La-Z-Boy Incorporated (NYSE:LZB) reported better-than-expected earnings for its fourth quarter, while sales missed estimates.
The furniture store chain revealed consolidated sales decreased 19.1% to $367.3 million, reflecting two months of dramatic temporary impact from the COVID-19 pandemic.
Net income attributable to La-Z-Boy Incorporated per diluted share ("EPS") was five cents versus three cents in the prior-year quarter. Cash generated from operating activities was $44.5 million. The company returned $14.5 million to shareholders through share purchases and dividends.
Consolidated GAAP operating margin decreased to 3.7% versus 8.2% in the prior-year quarter. Non-GAAP operating margin was 9.3% in the current-year quarter versus 8.6% in last year’s fourth quarter, reflecting increases in the Upholstery and Retail segments offset by a decline in the Casegoods segment. GAAP and Non-GAAP results for the fourth quarter include a 440-basis-point benefit related to a rebate of previously paid China tariffs, partially offset by higher bad debt expense.
According to CEO Kurt Darrow "La-Z-Boy delivered strong performance for 10 months of fiscal 2020 through February. The iconic La-Z-Boy brand, excellent Retail performance, great product introductions and supply chain strength translated to solid sales and earnings growth for those 10 months.
"Our fourth-quarter started with a 20.4% increase in written same-store sales for the entire La-Z-Boy Furniture Galleries® network in February, and we experienced other examples of strength across our vast network of distribution. However, the trajectory of sales and earnings growth for the last two months of the year were significantly impacted by COVID-19 and mandated retail closures across North America."
LZB shares inched up six cents to $27.81 early Wednesday morning.
