La-Z-Boy posts loss amid widespread housing woes
LOS ANGELES (Reuters) - U.S. furniture retailer La-Z-Boy Inc (LZB.N) reported an unexpected quarterly net loss on Tuesday amid an industrywide slump affecting companies from Home Depot (HD.N) to Restoration Hardware RSTO.O.
Furniture makers, as well as home furnishing retailers and others, have been struggling amid a shaky housing market, uneven consumer spending, credit worries and a recent history of high gasoline prices. Shoppers are foregoing purchases of big-ticket items like furniture, while slow housing sales mean fewer new homes to be furnished or renovated.
Home Depot on Tuesday blamed its first quarterly sales decline in more than four years on a "tough selling environment" in the current housing market, while Restoration Hardware announced it was slashing 100 jobs.
La-Z-Boy, which reiterated a previously issued yearly sales and earnings outlook, said a first-quarter net loss came to $8.7 million, or 17 cents a share, compared with a net profit of $2.3 million, or 4 cents a share, a year earlier.
Results included 4 cents per share in restructuring charges related to the closure and consolidation of facilities and retail locations.
Analysts, on average, had been expecting earnings per share of 2 cents, excluding special items, according to Reuters Estimates.
Sales fell 12.6 percent in the quarter to $344.4 million, the Monroe, Michigan-based company said, with decreases in each of its three divisions -- upholstery, casegoods and retail.
"Against the backdrop of ongoing challenging business conditions pervasive throughout the furniture industry, our results reflect a significant drop in volume, which made it difficult to absorb our current fixed costs," said Chief Executive Kurt Darrow in a statement.
Darrow added that the first quarter was typically the company's slowest reporting period and was not indicative of expectations for fiscal 2008.
The company reiterated a fiscal 2008 forecast of sales to be down 5 percent to 10 percent, with earnings per share in the range of 45 cents to 60 cents, excluding restructuring charges or other special items.
Restoration Hardware, meanwhile said it would cut 100 positions at its corporate headquarters due to the downturn in the home furnishings market.
The action, expected to save about $9 million annually and $3.5 million after charges for the balance of the year, was a "necessary decision that will enable us to operate more efficiently in the current environment," Restoration Hardware Chief Executive Gary Friedman said in a statement.
Home Depot Chief Executive Frank Blake said in a statement that he believes the housing and home improvement markets would remain soft into 2008.
Also on Tuesday, Wal-Mart -- largely considered a barometer of retail health -- said consumers were feeling economic pressure, as it turned in a disappointing quarterly earnings report amid slowing U.S. sales growth.
The company said it was seeing soft sales of home products driven by the slowdown in housing.
Shares of La-Z-Boy closed at $9.60, up 7 cents or .73 percent, on the New York Stock Exchange.
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