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KeyBanc Capital Markets has maintained its Sector Weight rating on shares of La-Z-Boy Incorporated (NYSE: NYSE:LZB). The furniture company's first-quarter results for fiscal year 2025, ending in July, surpassed expectations, driven by stronger sales and improved margins. This performance comes despite a challenging market environment.
La-Z-Boy experienced a sequential improvement in company-owned comparable store sales, which showed a decline of 3% compared to a 5% decline in the fourth quarter. This improvement was attributed to robust conversion rates and a boost in design sales.
The company's Century Vision strategy, which focuses on long-term growth and efficiency, was emphasized in recent meetings with management. The strategy has begun to show its effectiveness, particularly through the expansion of the Wholesale channel, which was evident in the latest quarter's performance.
Looking forward, La-Z-Boy has provided guidance for the second quarter of fiscal year 2025. The forecast suggests that both sales and earnings per share (EPS) may fall below the consensus estimates.
In other recent news, La-Z-Boy disclosed its first quarter results, surpassing analyst expectations with an adjusted earnings per share of $0.62 and a revenue increase of 3% YoY to $495.5 million.
However, the company's guidance for the next quarter fell short of Wall Street's predictions, expecting revenue to be between $495 million and $515 million, beneath the forecasted $518.4 million. As part of the recent developments, La-Z-Boy's Wholesale segment sales rose by 5% to $351 million, propelled by higher delivered volume to external customers, while Retail segment sales dipped by 3% to $202 million.
The company generated $52 million in operating cash flow during the quarter, a substantial increase from the $26 million from the same period last year. La-Z-Boy returned approximately $42 million to shareholders via share repurchases and dividends.
InvestingPro Insights
La-Z-Boy Incorporated's (NYSE:LZB) recent first-quarter performance, which surpassed expectations, can be further contextualized with real-time data and insights from InvestingPro. The company's market capitalization stands at $1.76 billion, with a P/E ratio of 14.67, reflecting a potentially attractive valuation for investors. The P/E ratio adjusted for the last twelve months as of Q4 2024 is slightly lower at 13.84, suggesting a stable earnings outlook relative to its share price.
InvestingPro Tips highlight La-Z-Boy's financial prudence and shareholder-friendly practices. The company has not only raised its dividend for three consecutive years but has also maintained dividend payments for 13 consecutive years. This consistency is supported by cash flows that can sufficiently cover interest payments, indicating a solid financial foundation. Moreover, La-Z-Boy operates with a moderate level of debt and has liquid assets that exceed short-term obligations, which could reassure investors about the company's ability to navigate economic headwinds.
Investors may also find encouragement in La-Z-Boy's strong return over the last three months, with a price total return of 17.62%. This performance is a testament to the company's resilience and the effectiveness of its Century Vision strategy in a challenging market environment. For those seeking more detailed analysis and additional insights, InvestingPro offers a comprehensive list of tips, including information on profitability and analyst predictions for the company's future performance. La-Z-Boy's next earnings date is set for August 20, 2024, which will provide further clarity on the company's trajectory.
With these considerations in mind, La-Z-Boy's current and prospective investors can explore a broader set of financial metrics and expert analysis on InvestingPro, which features additional tips to inform their investment decisions.
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