Tuesday, La-Z-Boy Inc. (LZB), a provider of upholstery and wood casegoods furniture products, reported a profit for the second quarter of fiscal 2010, compared to a loss last year, reflecting lower costs of goods and restructuring charges.
The Monroe, Michigan-based company's net income attributable to the company for the second quarter was $5.91 million or $0.11 per share, compared to a loss of $53.74 million or $1.05 per share in the previous year.
The 2010 second-quarter results include a $0.01 per share restructuring charge, primarily related to the consolidation of the company's casegoods facilities and the previously announced store closures within the company's retail segment. La-Z-Boy's fiscal 2009 second-quarter results included a non-cash $0.74 per-share charge for a valuation allowance against the company's deferred tax assets and a $0.04 per-share restructuring charge.
On average, three analysts polled by Thomson Reuters expected the company to report earnings of $0.12 per share for the quarter. Analysts' estimates typically exclude special items.
Total sales for the quarter declined 9.4% to $300.71 million from $331.95 million a year ago, reflecting ongoing difficult macroeconomic conditions. Analysts estimated revenues of $284.76 million for the second quarter.
By segment, sales from Upholstery Group declined 6.1% to $232.78 million from last year. However, the segment's operating margin increased to 10.9% from 3.4% in the prior year's quarter. Casegoods Group sales were $37.30 million, down 23.0% from the previous year. The segment operated at a break-even level compared to a 1.6% operating margin in last year's second quarter.
Retail Group sales declined 3.7% to $38.01 million from a year ago. The retail group posted an operating loss of $5.3 million for the quarter, and its operating margin was13.9%. VIEs reported sales of $12.25 million, higher than $11.79 million a year earlier.
Cost of goods sold declined to $204.96 million from $243.09 million last year. Restructuring charges were $0.66 million, down from $2.24 million in the previous year.
Gross profit for the quarter was $95.08 million, compared to $86.62 million a year ago.
Selling, general and administrative expenses were reduced to $84.70 million from $101.50 million last year.
Income tax expenses for the quarter declined to $3.76 million from $36.03 million a year earlier.
For the six-month period, net income was $7.89 million or $0.15 per share, compared to a loss of $62.29 million or $1.21 per share in the same period of the previous year. Total sales for the period declined to $563.38 million from $653.60 million last year.
Looking forward, the company said it remains cautious about the overall macroeconomic environment, although the magnitude of sales volume declines is not so great as it experienced over the last several quarters.
LZB closed Tuesday's regular trading at $7.18, down 0.20 or 2.71%, on a volume of 1.23 million shares on the NYSE. In after hours, the stock further went down 0.08 or 1.1%, trading at $7.17.
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