The Lazy Stock Sits Right Back Down
-By Griffin Addison | [email protected]
La-Z-Boy saw its stock get a 20% haircut today, as CEO Kurt L Darrow even admitted on the conference call that he was disappointed with the quarterly results.
"After a strong finish to fiscal 2017, we are disappointed with our start to this fiscal year" - Kurt L. Darrow, Chairman, President and CEO of La-Z-Boy
Despite the disappointment, the stock simply gave back all of its gains from its last quarter in June when the stock spiked 22% on positive earnings, essentially bringing it back down to where it was, as if nothing has happened.
Sales actually increased during the quarter, up to $357M from $340M a year ago. However the company says that much of the gain was related to "acquired sales" and did not add any volume to the company's operations. As a matter of fact, manufacturing volume has been very low which makes it difficult to make up for the large fixed costs that the company has.
La-Z-Boy cites that they have attempted to bolster their e-commerce side of the business to try and sell furniture online. The struggle that the firm is experiencing may be due in part to large online players like Amazon which are stealing business away from these smaller retailers and offering better value when it comes to selection, and shipping.
That said, La-Z-Boy stock is off about $10 from its all time high made less than a month ago of $34.10. Most of the value drop came from today's selloff, but the stock has certainly come a long way since it dipped before $1 during the 2008 recession and was forced to cut its dividend. The company has definitely seen a strong recovery, and still has flexibility to improve and streamline its manufacturing business to become leaner and more competitive.