MONROE, Mich.–Sales increases and the company’s lean operating platform fueled La-Z-Boy to a dramatic 99.5 percent increase in second-quarter net income, to $7.9 million.
The manufacturer/retailer’s net sales in the quarter, which ended on Oct. 29, rose 5 percent to $307.7 million. The sales pickup included a 34.3 percent increase in sales from its retail segment. Kurt Darrow, chairman, president and CEO, attributed this strong performance to increases in average ticket and close ratio, plus La-Z-Boy’s “enhanced selling processes,” which improved the shopping environment for consumers. Sales in the company’s wholesale segment posted a sales increase of 7.3 percent in upholstery and a decline of 9 percent in casegoods.
La-Z-Boy’s cost-containment efforts also benefited the company’s second quarter. Gross margin rose 208 basis points to 31.1 percent. Selling, general and administrative expenses, while up 4.7 percent on a dollar basis, declined eight basis points as a percentage of sales to 27.2 percent.
Looking ahead to the third quarter, Darrow said he expected the economic environment to remain challenging, but that the La-Z-Boy brand’s strength, its marketing campaign (including its “Live life comfortably” campaign featuring Brooke Shields) and its operating efficiencies will provide boosters to its results.