La-Z-Boy to close Redlands facility
Company to move production elsewhere
La-Z-Boy Inc. reported slimmer profits on stronger sales this spring, but the furniture maker still boosted sales 7.5% and beat analysts’ forecasts for profits in the second quarter.
La-Z-Boy said Tuesday it earned $18.1 million, or 38 cents per share, on revenues of $413.6 million in the three months ended June 30. A year ago in the same quarter, La-ZBoy earned 39 cents per share, but analysts had forecast earnings would total only 33 cents per share this year.
“Our results for the quarter demonstrate the strength of the La-Z-Boy brand within today’s challenging home furnishings environment, as well as the power of our worldclass supply chain,” said Kurt L. Darrow, chairman and chief executive of La-Z-Boy. “Our company-owned retail segment delivered strong sales momentum and also nearly doubled operating profit.”
Sales were still below expectations and La-Z-Boy is moving ahead with plans to shutter its plant in Redlands, California, idling 350 workers. The plant closing is being made as La-Z-Boy Inc., announced plans to further strengthen its supply chain manufacturing footprint.
The productions from the 200,000-square-foot Redlands plant will be moved to available capacity at its other North American facilities, including its Dayton, Tennessee, plant where the company has more than 1,300 employees and is the biggest manufacturing employer in Rhea County.
“We regret the impact these actions will have on those employees affected and will provide outplacement assistance during the transition period,” Darrow said. “However, after an in-depth review of our supply chain, due to ongoing productivity improvements, we determined these moves will further optimize our operations and strengthen our competitive positioning in the marketplace.”
The furniture company posted revenue of $413.6 million in the second quarter, falling short of Wall Street forecasts. Three analysts surveyed by Zacks expected $415.7 million.
La-Z-Boy shares have risen 10% since the beginning of the year.