La-Z-Boy Sales Lost in the Cushions: Fool by Numbers

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On Feb. 13, La-Z-Boy (NYSE: LZB) released third-quarter earnings for the period ended Jan. 27.

• Sales decreased by 9.6%. Upholstery sales fell 11.8%, casegoods sales declined 14.6%, and retail sales increased 6.4%.
• Gross profit margin increased by 2.2%, thanks to better merchandising and selling plans, and cost reduction.
• For Q4 2007, management expects sales to decline 8%-10% compared to last year's quarter. EPS should be in the range of $0.03-$0.07.

(Figures in millions, except per-share data)

Income Statement Highlights

	Q3 2007	Q3 2006	Change
Sales	$403.9	$446.6	(9.6%)
Net Profit*	$6.9	$10.0	(30.4%)
EPS	$0.13	$0.19	(31.6%)
Diluted Shares	51.6	51.9	(0.5%)

*Continuing operations

Get back to basics with a look at the income statement.

Margin Checkup

	Q3 2007	Q3 2006	Change*
Gross Margin	27.9%	25.7%	2.2
Operating Margin	2.3%	4.0%	(1.7)
Net Margin**	1.7%	2.2%	(0.5)

*Expressed in percentage points
**Continuing operations

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets	Q3 2007	Q3 2006	Change
Cash + ST Invest.	$17.5	$20.5	(14.7%)
Accounts Rec.	$217.1	$274.0	(20.8%)
Inventory	$214.2	$246.5	(13.1%)

Liabilities	Q3 2007	Q3 2006	Change
Accounts Payable	$60.2	$77.5	(22.3%)
Long-Term Debt	$147.1	$194.0	(24.2%)

Learn the ways of the balance sheet.

Cash Flow Highlights

	Q3 2007	Q3 2006	Change
Cash From Ops.	$28.9	$33.1	(12.5%)
Capital Expenditures	$6.0	$6.2	(3.4%)
Free Cash Flow	$22.9	$26.9	(14.6%)

Find out why Fools always follow the money.

Related Companies:

• Stanley Furniture (Nasdaq: STLY)
• Hooker Furniture (Nasdaq: HOFT)
• Furniture Brands International (NYSE: FBN)
• Select Comfort Corporation (Nasdaq: SCSS)
• Bassett Furniture Industries (Nasdaq: BSET)

Related Foolishness:

• La-Z-Boy Lags Behind
• A Prescient but La-Z-Boy
• Lifesaving La-Z-Boy?

La-Z-Boy is a Motley Fool Income Investor recommendation. For more on great stocks that pay sweet dividends and outperform the market, click here for you free 30-day trial.

Stanley Furniture, Select Comfort, and Hooker Furniture are Hidden Gems recommendations.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.