La-Z-Boy stock drops after furniture maker reveals multiple supply-chain snags

Shares of La-Z-Boy Inc.
dropped more than 8% in the extended session Tuesday after the furniture maker reported mixed fiscal third-quarter results and detailed multiple COVID-19 snags that hindered production amid ongoing high demand for its furniture items, which include its well-known recliners. La-Z-Boy said it earned $28.5 million, or 65 cents a share, in the quarter, compared with $29.2 million, or 63 cents a share, in the year-ago quarter. Sales rose to $572 million from $470 million a year ago. Analysts polled by FactSet expected fiscal third-quarter earnings of 89 cents a share on sales of $570 million. “Demand continues unabated across the La-Z-Boy enterprise and remains well above pre-pandemic levels,” Chief Executive Melinda D. Whittington said in a statement. The quarter, however, “was marked by greater-than-expected supply-chain volatility, which had significant near-term impact on the efficiency of our manufacturing capacity ramp plans, dampening delivered sales growth and profit margins.” The company also faced shortages of component parts, “record levels” of COVID-related employee absences in January, and the “challenge” of hiring and training new employees at its plants. A 14-week COVID-related shutdown in Vietnam also “temporarily and dramatically impacted sales and profitability for our casegoods import business, with minimal product available to ship to customers and high freight costs,” the company said. La-Z-Boy stock ended the regular trading day up 2.7%.

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