La-Z-Boy Profit Top Estimates; Stock Up - Update

(RTTNews) - Home furniture maker La-Z-Boy Inc. (LZB), Tuesday reported a better-than-expected jump in second-quarter profit as sales at its wholesale upholstery and retail segments expanded, and cost pruning measures also added to the bottomline.

The company raised its quarterly dividend by 50 percent to $0.06 per share.

Investors cheered the results, sending La-Z-Boy shares to a new high for the year - climbing nearly seven percent in after-hours trade at $26.11 on the New York Stock Exchange.

"Our performance for the quarter reflects the successful execution of our sales, merchandising and integrated retail strategies," said CEO Kurt Darrow, adding that prospects for the future appear bright.

La-Z-Boy makes upholstery and case-goods furniture products as well as reclining chairs.

The Monroe, Michigan-based company posted quarterly net income of $16.7 million or $0.31 per share, compared with $6.6 million or $0.12 per share last year.

Results for the quarter include $0.01 per share for the reduction of certain valuation reserves against state deferred tax assets, while the prior year recorded $0.03 per share in restructuring charges.

On average, five analysts polled by Thomson Reuters estimated earnings of $0.26 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the second quarter grew 13.7 percent to $366.4 million from $322.3 million a year ago. Analysts had a consensus sales estimate of $349.4 million for the quarter.

Same-store written sales for the La-Z-Boy Furniture Galleries store network climbed 9.8 percent, but slower than the 13.3 percent growth seen a year ago.

At wholesale division, upholstery sales, which accounts for most of the business, climbed 14.2 percent, while its smaller segment of case-goods saw sales edge down 1.7 percent.

Retail segment sales jumped 19.9 percent, with strength in the Southern Ohio stores.

Upholstery segment's operating margin rose to 11 percent from 8.4 percent last year, while for Retail, it was 4.4 percent, compared with a negative 0.9 percent.

La-z-Boy stock closed Tuesday at $24.42, up $0.06 or 0.25%, on a volume of 0.47 million shares. In after hours, the stock gained $1.69 or 6.92% at $26.11. In the past year, the stock trended in the range of $3.30 - $25.13.