American furniture manufacturer La-Z-Boy Incorporated (NYSE:LZB) posted its first fiscal quarter earnings report today that missed most analysts estimates sending their shares down by more than 14% during the after-hours trading on Tuesday.
For their first fiscal quarter, the company posted earnings of $0.21 per share falling short of most analyst estimates at $0.29 earnings per share. La-Z-Boy’s revenue which jumped by 4.9% year over year to $357.1 million still missed most analyst expectations by $2.24 million.
The Monroe-based company’s sales in the upholstery department was 2.6% higher for the quarter to $274.4 million. However,the operating margin of the business was 8.5% compared to the same period last year at 11.4%. The company’s sales for their wooden furniture was up by 1.9% for the quarter to $25.5 million with the margins rising to 10.7% from previously standing at around 8.6%. La-Z-Boy’s retail sales also jumped by 15.5% to $110.5 million.
La-Z-Boy’s earnings report also showed that their operating cash flow is at $19.5 million while their same-store sales from La-Z-Boy Furniture Galleries has risen by 0.7%.
"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.” said La-Z-Boy chief executive officer Kurt L. Darrow regarding the company’s most recent earnings release.
Darrow also explained that the company’s continuous investments in their business affected their operating margin from upholstery during the quarter while weaker plants volume has made it even harder for the company to absorb fixed costs along with the normal seasonal slowdown.
La-Z-Boy shares are down by more than 15% during Tuesday after-hours trading following the release of their disappointing earnings report. It closed at $31.25 during regular market hours.