La-Z-Boy posts wider loss, suspends forecasts

Business Materials 19 November 2008 03:23 (UTC +04:00)

La-Z-Boy Inc, the furniture maker and retailer, reported a wider quarterly loss on Tuesday and saw a decline in sales as cash-strapped consumers curb purchases, Reuters reported.

Citing an unstable economy, weak consumer confidence and the risk of a protracted recession, the company also said it will not issue yearly forecasts.

The Monroe, Michigan-based company reported its net loss grew to $53.7 million, or $1.04 per share, for the second quarter ended October 25, from $9.9 million, or 19 cents per share, a year earlier.

Excluding 78 cents in charges related to La-Z-Boy's deferred tax assets and restructuring, it had an adjusted loss of 26 cents per share. On that basis, analysts, on average, called for a profit of 1 cent, according to Reuters Estimates.

Net sales fell 9.2 percent to $331.9 million. Sales of upholstery were down 8.1 percent, while sales of wood furniture slid 17.7 percent. Retail sales declined 14.5 percent.

"Over the course of the quarter, we experienced a progressive decline in sales trends, particularly in October, as sales deteriorated in conjunction with the turmoil in the global financial and credit markets," Kurt Darrow, the president and chief executive, said in a statement.

"The instability that continues to define the overall macroeconomic environment points to the likelihood of a protracted recession," said Darrow.

The CEO said the company has stopped issuing annual forecasts due to the difficulty of tracking incoming order rates and falling consumer confidence.

Furniture sales have suffered as an economic crisis, housing slump and tighter lending standards led consumers to put off purchases.

The company said in a filing earlier this month it was cutting 850 jobs, or about 10 percent of its work force, closing up to 20 stores, and reducing capital spending in a bid to bring costs in line with sales.

Shares in La-Z-Boy closed up 49 cents to $4.95 on the New York Stock Exchange.