Please ensure Javascript is enabled for purposes of website accessibility

Why La-Z-Boy's Q1 2021 Earnings Beat Even the Most Optimistic Forecast

By Rhian Hunt - Aug 18, 2020 at 8:19PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It also posts a slight revenue miss, causing mixed trading after hours.

Famous recliner maker and manufacturer of other furniture La-Z-Boy (LZB 2.80%) posted its first quarter 2020 results today after market close. While its sales missed by approximately $4.5 million, coming in at $285.5 million rather than the consensus $290 million reported by FactSet, its adjusted earnings per share (EPS) registered at $0.18 per share, beating analyst consensus of a -$0.13 loss per share by $0.31.

The company's earnings outshone even the highest analyst estimate used to calculate the consensus average. Results were still down year over year because of coronavirus-related retail closures, with revenues down -31% compared to fiscal first quarter 2020. EPS, though better than expected, still declined -57%.

Quarterly results.

Image source: Getty Images.

Commenting on the results, CEO Kurt Darrow described sales patterns during the quarter as showing weakness in May because of stores closed by COVID-19, but "as retailers reopened, written orders rapidly accelerated in June and July, with consumers spending a higher percentage of discretionary dollars on home furnishings." Same-store sales were down -13% year over year in May, but rose by +30% and +32% in June and July respectively.

Back in early June, La-Z-Boy closed one of its upholstery plants and laid off 10% of its workforce to streamline operations. However, Darrow also noted in today's earnings report that following "temporary shutdowns for most of April, our plants have increased production weekly to meet demand, and are operating at about 90% of prior-year levels" and says the company is "cautiously optimistic as we head into the fall, based on current demand trends."

Traders seem undecided on their reaction to La-Z-Boy's latest results, with share prices see-sawing between +3% and -3% in after hours trading.

Rhian Hunt has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

La-Z-Boy Incorporated Stock Quote
La-Z-Boy Incorporated
$29.78 (2.80%) $0.81

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/14/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.