La-Z-Boy Inc. (NYSE: LZB) managed to seriously disappoint with its earnings report. The furniture maker blamed the weather for its revenue shortfall of $353 million, against expectations of about $368 million. While weather was an issue earlier in the year, it is just a bit too late in the quarter to be blaming peoples’ lack of buying recliners because of the weather.
When you look at the quarter from a year earlier, the consolidated quarterly sales were up only 2.1%. The same-store sales for its La-Z-Boy Furniture Galleries segment were down 0.9%, but that was versus an 11.2% gain from a year ago.
La-Z-Boy’s balance sheet included $149.7 million in cash and cash equivalents, $44.7 million in investments to enhance returns on cash and $12.6 million in restricted cash. The company’s total debt stood at $7.8 million, and its debt to capital ratio was a low 1.4%.
One of the quotes for the year in general said:
Although sales in the upholstery segment were up slightly, we believe they were adversely impacted by weather issues beginning in the third quarter, affecting the written order rate, and extending into the fourth quarter, particularly in February.
On the retail segment, the company said:
During the fourth quarter, the majority of our retail growth stemmed from acquired stores. With the majority of our company-owned stores located in the Northeast and Midwest, weather issues impacted our sales performance. On slightly lower traffic and average ticket, our conversion was positive. The retail segment’s performance for the fourth quarter was further affected by costs associated with the acquired stores as well as expenses related to increased advertising and building maintenance, including snow removal costs.
La-Z-Boy shares were down 9.8% at $22.40 shortly after the open on Wednesday. Its 52-week range is $18.05 to $31.22, and the company’s market cap is just under $1.2 billion. The stock’s consensus price target from only five analysts was $31.90, although that is likely to come down in the coming days.