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La-Z-Boy reports fiscal 2008 Q4 and full year results
26 Jun '08
5 min read
Darrow stated, “The success of the conversion of our La-Z-Boy branded facilities to the cellular production process is clearly evident in our results. On lower volume, we improved our operating margin year over year and, with the implementation of cellular now substantially completed, we anticipate our performance going forward will improve.
During the quarter, we announced plans to consolidate all cutting and sewing operations at our branded facilities, over a period of 18 to 24 months, and will move those operations to a new facility in Mexico. We also announced we would close our Tremonton, Utah facility this summer. The combined annual savings from these two initiatives are expected to be in excess of $25 million, with the full benefit beginning in fiscal 2011.”
For the fiscal 2008 fourth quarter, the La-Z-Boy Furniture Galleries store system, which includes both company-owned and independent-licensed stores, opened two new stores, relocated and/or remodeled two and closed three, bringing the total store count to 335, of which 216 are in the New Generation format.
For fiscal 2009, the network plans to open 10 New Generation format La-Z-Boy Furniture Galleries stores (seven new and three will be store remodels or relocations) and will close six. In the first quarter of fiscal 2009, the network plans to open one store, relocate or remodel two and close two.
System-wide, for the first four months of calendar 2008, including company-owned and independent-licensed stores, same-store written sales, which the company tracks as an indicator of retail activity, were down 5.7%. Total written sales, which include new stores, were down 5.2%.
Casegoods:
For the 2008 fourth quarter, casegoods sales were $48.8 million, down 24.3% from the prior year's fourth quarter and, as a result, the segment's quarterly operating margin decreased to 3.6%. Darrow commented, “With higher price points typically associated with casegoods collections, as compared to upholstery, our casegoods business continues to be impacted by the housing downturn, with consumers postponing purchases of larger sets of furniture for the dining room and bedroom.
In the meantime, our team remains focused on new product development, with unique attributes, to appeal to a wider range of customers. Importantly, we continue to align our cost structure with the current level of business."
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During the quarter, we announced plans to consolidate all cutting and sewing operations at our branded facilities, over a period of 18 to 24 months, and will move those operations to a new facility in Mexico. We also announced we would close our Tremonton, Utah facility this summer. The combined annual savings from these two initiatives are expected to be in excess of $25 million, with the full benefit beginning in fiscal 2011.”
For the fiscal 2008 fourth quarter, the La-Z-Boy Furniture Galleries store system, which includes both company-owned and independent-licensed stores, opened two new stores, relocated and/or remodeled two and closed three, bringing the total store count to 335, of which 216 are in the New Generation format.
For fiscal 2009, the network plans to open 10 New Generation format La-Z-Boy Furniture Galleries stores (seven new and three will be store remodels or relocations) and will close six. In the first quarter of fiscal 2009, the network plans to open one store, relocate or remodel two and close two.
System-wide, for the first four months of calendar 2008, including company-owned and independent-licensed stores, same-store written sales, which the company tracks as an indicator of retail activity, were down 5.7%. Total written sales, which include new stores, were down 5.2%.
Casegoods:
For the 2008 fourth quarter, casegoods sales were $48.8 million, down 24.3% from the prior year's fourth quarter and, as a result, the segment's quarterly operating margin decreased to 3.6%. Darrow commented, “With higher price points typically associated with casegoods collections, as compared to upholstery, our casegoods business continues to be impacted by the housing downturn, with consumers postponing purchases of larger sets of furniture for the dining room and bedroom.
In the meantime, our team remains focused on new product development, with unique attributes, to appeal to a wider range of customers. Importantly, we continue to align our cost structure with the current level of business."
Click here to view more:
La-Z-Boy Incorporated
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