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La-Z-Boy Rises as Earnings Beat Expectations

La-Z-Boy stock rose on Wednesday after the furniture maker posted better-than-expected fiscal-second-quarter earnings.

Shares of La-Z-Boy  (LZB) - Get Free Report rose after the furniture maker posted fiscal-second-quarter earnings that beat analyst expectations.

Shares of the Monroe, Mich., company at last check rose 4.4% to $40.

Bloomberg reported the stock was the best performer among its peers.

The manufacturer and retailer of reclining chairs, sofas and other home furnishings posted net income of $34.9 million, or 76 cents a share, up 55% from $22.6 million, or 48 cents a share, in the year-earlier period.

Revenue for the quarter ended Oct. 24 rose 2.6% to $459.1 million from $447.2 million.

A survey of analysts by FactSet produced consensus estimates of GAAP earnings of 47 cents a share, or an adjusted 50 cents, on revenue of $433.7 million.

"For the quarter, we produced a double-digit consolidated operating margin, with all operating companies posting excellent results, including Joybird, which turned a profit for the first time," Kurt L. Darrow, chairman, president and chief executive, said in a statement.

Darrow added that orders are fueling an unprecedented backlog as consumers continue to allocate more discretionary spending to home furnishings.

"In this stronger-than-expected demand environment, our supply-chain team is demonstrating agility and flexibility to significantly increase production capacity on both an opportunistic and permanent basis," he said.

The company has leased a 200,000-square-foot upholstery plant in Mexico to better serve customers in the U.S. The new facility is expected to start production in December.

Darrow touted what he said was the company's solid cash generation, robust balance sheet, and prudent expense management. "We are confident we will continue to adeptly navigate the challenging covid-19 landscape," he said.

The company did not specify guidance due to the coronavirus pandemic. Darren said, however, that he was optimistic the company would deliver strong results in the second half of fiscal 2021.