Upholstery manufacturer La-Z-Boy Incorporated has reported a decline in third quarter sales.
According to its latest trading update ended 27 January 2024, total sales fell 13% to $500.4m from $572.7m in 2023.
The prior period did benefit from “delivery of pandemic related backlog and 5% above the pre-pandemic third quarter of fiscal 2020,” the company said.
“Results were impacted by winter weather events in January, which caused temporary shutdowns of our U.S. manufacturing facilities, delivery delays, and reduced store traffic throughout much of the central U.S.”
Operating margin was 6.5% in the quarter, while net income stood at $28.6m, down 10% from $31.7m.
Melinda D. Whittington, President and Chief Executive Officer of La-Z-Boy Incorporated, said: “We remain optimistic about the mid-to-long-term growth potential for our industry, given structural housing shortages and the expectation of improvements in interest rates and housing affordability, and our ability to disproportionately grow with the consumer.
“In the near term, despite the furniture and home furnishings industry being in a sustained slowdown, our La-Z-Boy Furniture Galleries® network is executing well. Results in January, the third month of our quarter, were negatively impacted by winter weather events, which caused reduced store traffic throughout much of the central U.S. and delivery and production delays at our U.S.-based assembly facilities, the source of the majority of our customized upholstery finished product.
“After January’s weather disruptions, production and deliveries are now back to normal as we focus on servicing our customers and consumers with the high quality, comfortable products they expect from us.
“We continue to make progress on our Century Vision strategy, as we completed the acquisition of a six-store network in the Midwest, bringing the company-owned store network to 184 of the 353 total store network. Furthermore, we recently signed an agreement to acquire an additional two stores from an independent La-Z-Boy Furniture Galleries® dealer in the South.
“Our company-owned store base now represents 52% of our total network, compared to 32% a decade ago. While the market remains challenging and volatile, we are confident in our ability to leverage our strong financial position to outperform the market over the longer term.
“This includes expanding our La-Z-Boy brand reach with data-based consumer insights driving our marketing and product design, investing in our growing company-owned Retail store base, and increasing the agility of our supply chain. With our customized product primarily manufactured in the U.S., our vertically integrated model serves as a key differentiator in the industry.”
For the fourth quarter of fiscal 2024, La-Z-Boy expects to deliver sales to be in the range of $505-535 million and operating margin to be in the range of 7-8%.
