Key Highlights
- Fourth quarter adjusted earnings per share reached $1.26, significantly exceeding the analyst consensus of $0.82 by $0.44
- Quarterly revenue totaled $570 million, closely aligned with Wall Street’s $569 million projection
- Shares rallied up to 17% during pre-market hours Wednesday following a 7.2% decline in Tuesday’s session
- Adjusted operating margin improved to 9.9% compared to 9.4% in the same quarter last year
- First quarter outlook projects sales between $490–$510 million, with the midpoint exceeding the $495 million Street estimate
Shares of La-Z-Boy (LZB) rallied sharply during Wednesday’s pre-market session, gaining up to 17% to reach $40.69 following the furniture company’s impressive fourth quarter performance that significantly exceeded analyst projections.
The company delivered adjusted earnings of $1.26 per share, substantially surpassing the Street consensus of $0.82. Quarterly revenue totaled $570 million, nearly matching Wall Street’s forecast of $569 million.
The strong performance comes after shares took a beating in the previous session. LZB finished Tuesday’s trading down 7.2%, making Wednesday’s pre-market surge partly a rebound from those losses. Year-to-date through Tuesday’s close, the stock remained down approximately 5.9%.
Bradley B. Thomas, an analyst at KeyBanc who maintains an Overweight rating and $46 price target on LZB, described the quarterly performance as reassuring following previous worries about weather-related sales headwinds.
“Encouragingly, total sales were in line with guidance and essentially in line with consensus,” Thomas noted. “Recall, management previously noted that early February trends were impacted by weather events.”
CEO Melinda D. Whittington expressed optimism about the company’s trajectory. “We continue to drive our own momentum and are playing offense, led by our retail business expansion,” she stated.
Profitability Improvements and Retail Performance
The company’s adjusted operating margin climbed to 9.9% from 9.4% in the year-ago period. GAAP operating margin showed a 200 basis point improvement, reaching 7.2%.
Retail operations delivered strong results, with written sales increasing 11% and delivered sales climbing 9% to reach $270 million, propelled by newly acquired locations and store openings. Comparable store sales decreased 2%, though this represented sequential improvement from the previous quarter.
La-Z-Boy currently operates 230 company-owned retail locations throughout North America, accounting for 61% of its 378-store network. This footprint expansion reflects a strategic initiative where the company has been acquiring independent dealer stores to strengthen its direct retail presence.
Operational Restructuring Complete
The furniture maker wrapped up its withdrawal from the American Drew and Kincaid wholesale casegoods operations in May. Additionally, it concluded a supply chain reorganization in the United Kingdom during April. Both initiatives were part of a comprehensive strategy to optimize business operations.
Looking ahead to the first quarter, management projects sales ranging from $490–$510 million. The $500 million midpoint exceeds Wall Street’s $495 million expectation.
Adjusted operating margin for the first quarter is anticipated to fall between 4.0% and 5.5%. The company emphasized that the first quarter typically represents its softest period due to seasonal dynamics and a scheduled annual manufacturing facility closure.
Futures tied to the S&P 500 edged up 0.1% ahead of Wednesday’s market opening.
