La-Z-Boy (NYSE:LZB) Shares Gap Down Following Weak Earnings

Key Points

• La-Z-Boy shares fell sharply, opening at $33.70 versus a prior close of $40.83 after the company reported weaker-than-expected results.
• Quarterly EPS was $0.43, below the $0.49 consensus, while revenue declined 3.4% year over year to $475.7 million, missing estimates of approximately $501.4 million. Second-quarter revenue guidance of $500 million to $520 million also trailed analyst expectations.
• Retail performance remained a bright spot, with written sales up 16% and written same-store sales up 3%; the company also declared a quarterly dividend of $0.242 per share, representing an annualized yield of about 2.7%.

La-Z-Boy Incorporated (NYSE:LZB - Get Free Report)'s stock price gapped down prior to trading on Wednesday following a weaker than expected earnings announcement. The stock had previously closed at $40.83, but opened at $33.70. La-Z-Boy shares last traded at $35.0410, with a volume of 315,833 shares.

The company reported $0.43 EPS for the quarter, missing the consensus estimate of $0.49 by ($0.06). The company had revenue of $475.69 million for the quarter, compared to analyst estimates of $501.44 million. La-Z-Boy had a return on equity of 11.97% and a net margin of 4.80%.The business's quarterly revenue was down 3.4% on a year-over-year basis. During the same quarter last year, the business posted $0.47 earnings per share.

La-Z-Boy Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Tuesday, September 15th. Shareholders of record on Thursday, September 3rd will be issued a dividend of $0.242 per share. This represents a $0.97 dividend on an annualized basis and a yield of 2.7%. The ex-dividend date is Thursday, September 3rd. La-Z-Boy's dividend payout ratio is 38.87%.

Key La-Z-Boy News

Here are the key news stories impacting La-Z-Boy this week:

• Positive Sentiment: Retail written sales increased 16%, written same-store sales rose 3%, and delivered retail sales climbed 10%. Retail operating margins also improved year over year. La-Z-Boy added four company-owned stores and agreed to acquire two additional independently operated stores. La-Z-Boy First Quarter Results
• Positive Sentiment: The company returned approximately $35 million to shareholders through dividends and share repurchases, while ending the quarter with $267.3 million in cash and no external debt. La-Z-Boy also declared a quarterly dividend of $0.242 per share, equivalent to an annualized yield of about 2.4%.
• Neutral Sentiment: Management is consolidating manufacturing capacity, having completed the closure of one plant and moved production into its U.S. network. The actions could improve efficiency over time but may create near-term restructuring and execution risks.
• Negative Sentiment: Fiscal first-quarter revenue fell 3% year over year to $475.7 million, well below analyst expectations near $501 million. Wholesale sales declined 9% following the divestiture of the wholesale casegoods business, offsetting retail growth.
• Negative Sentiment: Adjusted diluted EPS was $0.43, missing estimates of roughly $0.48–$0.49 and declining from $0.47 a year earlier. On a GAAP basis, La-Z-Boy posted a $2.3 million net loss, or $0.06 per share, compared with a profit in the prior-year quarter. La-Z-Boy Misses First Quarter Estimates
• Negative Sentiment: Second-quarter revenue guidance of $500 million to $520 million was below the approximately $537 million analyst consensus, reinforcing concerns that demand normalization will continue. The disappointing outlook prompted a sharp selloff, and one analyst characterized the shares as a “Hold” rather than a buying opportunity. La-Z-Boy Q1 Analysis

Analyst Ratings Changes

LZB has been the topic of several research reports. Wall Street Zen cut La-Z-Boy from a "buy" rating to a "hold" rating in a research note on Saturday, August 8th. Weiss Ratings raised shares of La-Z-Boy from a "hold (c+)" rating to a "buy (b-)" rating in a research report on Wednesday, July 1st. Four analysts have rated the stock with a Buy rating and one has assigned a Hold rating to the company's stock. According to data from MarketBeat, the company currently has a consensus rating of "Moderate Buy" and a consensus target price of $39.00.

Insider Activity at La-Z-Boy

In other news, SVP Michael Adam Leggett sold 9,000 shares of the company's stock in a transaction dated Wednesday, June 24th. The shares were sold at an average price of $41.66, for a total value of $374,940.00. Following the sale, the senior vice president directly owned 47,551 shares of the company's stock, valued at approximately $1,980,974.66. This represents a 15.91% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, insider Terrence James Linz sold 2,500 shares of the company's stock in a transaction dated Tuesday, June 30th. The shares were sold at an average price of $40.23, for a total transaction of $100,575.00. Following the completion of the sale, the insider directly owned 64,383 shares in the company, valued at approximately $2,590,128.09. The trade was a 3.74% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold 66,299 shares of company stock worth $2,677,491 over the last ninety days. Company insiders own 3.12% of the company's stock.

Institutional Trading of La-Z-Boy

Institutional investors and hedge funds have recently bought and sold shares of the business. Vanguard Group Inc. raised its position in shares of La-Z-Boy by 0.8% in the fourth quarter. Vanguard Group Inc. now owns 4,814,114 shares of the company's stock valued at $179,422,000 after purchasing an additional 38,513 shares during the period. M&T Bank Corp bought a new stake in shares of La-Z-Boy during the 4th quarter worth about $18,433,000. Sei Investments Co. boosted its holdings in shares of La-Z-Boy by 69.5% during the 1st quarter. Sei Investments Co. now owns 116,124 shares of the company's stock worth $3,732,000 after buying an additional 47,626 shares during the period. Pacer Advisors Inc. boosted its holdings in shares of La-Z-Boy by 49.5% during the 1st quarter. Pacer Advisors Inc. now owns 182,698 shares of the company's stock worth $5,872,000 after buying an additional 60,518 shares during the period. Finally, Empowered Funds LLC acquired a new position in La-Z-Boy in the 1st quarter valued at about $4,884,000. Institutional investors own 99.62% of the company's stock.

La-Z-Boy Trading Down 13.7%

The firm has a market cap of $1.41 billion, a price-to-earnings ratio of 14.27, a price-to-earnings-growth ratio of 1.28 and a beta of 1.27. The stock's 50 day moving average is $40.00 and its 200 day moving average is $36.91.

About La-Z-Boy

La-Z-Boy Incorporated NYSE: LZB is a leading U.S. manufacturer and marketer of residential furniture, best known for its upholstered recliners, sofas, stationary chairs and sleeper sofas. The company offers a broad range of products in both fabric and leather, complemented by occasional tables, desks, lamps and other home furnishings through its branded retail network.

Founded in 1927 by cousins Edward Knabusch and Edwin Shoemaker in Monroe, Michigan, La-Z-Boy pioneered the modern reclining chair.

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