La-Z-Boy Blames ‘Challenged Consumer’ as Shares Take a Tumble

The La-Z-Boy logo is displayed inside a La-Z-Boy Furniture Galleries store on Nov. 19, 2024, in Corte Madera, Calif. (Justin Sullivan/Getty Images)

Shares of the furniture company known for its comfy recliners took a dive Wednesday following a disappointing earnings report and cautious guidance for the coming quarter.

After falling short of analyst expectations on earnings per share, La-Z-Boy said “an increasingly challenged consumer” was putting pressure on its business. While it didn’t specify those challenges, high prices, a stagnant job market, and economic uncertainty has put a damper on discretionary purchases.

La-Z-Boy shares fell as much as 18% Wednesday before paring some of those losses. They were down 11.4% at $34.65 around midday and are off 20% year to date.

Earnings per share took the biggest hit, coming in at 47 cents, well below analyst estimates of 53 cents. By comparison, that figure was 62 cents a share during the same period last year. Revenue was $492.2 million, slightly above analyst estimates of $490.6 million but below last year’s $495.5 million.

For the coming quarter ending in October, La-Z-Boy is expecting sales of $510 million to $530 million, about flat compared with the same time last year and lower than pre-earnings consensus estimates among FactSet analysts of $532 million. CFO Taylor Luebke said the guidance reflects the company “pragmatically navigating a continued challenging consumer and macroeconomic environment.”

On the plus side, CEO Melinda Whittington noted in the Wednesday morning earnings call that La-Z-Boy isn’t as impacted by tariffs as some retailers because the “vast majority” of its product is made in North America. While unit sales to Canada are down because of its retaliatory tariffs of 25% on U.S. imports, higher pricing has offset that decline.

Improving industry trends, acquisition opportunities, and a strong balance sheet that “supports a positive long-term outlook despite near-term challenges” could also help La-Z-Boy going forward, KeyBanc analysts wrote in a research note Tuesday night after earnings came out.

Those silver linings weren’t enough to appease investors, however, who have pushed the stock price down to its lowest in more than a year.

Write to Anita Hamilton at anita.hamilton@barrons.com