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MONROE, Mich. - La-Z-Boy Incorporated (NYSE:LZB) shares plunged 17% after the furniture retailer reported fiscal first-quarter results that fell short of analyst expectations, as challenging consumer demand weighed on performance.
The company posted adjusted earnings per share of $0.47 for the quarter ended July 26, missing the analyst estimate of $0.53. Revenue came in at $492.2 million, slightly below the consensus estimate of $494 million and down 1% compared to the same period last year.
"We were pleased to deliver sales and margin growth in our Wholesale segment for the quarter, primarily driven by our core North America La-Z-Boy wholesale business," said Melinda D. Whittington, Board Chair, President and Chief Executive Officer. "Investments in our Century Vision strategy to grow our Retail store footprint and expand brand reach, combined with soft industry demand, had a downward impact on our margin performance this quarter."
The company’s Retail segment saw written sales increase 5%, though written same-store sales declined 4%, reflecting what the company described as "an increasingly challenged consumer." Delivered sales in the segment increased 2% to $207 million. The Wholesale segment delivered a modest 1% sales increase to $353 million.
Adjusted operating margin contracted to 4.8% from 6.6% in the prior-year period, primarily due to deleverage in Retail same-store sales and investments in new stores.
For the fiscal second quarter, La-Z-Boy expects sales between $510-530 million and adjusted operating margin between 4.5-6.0%, as the company continues to navigate what it calls "a continued challenging consumer and macroeconomic environment."
"While continuing to advance our Century Vision strategy and drive long-term shareholder value, we are balancing our optimism in the long-term industry fundamentals and our competitive positioning with a pragmatic approach to current uneven consumer demand," Whittington added.
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