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La-Z-Boy shares fall after results show retail growth, weaker wholesale
The furniture maker said fiscal second-quarter sales will be $500 million to $520 million, below consensus around $537 million, even as retail sales rose 10% in the quarter.
La-Z-Boy Incorporated (NYSE: LZB) sank about 16% in after-hours trading after its fiscal first-quarter results highlighted a growing gap between a stronger company-owned retail business and weakening wholesale demand, including softness at its Joybird unit, Yahoo Finance reported. In the quarter, La-Z-Boy’s consolidated sales declined 3% to $475.7 million, while retail delivered sales growth of 10% to $228.6 million and total written retail sales rose 16%. Written same-store sales increased 3%, but adjusted operating margin narrowed to 3.9% from 4.8%. Management’s outlook raised the most concern, with fiscal second-quarter sales guided to $500 million to $520 million, below consensus estimates of about $537 million, and an adjusted operating margin of 4.0% to 5.5%. Adjusted diluted earnings were $0.43 per share, down from $0.47 a year earlier, and adjusted operating income fell 20% to $18.7 million. Segment results showed the pressure outside retail. Wholesale sales dropped 9% to $322.9 million, remained down 5% excluding a divested casegoods business, and Joybird delivered sales declined 4% with written sales down 17%. On the retail side, La-Z-Boy added four company-owned stores during the quarter, taking the total to 234, and it ended the period with $267.3 million in cash and no external borrowings.