La-Z-Boy Warns Again

La-Z-Boy ( LZB) warned again on its second quarter, saying it would "significantly" miss estimates because of an upholstery foam shortage.

The warning is the second in six weeks for the Monroe, Mich., chair maker. The company said Aug. 22 that it would miss Wall Street estimates because people who had been planning to buy recliners decided instead to buy cars.

On Tuesday, La-Z-Boy cited a notice from a supplier of polyurethane foam as well as "the continued soft retail environment and damage to one of its plants by a tornado spawned from Hurricane Rita." La-Z-Boy said the factors would hit earnings for the second quarter and beyond.

"We have been advised by one of our significant polyurethane suppliers to the La-Z-Boy branded product of their industry-wide notice of an allocation of 50% of normal polyurethane supply," CEO Kurt Darrow said. "This situation will have a greater impact on us relative to the rest of the furniture industry given the higher percentage of upholstery in our overall product mix."

The company also said its plywood parts cutting facility in Newton, Miss., which manufactures frame parts for La-Z-Boy Residential upholstery operations, sustained severe structural damage from a tornado related to Hurricane Rita.

La-Z-Boy shares were halted in late action Tuesday after posting a 12-cent advance to $13.30 during regular trading.

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