La-Z-Boy posts quarterly loss, cites weak demand
LOS ANGELES (Reuters) - Furniture maker and retailer La-Z-Boy Inc (LZB.N) reported a quarterly loss on Tuesday and the company said it would not meet its fiscal 2008 outlook, hurt by a depressed housing market and disappointing sales.
The company cited continued weak overall demand for furniture and said it was delaying plans for new stores in southeastern Florida due to the depressed housing market there.
A net loss in the fiscal second quarter came to $9.9 million, or 19 cents per share, on charges related to write-downs, restructuring and discontinued operations, compared with a year-ago profit of $1.95 million, or 4 cents per share .
In a statement, Chief Executive Kurt Darrow cited "weak demand at retail for furniture, the decline in consumer confidence and the overall uncertain economic environment."
Furniture makers have been hammered in the past two years and continue to be pressured by the U.S. housing meltdown, uneven consumer spending, credit worries and high gasoline prices. Buyers are putting off purchases of big-ticket items such as furniture, while slower housing purchases mean fewer homes to furnish.
Excluding a write-down of goodwill, charges from discontinued operations and restructuring, the company posted earnings of 1 cent per share.
That was far short of a Wall Street consensus estimate of profit of 7 cents per share, according to Reuters Estimates.
Sales fell 12 percent to $365.4 million, short of the $371.6 million analysts, on average, had been expecting.
La-Z-Boy, the Monroe, Michigan-based company best known for its recliners, has been selling non-core assets, closing lower- performing stores and taking other steps to improve results.
The company sold the Clayton Marcus and Pennsylvania House furniture brands in October. Sam Moore Furniture, a maker of customized chairs, was sold to Hooker Furniture earlier this year.
La-Z-Boy said it would not be able to attain its previous fiscal 2008 outlook calling for sales to decline 5 percent to 10 percent and adjusted earnings to range between 45 cents and 60 cents.
The company now expects that sales in the second half of the year will be down between 4 percent to 8 percent and adjusted earnings will range between 6 cents to 14 cents per share. That estimate does not include restructuring charges, effects from discontinued operations or other one-time charges.
Wall Street, on average, has been expecting adjusted earnings of 38 cents in the second half of fiscal 2008, according to Reuters Estimates.
La-Z-Boy shares, which are down nearly 38 percent this year, closed at $7.40 on the New York Stock Exchange, up 3 percent.
(Reporting by Alexandria Sage; additional reporting by Karen Jacobsl; editing by Andre Grenon)
