La-Z-Boy Inc.'s LZB fiscal third-quarter earnings rose 14% as the furniture company reported higher revenue and saw its retail segment swing back to profitability.
Shares rose 10% to $17 in recent after-hours trading as results beat analysts' expectations. The stock is up 10% in the past 12 months.
"We continue to experience strong performance and improvement in our retail business, leading to profitability this quarter while further validating our integrated retail strategy," Chairman and Chief Executive Kurt L. Darrow said.
Looking ahead, Mr. Darrow said the company is "quite pleased" with the trends it is seeing in its business, noting the improving housing market, coupled with what is historically La-Z-Boy's strongest volume period, makes the company "cautiously optimistic as we move into the fourth quarter."
La-Z-Boy, known for its namesake recliners, has seen several quarters of sales growth despite a sluggish economy, before revenue turned negative in the fiscal fourth-quarter, owning to an added week of sales in the year-earlier period. The company returned to sales growth in more recent quarters but faced higher expenses tied to incentive compensation and increased marketing.
For the quarter ended Jan. 26, La-Z-Boy reported earnings of $17.1 million, or 32 cents a share, up from $15 million, or 28 cents a share, a year earlier. The latest period included four cents a share relating to gains on the sale of investments and a related tax benefit.
Revenue rose 10%, to $349.1 million.
Analysts polled by Thomson Reuters had recently forecast earnings of 23 cents on revenue of $337.8 million.
Gross margin widened to 32.5% from 31.5%.
The retail segment, which includes La-Z-Boy Furniture Galleries stores, swung to an operating profit of $2.67 million from a year-earlier loss of $646,000.
Same-store written sales, which La-Z-Boy tracks as an indicator of retail activity, rose 12%.
Meanwhile, the wholesale upholstery segment, the main contributor to the top line, saw revenue rise 12% to $279.9 million.
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