Shares of La-Z-Boy Incorporated (NYSE:LZB) were up 19.4% as of 1:45 p.m. EDT Wednesday after the company announced stronger-than-expected fiscal fourth-quarter 2017 results.
Quarterly revenue declined 1% year over year, to $412.7 million -- though it's worth noting that last year's fourth quarter had an extra week that resulted in roughly $29 million of additional sales. Same-store sales for the La-Z-Boy Furniture Galleries network climbed 2.4%. On the bottom line, that translated to 26.7% growth in earnings per diluted share, to $0.57 -- well above the $0.46 per share Wall Street was modeling -- helped by higher operating margins in each of La-Z-Boy's upholstery, case goods, and retail segments.
La-Z-Boy chairman and CEO Kurt Darrow stated, "We delivered a strong finish to fiscal 2017 with our earnings performance demonstrating the increasing traction and momentum of our ongoing strategic initiatives and results of our ability to leverage operating platform efficiencies."
La-Z-Boy's board of directors also approved the repurchase of an additional 6 million shares under its existing share-repurchase authorization. As it stands, the total number of shares authorized under that program represent roughly 18% of La-Z-Boy's outstanding shares.
Darrow elaborated that the company is "solidly positioned in the marketplace with a core demographic that will continue to expand." But he also cautioned that the summer months are generally punctuated by weaker demand, resulting in the company's weakest performance of the year in terms of revenue and earnings.
Of course, that's no surprise to investors who follow the ebbs and flows of La-Z-boy's business. Given La-Z-Boy's relative outperformance when it counts and its generous capital-returns initiatives, I think the market is right to celebrate these results.