Goodbye 2007. We hardly knew ya. Already, fiscal year line-jumper La-Z-Boy (NYSE:LZB) has up and pushed into fiscal 2008. So, La-Z-Boy -- can you tell us what the future holds?

Naught good, I fear
For Q1 2008, La-Z-Boy reported a 13% decline in sales to $344.4 million, and a $0.17-per-share loss (including $0.04 worth of restructuring charges), in contrast to last year's $0.04-per-share profit. Why all the bad news? According to CEO Kurt Darrow, "ongoing challenging business conditions pervasive throughout the furniture industry ... made it difficult to absorb our current fixed costs."

And yet, no sooner had Darrow uttered these words than CEO Farooq Kathwari of La-Z-Boy rival Ethan Allen (NYSE:ETH) issued a press release acknowledging the "challenging" business conditions, but boasting that his firm posted same-store sales "modestly up in June and that modest positive trend has continued in July." (Don't you just hate it when one kid in class goes and blows the curve?) Also instructive: My Foolish colleague Timothy Otte recently explained that he thinks sales are bottoming next door at Haverty Furniture (NYSE:HVT).

Confusing the issue, however, we also have Home Depot (NYSE:HD) blaming the soft housing market for its recent problems, and predicting continued softness (depressing furniture sales).

There's furniture, and then there's furniture
Meanwhile, back at La-Z-Boy, upholstered furniture sales in particular bore the brunt of the "challenging" business conditions. Sales within this segment fell 14% year over year, and in confirmation of Darrow's observation about absorbing fixed costs, these fewer sales wrecked the segment's operating margins, which dropped 250 basis points to 3.5%. Taking this data, and wondering what it can tell us about the future, here's what I'm thinking now:

As you may recall, in February 2007, ex-Motley Fool Hidden Gems pick Hooker Furniture (NASDAQ:HOFT) took the Sam Moore upholstered furniture business off La-Z-Boy's hands. Initially, I thought this shifting of Sam Moore's sales from La-Z-Boy to Hooker might have accounted for the shortfall -- but after checking with La-Z-Boy, it seems this wasn't the case. Rather, La-Z-Boy had already adjusted last year's sales figures to account for Sam Moore's divestiture -- meaning that upholstered furniture sales really did suffer more than casegoods.

That could be good for Hooker -- if it means Hooker stole market share from La-Z-Boy. It could also be bad -- if it means that upholstered furniture sales have taken a hard hit across the industry. Personally, I'm guessing at the latter, but we'll have to wait until Hooker reports early next month to be sure.

What did we expect out of La-Z-Boy last quarter, and what did we get? Find out in:

La-Z-Boy is a Motley Fool Income Investor recommendation. Home Depot is a Motley Fool Inside Value selection. Both market-beating newsletters are available for a free 30-day trial.

Fool contributor Rich Smith does not own shares of any company named above. Why do we tell you this? Because The Motley Fool has a disclosure policy.