COUNTERVAILING DUTIES BOLSTER LAY-Z-BOY EARNINGS

Larry Thomas — Furniture Today, June 20, 2012

MONROE, Mich. — La-Z-Boy said its sales slipped 3.4% in this year’s shorter fourth quarter, ended April 28, but net income nearly doubled to $19.6 million.

The bottom-line increase was attributed to more efficient operations in its upholstery segment and more than $16 million in antidumping duties.

This year’s fiscal fourth quarter was 13 weeks while last year’s was 14 weeks. The extra week added about 7% to the 2011 period’s sales, the company said.

Sales for the most recent 13-week quarter totaled $327.4 million. That was down from $338.9 million in the comparable quarter last year, which had 14 weeks.

Net income was $19.6 million or 37 cents per share. In last year’s fourth fiscal quarter, the figures were $10.3 million or 19 cents per share.

The company said the $16.3 million in antidumping duties were from money that had been withheld by the federal government pending resolution of a legal challenge by producers who didn’t support the original antidumping petition.

Upholstery sales totaled $266.9 million in the most recent quarter, an increase of about 1% from $264.8 million in the comparable quarter.

Case goods sales, meanwhile, fell 13.3% to $35.3 million, while sales at the 85 company-owned La-Z-Boy Furniture Galleries stores fell 4.7% to $55.6 million.

The retail segment, however, improved its operating performance for the 13th consecutive quarter, posting an operating loss of $1.1 million. In last year’s fourth fiscal quarter, the loss totaled $3 million.

For the fiscal year ended April 28, the segment’s operating loss totaled $7.8 million, down from $15.1 million the previous fiscal year.

“Our retail performance continues to improve, and we are moving steadily toward profitability in the segment,” said Kurt Darrow, chairman, president and CEO. “With a lean operating structure in place, volume and margin expansion are driving our performance.”

“Additionally, with a more qualified consumer entering our stores, our retail teams are utilizing established team selling processes, which drove an improvement in our close ratio and average ticket for the quarter,” Darrow said.

He said same-store written sales for all La-Z-Boy Furniture Galleries stores rose 10% in the fourth quarter and 9.4% for the fiscal year.

Companywide sales for the 52-week fiscal year totaled $1.23 billion, an increase of 3.8% from $1.19 billion in the previous 53-week fiscal year.

Full-year net income was $88 million or $1.64 per share. That’s up from $24 million or 45 cents per share the previous year.

The most recent year included $18 million in antidumping duties and an income tax benefit of $22.1 million from a reduction in valuation reserves.

As of April 28, there were 312 La-Z-Boy Furniture Galleries stores. The company said 10 to 15 stores will be opened, remodeled or relocated during the current fiscal year.

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