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%.
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.