La-Z-Boy Incorporated (NYSE: LZB) reported a 96% dip in earnings for the fourth quarter of 2019 due to the termination of the defined benefit pension plan and purchase accounting charge. The results missed analysts’ expectations. The residential furniture maker remained cautious about the first quarter of 2020 due to the hangover of tariffs and geopolitical uncertainty. Following this, the stock dropped over 9% in the after-market session.
Net income attributable to the company plunged by 96% to $1.53 million or $0.03 per diluted share. Adjusted earnings decreased by 11% to $0.64 per share.
Consolidated sales increased by 8% to $453.8 million driven by strong Retail performance, which included the acquired Arizona-based La-Z-Boy Furniture Galleries stores, and the acquisition of Joybird.
Same-store sales for the company-owned Retail segment grew by 8% while written same-store sales for the 353-store La-Z-Boy Furniture Galleries network, including Canada, rose by 0.8%. Written same-store sales for the U.S. network of 318 stores rose by 2.5%.
Looking ahead, La-Z-Boy said the first calendar quarter was off to a slow start across the home furnishings industry and, with the hangover of tariffs and geopolitical uncertainty, it is unclear if these business conditions will continue further into its fiscal 2020 year. However, the company believes the performance of the La-Z-Boy Furniture Galleries store network and its Retail segment demonstrate the strength of the La-Z-Boy brand in this environment.
For the fourth quarter, sales decreased 1.2% in the Upholstery segment and 12.9% in the Casegoods segment. This is consistent with a slow start to the calendar year across the North America retail home furnishings landscape. Also, its Canadian business has been particularly challenged due to a variety of factors, including weakening exchange rates and the retaliatory tariff on finished goods coming from the US, which was lifted in May.
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However, sales in the Retail segment increased 24.9% on growth for the base stores and sales from recent acquisitions. On the core base of 139 stores included in last year’s fourth quarter, better execution at the store level drove a delivered same-store sales increase of 8.0%.
Shares of La-Z-Boy ended Tuesday’s regular session down 1.49% at $29.79 on the NYSE. The stock has fallen over 10% in the past year and over 11% in the past three months.