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La-Z-Boy Cuts Profit Forecast

The furniture maker's sales have been weak.


(LZB) - Get LaZBoy Incorporated Report

slashed its second-quarter earnings projection Thursday due to weaker-than-expected sales volume, particularly within its retail segment.

The furniture maker expects to earn 1 cent to 4 cents a share for the quarter ending Oct. 28, down from its earlier forecast of 11 cents to 15 cents a share. Analysts polled by Thomson First Call predict earnings of 12 cents a share.

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A year earlier, La-Z-Boy recorded a loss of 12 cents a share, including a 10-cent charge related to the closure of a Canadian upholstery plant.

"The weaker-than-anticipated retail environment during the summer period leads us to now expect year-over- year sales for the quarter to be essentially flat compared to our original expectation of a mid-single-digit increase," said President and CEO Kurt Darrow in a press release.

"Although we saw a pick-up in written sales over the Labor Day weekend, the momentum was brief and subsequent activity has been sporadic," he added.

The company said the lower-than-expected sales volume is hurting both its wholesale upholstery and casegoods business and its retail stores. The wholesale business, however, is showing improving margin trends, while the retail segment has a higher fixed-cost structure and thus is being especially hurt by the sales weakness.

Shares of La-Z-Boy recently tumbled $1.30, or 8.7%, to $13.70 in after-hours trading.