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La-Z-Boy Reports Fiscal 2016 Second-Quarter Results

The following excerpt is from the company's SEC filing.

Increases Earnings Per Share by 14%

MONROE, MI., November 17, 2015La-Z-Boy Incorporated (NYSE: LZB) today reported its operating results for the fiscal 2016 second quarter ended October 24, 2015.

Fiscal 2016 second-quarter highlights for continuing operations

The company reported earnings per diluted share of $0.41 from continuing operations attributable to La-Z-Boy Incorporated compared with $0.36 in the prior years second quarter, an increase of 14%;

Consolidated operating income for the fiscal 2016 second quarter increased 10.6% to $33.4 million, with consolidated operating margin in creasing to 8.7% from 8.3% in the fiscal 2015 second quarter;

Operating margin for the upholstery segment was 12.1% compared with 11.0% in last years second quarter;

Operating margin for the retail segment was 5.9% compared with 4.4% in last years second quarter;

Same-store written sales for the La-Z-Boy Furniture Galleries

store network increased 3.6%; and

The company increased its quarterly dividend 25%.

Sales for the fiscal 2016 second quarter were $382.9 million, up 4.7% compared with the prior years second quarter. The company reported income from continuing operations attributable to La-Z-Boy Incorporated of $21.0 million, or $0.41 per diluted share, versus $19.2 million, or $0.36 per diluted share, in last years second quarter.

Kurt L. Darrow, Chairman, President and Chief Executive Officer, of La-Z-Boy, said, For the quarter, we improved our overall performance and achieved a consolidated operating margin of 8.7%, driven primarily by efficiencies within our manufacturing facilities and supply chain, as well as strong retail execution. With sales trends accelerating throughout the period, we are pleased to enter the third quarter with momentum. As part of our multi-faceted growth strategy, during the period, we increased the size of our company-owned retail segment with the acquisition of 10 La-Z-Boy Furniture Galleries

stores from independent dealers. Additionally, three new stores were opened across the network as part of our 4-4-5 initiative. Simultaneously, we are working to expand our share of the stationary upholstery market and increase our business through distribution channels beyond the La-Z-Boy Furniture Galleries

store network. We are confident our growth initiatives coupled with a

continued focus on driving efficiencies throughout our operations will deliver improved performance across the entire enterprise.

Wholesale Segments

For the fiscal 2016 second quarter, sales in the companys upholstery segment increased 2.9% to $305.8 million versus the prior years second quarter. In the casegoods segment, sales for the fiscal 2016 second quarter were $28.2 million, down 2.3% from last years second quarter.

Darrow commented, We are beginning to see the benefits of the new ERP system in our La-Z-Boy branded facilities which helped us achieve a 12.1% operating margin in our upholstery segment. During the period, our performance was also fueled by efficiencies in our supply chain and solid sales and operating margin performance from England, Inc., our sister upholstery company. At the recent High Point Furniture Market, we expanded our Urban Attitudes collection and also offered power in several new styles. The Urban Attitudes collection and the power option have been strong performers over the past year.

Darrow added, Earlier this month, we launched our new web-site and eCommerce platform, which is designed to provide our consumers a best-in-class digital experience while driving more traffic to our site. In addition to offering a wealth of information to make both the on-line and in-store shopping process easier and faster, the site also provides inspirational design ideas, solutions and tools. While we believe most people still ultimately prefer a retail store experience so they are able to touch and feel the furniture and view our wide array of fabrics and leathers before making a purchase, a significant majority visit our desktop or mobile web-sites before or during their shopping...


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