Home furniture maker La-Z-Boy Inc. (LZB: Quote), said Tuesday its first quarter profit plunged from last year, when results singularly benefited from hefty tax gains. Sales for the quarter meanwhile increased over 7 percent and easily topped Street estimates, as both Wholesale Upholstery and Retail businesses performed well.
Moving forward, La-Z said economic challenges are expected to dampen growth prospects, but the company expects to cushion the impact, while banking on its marketing strength, distribution network, as well as cost control measures.
Following the news, La-Z Boy shares initially gained 7.5 percent in after-hours trade on the New York Stock Exchange, but failed to maintain the rally. The stock is currently losing 1.37% at $58.14.
La-Z-Boy, which makes namesake living-room recliners, said same-store written sales for Furniture Galleries stores increased 9.2 percent during the quarter.
Among its businesses, sales at Wholesale Upholstery increased 9.5 percent, while case goods business edged up 1.4 percent. At retail segment, delivered sales rose 17 percent from the prior year.
Monroe, Michigan-based La-Z-Boy reported first quarter net income of $4.4 million or $0.08 per share, compared to $45.5 million or $0.85 per share last year.
On average, five analysts polled by Thomson Reuters expected earnings of $0.08 per share for the quarter. Analysts' estimates typically exclude special items.
Results for the prior year quarter included a benefit of $43.4 million related to a reduction of certain valuation reserves against deferred tax assets.
Sales for the quarter totaled $301.5 million, compared to $280 million last year. Analysts had a consensus revenue estimate of $290.48 million for the quarter.
The company recently announced plans to acquire the southern Ohio market, consisting of nine La-Z-Boy Furniture Galleries stores which had combined annual revenue in calendar 2011 of about $30 million.
LZB closed Tuesday at $13.50, down 0.74%, on a volume of 0.8 million shares on the NYSE. In after hours, the stock gained $1.05 or 7.78%.
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by RTT Staff Writer
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