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Profit Lolls at La-Z-Boy

Earnings slip but surpass the company's guidance.
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(LZB) - Get La-Z-Boy Incorporated Report

posted a slight drop in fiscal third-quarter earnings as the furniture maker continued to grapple with slower sales, but the profit beat expectations.

La-Z-Boy's earnings for the quarter ended Jan. 28 slipped to $10.5 million, or 20 cents a share, from $11.1 million, or 21 cents a share, a year earlier. The earnings included 1 cent a share in restructuring costs.

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The earnings topped the company's own forecast as well as Wall Street's expectations. In November, La-Z-Boy forecast earnings of 13 cents to 17 cents a share, including the 1-cent restructuring charge. Analysts polled by Thomson First Call had an average estimate for earnings of 15 cents a share.

La-Z-Boy's sales, however, fell to $502.3 million from $507 million, shy of the company's forecast for flat year-over-year sales. Analysts expected sales of $503 million.

"Overall, we are encouraged with our results for the quarter, as they indicate that the execution of our strategy in our two largest business segments, upholstery and casegoods, is progressing with the acceleration and speed we expected," said President and Chief Executive Kurt Darrow in a press release.

La-Z-Boy, noting uncertainty about the overall economic environment, forecast flat fourth-quarter sales and earnings of 26 cents to 32 cents a share. Analysts target earnings of 31 cents a share and sales of $562 million. In last year's fourth quarter, the company earned 35 cents a share from continuing operations on sales of $565.6 million.

La-Z-Boy shares recently were up 24 cents, or 1.5%, to $16.50.