La-Z-Boy Sales Rise on Strong Retail, Upholstery Results
MONROE, Mich.-With healthy sales gains in retail and upholstery, La-Z-Boy's first quarter net sales rose 7.6 percent to $301.5 million.
Broken down by business segment, La-Z-Boy realized a sales gain of 9.5 percent in its upholstery segment, 1.4 percent in its casegoods segment and 17 percent in the retail segment. Kurt Darrow, La-Z-Boy's chairman, president and CEO, said the two manufacturing segments benefited from the company's brand-platform marketing initiative, which "is successfully communicating to the consumer that La-Z-Boy offers a wide selection of stylish furniture." He added that the retail segment's results marked the 14th consecutive quarter of improvement for this operational sector, and included an increase in average ticket, thus leading to higher margins.
Net income in the quarter totaled $4.4 million--which was down 90 percent from last year's first quarter due to an income tax benefit from the reduction of certain valuation reserves against the furniture manufacturer/retailer's deferred tax assets, according to a statement from La-Z-Boy. Factoring out that benefit, La-Z-Boy's net in this year's first quarter rose 21.9 percent.
Gross margin in the quarter gained 83 basis points to finish at 29.7 percent. Selling, general and administrative expenses rose 5.8 percent in dollars but fell 46 basis points as a percentage of sales, to 27.2 percent.
Acknowledging that the economy remains challenging for the furniture industry, Darrow added, "However, with the strength of our brand, the success of our marketing initiatives and the vast network of La-Z-Boy-branded distribution outlets, we believe we have the ability to continue to grow and increase our market share."