If asked about La-Z-Boy's
Well, the reality is that La-Z-Boy is like one of its jammed recliners. It's stuck in an awkward position and having a hard time getting back up. Cheap imports and low demand have hurt the company. Last night, La-Z-Boy posted a loss for its fiscal fourth quarter, with revenue growth coming in flat.
Furniture companies can pan out as cozy investments. Hooker Furniture
La-Z-Boy has done the noble thing by eating its own cooking, buying back 3.4 million shares in fiscal 2004. However, too much of a good thing can be a bad thing, as the company's debt has grown during the process. It may be time to put the spoon down before its balance sheet gets even worse.
And while the company has seen sales pick up, particularly in its upholstery division, its operating margins remain pitiful. Share buybacks are honorable, but sales and profits matter. Far from sitting pretty, La-Z-Boy has problems that may ultimately test its financial fortitude.
Longtime Fool contributor Rick Munarriz has been in a jammed recliner before, but he reckons it wasn't the quality handiwork of a La-Z-Boy. He does not own shares in any of the companies mentioned in this story.