Shares of La-Z-Boy Incorporated (NYSE: LZB) surged 6.49% on Tuesday following the release of the company's second-quarter fiscal 2026 earnings report, which exceeded analyst expectations and outlined strategic growth initiatives. The furniture retailer delivered a strong performance despite challenging market conditions, instilling confidence in investors.
La-Z-Boy reported adjusted earnings per share of $0.71 for the quarter, significantly beating the analyst consensus estimate of $0.61. The company's sales for the quarter came in at $522.48 million, slightly above expectations of $522.41 million. While overall sales growth was modest at 0.3% year-over-year, La-Z-Boy managed to expand its margins and deliver solid profitability. The wholesale segment was particularly strong, with sales increasing 2% and adjusted operating margin improving to 8.1%, partly due to lower warranty expenses.
Investors were also encouraged by La-Z-Boy's outlook for the third quarter and strategic initiatives. The company expects Q3 sales to be in the range of $525-545 million, representing growth of 1-4% year-over-year. Additionally, La-Z-Boy announced the completion of a 15-store acquisition in the southeast U.S. region, adding an estimated $80 million in annual retail sales. The company also plans to optimize its portfolio by exiting non-core wholesale businesses and closing its U.K. manufacturing facility. These moves, along with a 10% increase in the quarterly dividend, signal management's confidence in the company's future growth prospects and financial health.
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