=La-Z-Boy (LZB) reported earnings on Tue 22 August 2017 (a/h)

La-Z-Boy misses by $0.05, reports revs in-line

• Reports Q1 (Jul) earnings of $0.24 per share, $0.05 worse than the Capital IQ Consensus of $0.29; revenues rose 4.8% year/year to $357.1 mln vs the $359.34 mln Capital IQ Consensus
• The fiscal 2018 first quarter's results included a $0.03 per share benefit in other income for an investment gain, and last year's first quarter included a $0.03 per share benefit for a legal settlement
  • Sales in the company's upholstery segment increased 2.6% to $274.4 million and the operating margin declined to 8.5% from 11.4% in last year's first quarter, which included a 0.9 percentage point benefit from a legal settlement. In the casegoods segment, sales increased 1.9% to $25.5 million and the operating margin increased to 10.7% from 8.6%. Sales in the retail segment increased 15.5% to $110.5 million. On the core base of 122 stores included in last year's first quarter, delivered sales declined 1.1% versus the prior year and the segment's operating margin decreased to 1.6% from 2.3%
• Kurt L. Darrow, Chairman, President and Chief Executive Officer of La-Z-Boy, said, "After a strong finish to fiscal 2017, we are disappointed with our start to this fiscal year. Although we posted a consolidated sales increase for the quarter, much of it related to acquired sales which did not add volume to our upholstery manufacturing operations which is our most profitable segment. Lower volume throughout our plants made it difficult to absorb fixed costs and this, combined with the normal seasonal slowdown and continued investments across the business, impacted our upholstery operating margin for the period. Additionally, due to acquisitions and growth in our retail segment, SG&A expenses increased during the quarter. As we move forward, we intend to manage our SG&A appropriately given various levels of volume. Our casegoods business performed well for the quarter as we continue to improve our product offering, value proposition and service levels to our customers. We believe this business is well positioned for continued growth moving forward."