Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of La-Z-Boy (NYSE:LZB) fell 10% today, after reporting earnings.
So what: Fiscal second quarter revenue rose 5%, to $322.3 million, which was just shy of the $325.4 million that analysts expected. Net income was only $6.6 million, or $0.12 per share, which fell well short of the $0.20 per share in earnings that analysts expected.
Now what: The revenue increase was encouraging, but spending on marketing, store openings, and incentives for employees ate into profits. Some of the spending is expected to be short term in nature, and profit should come back in the second half of the fiscal year. The company also brought a $0.04 per share dividend back, which is a strong sign for the future. The stock isn't terribly cheap at 14 times forward earnings, but a further pullback would be a nice entry point.
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