La-Z-Boy | $LZB Stock | Stock Beaten Down On Earnings Miss

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La-Z-Boy Incorporated (NYSE: LZB)

On Tuesday August 22, 2017 La-Z-Boy Incorporated announced their fiscal first-quarter earnings report.

While sales increased 4.8%, earnings fell well below analyst expectations. Earnings came in at $0.24 per share which compares with $0.28 per share in the same quarter last year. And the consensus analyst was $0.29 per share.

Revenues came close though; expected revenues were $357.7 million dollars and they came in at $357.1 million dollars. Interestingly, same-store sales increased just under 1%. However, this didn’t add enough to the bottom line to satisfy investors.

Shares ended the day on Tuesday at $31.25 which was up $0.10 for the day. However in the after-market trading session, shares fell -14.24% closing at $26.80 or down $4.45. Shares have traded in a 52-week range from a low of $22.09 to a high of $34.10.

The company pays a 1.41% annually to shareholders. Not bad when you consider other options in the banking institutions.

The Charts

The above price chart shows the daily price action going back to the beginning of 2017. One can easily see the yellow horizontal line that price found as support after it broke through on 6/21.

The above price chart shows the intra-day action on Tuesday on the left, and the after hour session on the right. It is easy to see just exactly when earnings were announced to the public creating massive sell orders by investors and traders looking to exit positions in the aftermarket.

Company Comments

Kurt L. Darrow, Chairman, President and Chief Executive Officerhad this to say;

“After a strong finish to fiscal 2017, we are disappointed with our start to this fiscal year.  Although we posted a consolidated sales increase for the quarter, much of it related to acquired sales which did not add volume to our upholstery manufacturing operations which is our most profitable segment.  Lower volume throughout our plants made it difficult to absorb fixed costs and this, combined with the normal seasonal slowdown and continued investments across the business, impacted our upholstery operating margin for the period. Additionally, due to acquisitions and growth in our retail segment, SG&A expenses increased during the quarter.  As we move forward, we intend to manage our SG&A appropriately given various levels of volume.  Our casegoods business performed well for the quarter as we continue to improve our product offering, value proposition and service levels to our customers.  We believe this business is well positioned for continued growth moving forward.Over the past year, we have developed a comprehensive e-commerce strategy to address the evolution in furniture sales through this channel and are pursuing three opportunities:  increasing online sales of La-Z-Boy furniture through la-z-boy.com and other digital players; leveraging the strength of our world-class global supply chain to support other e-commerce brands; and investing in new online companies.  One such investment that converted to preferred shares in a recent round of financing, has already increased in value and contributed to our earnings this quarter.”

Company Profile

La-Z-Boy Incorporated manufactures, markets, imports, exports, distributes, and retails upholstery furniture products, accessories, and casegoods furniture products in the United States, Canada, and internationally. It operates through Upholstery, Casegoods, and Retail segments.

The Upholstery segment manufactures and imports upholstered furniture, such as recliners and motion furniture, sofas, loveseats, chairs, sectionals, modulars, ottomans, and sleeper sofas. This segment sells its products directly to La-Z-Boy Furniture Galleries stores, operators of Comfort Studios and England custom comfort center locations, dealers, and other independent retailers.

The Casegoods segment imports, markets, and distributes casegoods/wood furniture, including bedroom sets, dining room sets, entertainment centers, and occasional pieces, as well

as manufactures upholstered furniture. This segment sells its products to dealers, La-Z-Boy Furniture Galleries stores, and other independent retailers under the American Drew, Hammary, and Kincaid brands.

The Retail segment sells upholstered furniture, casegoods, and other accessories to the end consumer through its retail network. This segment operates a network of 347 La-Z-Boy Furniture Galleries stores and 557 Comfort Studio locations, as well as in-store programs with 527 outlets in Kincaid and England.

La-Z-Boy Incorporated also produces reclining chairs; and manufactures and distributes residential furniture. The company was formerly known as La-Z-Boy Chair Company and changed its name to La-Z-Boy Incorporated in 1996. La-Z-Boy Incorporated was founded in 1927 and is based in Monroe, Michigan. -YahooFinance

 

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