Furniture maker La-Z-Boy slips to fiscal 1Q loss on higher raw material costs, shipping delays

Costs, delays drag La-Z-Boy to 1Q loss

MONROE, Mich. — La-Z-Boy Inc. said Tuesday it slid to a loss in its fiscal first quarter as the furniture maker faced higher raw material costs and shipping delays at its operations in Mexico. Shares fell 5 percent in aftermarket trading.

However, management said the higher costs and supply chain disruptions have somewhat abated, and it doesn’t expect those factors will affect its results in the rest of the year as much as they did in its 2011 first quarter.

“Historically, with our first quarter seasonally our slowest period of the year, the mix of one-time external factors exacerbated the pressure on sales and earnings for the quarter,” said Kurt L. Darrow, La-Z-Boy’s president and chief executive. “We believe this is not representative of La-Z-Boy’s performance going forward as we have a lean and efficient operating structure and are moving into what is typically a stronger selling season.”

The company posted a loss of $195,000, or break even on a per-share basis, for the three months ended July 24. That compares with net income of $2 million, or 4 cents a share, a year ago. The year-ago results included a penny-per-share charge related to consolidating its casegoods facilities and store closures.

Revenue was essentially flat at $263.3 million versus $262.7 million a year earlier. Upholstery sales rose nearly 3 percent to $201.9 million, while its casegoods sales also climbed about 3 percent to $36.8 million. Retail sales, however, fell 2 percent to $35.3 million.

Analysts polled by Thomson Reuters had expected the company to break even on a per-share basis, and generate revenue of $263.8 million.

Shares fell 37 cents to $7.15 in aftermarket trading after adding 37 cents, or 5.2 percent, to close the regular session at $7.52.

(This version CORRECTS that charge was in year-ago period.)