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Category: Stock Market and La-Z-Boy
Date: 16 September 2019 Stock Price: $32.97 We take a look at the 1st quarter earnings release of their 2020 fiscal year of La-Z-Boy one of world's leading furniture producers including the famous La-Z-Boy reclining chair.
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About La-Z-Boy
La-Z-Boy Incorporated is one of the world’s leading residential furniture producers, marketing furniture for every room of the home. The La-Z-Boy Upholstery segment companies are England and La-Z-Boy. The Casegoods segment consists of three brands: American Drew®, Hammary®, and Kinca
id®. The company-owned Retail segment includes 155 of the 352 La-Z-Boy Furniture Galleries® stores. Joybird is an e-commerce retailer and manufacturer of upholstered furniture.
The corporation’s branded distribution network is dedicated to selling La-Z-Boy Incorporated products and brands, and includes 352 stand-alone La-Z-Boy Furniture Galleries® stores and 554 independent Comfort Studio® locations, in addition to in-store gallery programs for the company’s Kincaid and England operating units
id®. The company-owned Retail segment includes 155 of the 352 La-Z-Boy Furniture Galleries® stores. Joybird is an e-commerce retailer and manufacturer of upholstered furniture.
The corporation’s branded distribution network is dedicated to selling La-Z-Boy Incorporated products and brands, and includes 352 stand-alone La-Z-Boy Furniture Galleries® stores and 554 independent Comfort Studio® locations, in addition to in-store gallery programs for the company’s Kincaid and England operating units
Overview of La-Z-Boy's latest earnings report
The numbers we are interested in (for the quarter):
- Total revenue: $413.663 million (up from $384.695 million from the same quarter of the previous year)
- Revenues increased by 7.5% over the last 12 months
- Cost of Revenues: $245.921 million (up from $236.173 million for the same quarter of the previous year)
- Cost of revenues increased by 4.12% over the last 12 months
- Net income: $18.069 million (down from $18.303 million for the same quarter of the previous year)
- Diluted earnings per share: $0.38 (down from $0.39 for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 47.125 million (down from 47.161 million for the same quarter of the previous year)
- Cash and cash equivalents: $111.622 million
- Cash and cash equivalents per share: $2.36
- Cash and cash equivalents makes up 7.18% of La-Z-Boy's market capital
- Cash and cash equivalents makes up 8.19% of La-Z-Boy's total assets
- Receivables: $134.379 million
- Receivables makes up 9.86% of La-Z-Boy's total assets
- Receivables makes up 9.86% of La-Z-Boy's total assets
- Inventories: $197.701 million
- Inventories makes up 14.51% of La-Z-Boy's total assets
- Inventories makes up 14.51% of La-Z-Boy's total assets
- Stockholders equity: $698.138 million
- Stockholders equity per share: $14.81
- La-Z-Boy is trading at 2.26 times its stockholders equity
- Cash generated from operations: $19.340 million
- Cash generated from operations per share: $0.41
La-Z-Boy's management commentary on the results and earnings guidance
MONROE, Mich., Aug. 20, 2019 (GLOBE NEWSWIRE) -- La-Z-Boy Incorporated (NYSE: LZB) today reported its operating results for the fiscal 2020 first quarter ended July 27, 2019.
Kurt L. Darrow, Chairman, President and Chief Executive Officer of La-Z-Boy, said, “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 world-class supply chain. Our company-owned Retail segment delivered strong sales momentum and also nearly doubled operating profit. The broader La-Z-Boy Furniture Galleries® network posted increases in first-quarter written same-store sales on a one-, two-, and three-year basis. In addition, our wholesale Upholstery segment turned in a GAAP operating margin of 9.0%, even with sales challenged for our England subsidiary and international businesses.”
