Key Highlights
- Fourth quarter adjusted earnings per share reached $1.26, demolishing the analyst consensus of $0.82 by $0.44
- Quarterly revenue totaled $570 million, matching the Street’s expectation of $569 million
- Shares soared up to 17% during pre-market hours Wednesday following Tuesday’s 7.2% decline
- Operating margin on an adjusted basis grew to 9.9%, up from 9.4% in the same quarter last year
- First quarter revenue outlook of $490–$510 million features a midpoint exceeding the $495 million Street estimate
Shares of La-Z-Boy (LZB) rocketed higher in early Wednesday trading, jumping as much as 17% to reach $40.69 following the furniture retailer’s impressive fourth quarter results that significantly exceeded analyst projections.
The company delivered adjusted profit of $1.26 per share, substantially outperforming the consensus forecast of $0.82. Sales totaled $570 million for the quarter, essentially matching Wall Street’s $569 million projection.
The strong results came on the heels of a difficult Tuesday session. LZB shares had dropped 7.2% the previous day, making Wednesday’s rally partly a rebound from those declines. 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 earlier worries about weather-related sales headwinds.
“Encouragingly, total sales were in line with guidance and essentially in line with consensus,” Thomas noted in his commentary. “Recall, management previously noted that early February trends were impacted by weather events.”
Chief Executive 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 Gains and Store Performance
The furniture maker’s adjusted operating margin climbed to 9.9% from the prior year’s 9.4%. On a GAAP basis, operating margin jumped 200 basis points to reach 7.2%.
Retail operations delivered strong momentum, with written sales climbing 11% and delivered sales increasing 9% to reach $270 million, fueled by newly acquired locations and fresh store openings. Comparable store sales declined 2%, though this represented sequential improvement from the previous quarter.
The company’s retail footprint now includes 230 company-owned locations throughout North America, accounting for 61% of its 378-store network. This expansion reflects an intentional strategy — La-Z-Boy has been acquiring independent dealer stores to expand its direct retail presence.
Operational Restructuring Complete
La-Z-Boy wrapped up its divestiture of the American Drew and Kincaid wholesale casegoods operations in May. The company also concluded a U.K. supply chain reorganization in April. These transactions were part of a comprehensive initiative to optimize the business structure.
Looking ahead to Q1, management projected sales ranging from $490 million to $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%. Company officials highlighted that Q1 traditionally represents the slowest period due to seasonal dynamics and a scheduled annual manufacturing facility closure.
Futures tied to the S&P 500 gained 0.1% heading into Wednesday’s market opening.
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