impact on sales, production and deliveries."

Same-store written sales for the La-Z-Boy Furniture Galleries store network increased 3.6 percent for the quarter compared to a 11.2 percent increase last year.

Moving ahead, Darrow stated, "We remain optimistic about our ability to continue to grow profitably in the future. The cadence of our business remains strong, particularly as we head into the fourth quarter, which is historically our largest volume period, and roll out our Urban Attitudes collections."

The company also declared a dividend of $0.06 per share, which will be paid on March 10 to shareholders of record as of February 28.

LZB closed Tuesday's trading at $27.11, down $0.33 or 1.20%, on the NYSE. The stock further dropped $2.32 or 8.56% in after-hours trade.