Outlook
Darrow concluded, “The home furnishings environment remains somewhat challenging amid tariff uncertainty and other geopolitical concerns. Against that backdrop, however, we continue to believe La-Z-Boy is competitively well positioned with a strong brand; multi-channel distribution, including a growing retail business; and a world-class supply chain, which we continue to work to optimize. Additionally, we are optimistic about the long-term growth prospects for Joybird as our eCommerce strategy and business continue to evolve. Our balance sheet remains healthy and we are making prudent investments to deliver long-term performance for all stakeholders.”
Kurt L. Darrow, Chairman, President and Chief Executive Officer of La-Z-Boy, said, “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 world-class supply chain. Our company-owned Retail segment delivered strong sales momentum and also nearly doubled operating profit. The broader La-Z-Boy Furniture Galleries® network posted increases in first-quarter written same-store sales on a one-, two-, and three-year basis. In addition, our wholesale Upholstery segment turned in a GAAP operating margin of 9.0%, even with sales challenged for our England subsidiary and international businesses.”
Outlook
Darrow concluded, “The home furnishings environment remains somewhat challenging amid tariff uncertainty and other geopolitical concerns. Against that backdrop, however, we continue to believe La-Z-Boy is competitively well positioned with a strong brand; multi-channel distribution, including a growing retail business; and a world-class supply chain, which we continue to work to optimize. Additionally, we are optimistic about the long-term growth prospects for Joybird as our eCommerce strategy and business continue to evolve. Our balance sheet remains healthy and we are making prudent investments to deliver long-term performance for all stakeholders.”
La-Z-Boy (NYSE: LZB) stock price history
The image below, obtained from Google, shows the stock price history of La-Z-Boy Inc (NYSE: LZB) for the last 5 years. And its been a pretty decent time of La-Z-Boy stockholders. 5 years ago the stock was trading at around $20.49 and its currently trading at 32.97. That's a very healthy 60.9% return provided to La-Z-Boy investors over the last 5 years. The stock is trading close to the midpoint between its 52 week high and 52 week low which to us is an indication that short term momentum and sentiment towards the stock is neutral.
Recent coverage of La-Z-Boy
The extract below shows recent coverage of La-Z-Boy as obtained from Zacks
Investors seek growth stocks to capitalize on above-average growth in financials that help these securities grab the market's attention and produce exceptional returns. But finding a growth stock that can live up to its true potential can be a tough task. That's because, these stocks usually carry above-average risk and volatility. In fact, betting on a stock for which the growth story is actually over or nearing its end could lead to significant loss.
However, the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects, makes it pretty easy to find cutting-edge growth stocks. La-Z-Boy (LZB - Free Report) is on the list of such stocks currently recommended by our proprietary system. In addition to a favorable Growth Score, it carries a top Zacks Rank. Research shows that stocks carrying the best growth features consistently beat the market. And returns are even better for stocks that possess the combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Read the full article here
Investors seek growth stocks to capitalize on above-average growth in financials that help these securities grab the market's attention and produce exceptional returns. But finding a growth stock that can live up to its true potential can be a tough task. That's because, these stocks usually carry above-average risk and volatility. In fact, betting on a stock for which the growth story is actually over or nearing its end could lead to significant loss.
However, the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects, makes it pretty easy to find cutting-edge growth stocks. La-Z-Boy (LZB - Free Report) is on the list of such stocks currently recommended by our proprietary system. In addition to a favorable Growth Score, it carries a top Zacks Rank. Research shows that stocks carrying the best growth features consistently beat the market. And returns are even better for stocks that possess the combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Read the full article here
La-Z-Boy (NYSE: LZB) latest stock valuation
So based on the earnings report of La-Z-Boy (NYSE: LZB) and their fiscal outlook provided for 2020 what do we value LZB stock at? Based on the earnings reported and the fiscal guidance provided our valuation model provides a target (full value) price for La-Z-Boy (LZB) at $26.30 a stock. We therefore feel that the stock is overvalued Long term fundamental or value investors should not be buying into LZB at its current price, but rather look to buy into the stock at 10% below our target (full value) price. So we suggest looking to buy at levels around $23.70 or below