La-Z-Boy sales up 2.1% in quarter, 6.6% for fiscal year

La-Z-Boy said sales edged up 2.1% in the final quarter of its fiscal year, while net income fell due to a restructuring of its case goods business.

The company said sales were hampered in February – the first month of the quarter – by the lingering effects of the severe winter weather in the Midwest and Northeast, but had begun to rebound by the time the quarter ended on April 26.

Upholstery sales rose 2.3% in the quarter, while case goods sales fell 5%.

“Although sales in the upholstery segment were up slightly, we believe they were adversely impacted by weather issues beginning in the third quarter, affecting the written order rate, and extending into February, where the La-Z-Boy Furniture Galleries store network experienced a 4.9% decline in same-store sales,” said Kurt Darrow, chairman, president and CEO.

Net sales for the quarter totaled $353 million, up from $345.8 million in the same quarter last year.

Net income was $12.2 million, or 23 cents per share. That was down from $18.3 million, or 33 cents per share, in last year’s fourth fiscal quarter. The most recent quarter, however, included restructuring charges of $4.95 million stemming from the upcoming shutdown of its case goods factory in Hudson, N.C., and the decision to sell its Lea Inds. youth furniture operation.

For the fiscal year ended April 26, net sales were $1.36 billion, an increase of 6.6% from $1.27 billion the previous fiscal year.

Full-year net income totaled $55.1 million, or $1.02 per share. That’s up 18.7% from $46.4 million, or 85 cents per share, the previous fiscal year.

“Overall, we are pleased with our results for fiscal 2014 full year,” said Darrow. “We increased sales, operating profit, cash flow and the dividend while strengthening our balance sheet.”

He pointed out that the retail store network recorded a 6% same-store sales increase for the year, while wholesale sales in the upholstery segment were up 6.7%.

“Moving forward, we believe the initiatives we have established throughout our wholesale and retail operations, coupled with the financial strength and flexibility to invest in our business, will position us for continuing, long-term profitable growth,” Darrow said. “We remain optimistic about our strategic initiatives to deliver profitable growth against an uncertain backdrop, particularly as it relates to housing.”

The company ended the year with 315 La-Z-Boy Furniture Galleries stores – including 101 company-owned locations – and 570 Comfort Studio locations in independent furniture stores.

For the current fiscal year, which ends in late April 2015, the company is planning 30 to 35 store projects involving company-owned and licensed stores. The total includes new store openings, remodels and relocations, and should result in a net gain of 15 stores.

Source: Furniture Today