MONROE, MI — La-Z-Boy Inc. announced sales for the fiscal second quarter increased 5.0%, compared to the same period last year. Sales for the second quarter were $307.7 million, while the company reported net income of $7.9 million, compared with $3.9 million in 2011. The 2012 fiscal quarter ended Oct. 29, 2011.
La-Z-Boy Chairman, President and CEO Kurt L. Darrow said, "While macroeconomic headwinds continue to prevail, we are encouraged by our results and believe we are gaining market share, particularly in our upholstery segment. For the quarter, we experienced a sales increase in our upholstery and retail segments, improved our overall gross margin, increased same-store sales for the La-Z-Boy Furniture Galleries store network and recorded the 11th consecutive quarterly improvement in the operating performance of our retail segment compared with the prior year. We also more than doubled our consolidated operating profit compared with last year's second quarter."
Sales in the company's upholstery segment increased 7.3% to $241.4 million from $224.9 million in the prior year's second quarter. The operating margin for the quarter was 8.7% compared with 7.6% in last year's comparable quarter.
In the casegoods segment, sales for the fiscal 2012 second quarter were $35.9 million, down 9.0% from $39.5 million in the fiscal 2011 second quarter, but the segment's operating margin improved to 5.5% compared with 3.5% the year before.
"We were pleased with the performance of our upholstery segment during the quarter, particularly in terms of our ability to make an incrementally larger profit on the additional volume," Darrow said. "Our cellular operating platform provides for efficient production and our Mexico-based cut-and-sew center is delivering the cost savings we anticipated. We also believe our 'Live life comfortably' campaign, featuring Brooke Shields, is continuing to drive a more qualified consumer to our stores and dealer base, although the added spend for advertising this quarter impacted our operating margin as did higher raw material costs. Going forward, we believe the lean cost structure across all three companies within the upholstery segment, stylish and up-to-date product, and expansion plans for the La-Z-Boy Furniture Galleries store system position us well for the future."
Darrow added, "On the casegoods side of the business, although our volume declined 9.0% compared with last year's second quarter, the segment posted a solid operating margin, reflecting a combination of cost-containment measures, improved product margins and the price increase we implemented during the first quarter to offset material costs. While the wood furniture business remains more challenged than upholstery in this environment, we continue to refine our product assortment while maintaining our high level of service to position the segment for volume increases as consumers become more comfortable with larger ticket purchases."
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