What Happened?
Shares of furniture company La-Z-Boy (NYSE: LZB) jumped 18.9% in the afternoon session after the company reported third-quarter results that surpassed analyst expectations and provided a strong forecast for the upcoming quarter.
The company posted adjusted earnings of $0.71 per share, significantly higher than the consensus estimate of $0.54. Revenue for the quarter landed at $522.5 million. While this was flat year-over-year, it still beat expectations. Further boosting investor confidence, La-Z-Boy provided an optimistic outlook, guiding for fourth-quarter revenue of around $535 million, which was also above the consensus estimate. The strong earnings beat and positive guidance signaled to investors that the company is navigating the current economic environment effectively.
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What Is The Market Telling Us
La-Z-Boy’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. Moves this big are rare for La-Z-Boy and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock dropped 13% on the news that the company reported disappointing second-quarter results and issued a weak forecast for the upcoming quarter. The furniture maker's adjusted earnings per share of $0.47 missed Wall Street's expectations by nearly 11%. While its revenue of $492.2 million was in line with estimates, it remained flat compared to the same period last year, signaling stagnant sales. Adding to investor concerns, La-Z-Boy's revenue guidance for the third quarter also came in below analysts' projections. Profitability took a hit as well, with the company's operating margin declining to 4.5% from 6.5% a year ago, indicating that rising costs were squeezing profits. This combination of missed earnings, a weak outlook, and shrinking profitability prompted a significant sell-off in the stock.
La-Z-Boy is down 18.4% since the beginning of the year, and at $35.26 per share, it is trading 26.6% below its 52-week high of $48.02 from January 2025. Investors who bought $1,000 worth of La-Z-Boy’s shares 5 years ago would now be looking at an investment worth $888.49.
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