Furniture manufacturer La-Z-Boy Inc. (NYSE: LZB) saw its shares drop 16% in after-hours trading after reporting weaker-than-expected first-quarter results and issuing soft second-quarter guidance.
The company, based in Monroe, Michigan, posted adjusted earnings per share of $0.43, missing the analyst consensus of $0.49. On a GAAP basis, La-Z-Boy reported a diluted loss per share of $0.06, compared with earnings of $0.44 in the same period a year earlier. Revenue totaled $476 million, a 3% decline year-over-year and below the $495.45 million estimate.
Sales excluding the impact of the wholesale casegoods divestiture completed in May declined 1%. Segment performance showed a 10% increase in retail sales to $229 million, with written same-store sales up 3%. Wholesale delivered sales fell 9% to $323 million amid uneven order patterns throughout the quarter.
Adjusted operating margin compressed to 3.9% from 4.8% in the prior-year period, primarily due to expense deleverage on lower wholesale and Joybird delivered sales. Board Chair, President and CEO Melinda D. Whittington highlighted retail momentum, stating the segment continued to gain share and control the full end-to-end consumer experience.
For the second quarter, La-Z-Boy guided revenue to $500–$520 million, well below the $536.8 million consensus estimate. Adjusted operating margin is expected to range between 4.0% and 5.5%, reflecting investments in new stores, advertising, strategic pricing, and digital transformation.
Shareholder returns totaled $35 million in the quarter, including $25 million in share repurchases and $10 million in dividends, a 62% increase from the prior year. The company ended the period with $267 million in cash and no external debt.
