Bear of the Day: La-Z-Boy (LZB)

La-Z-Boy LZB manufactures and sells residential furniture, best known for its iconic recliners and upholstered furniture offerings. Its products are sold through company-owned La-Z-Boy Furniture Galleries, independent dealers, and other retail channels.

The stock is a current Zacks Rank #5 (Strong Sell), reflecting a bearish shift in earnings expectations over recent months.

La-Z-Boy Posts Soft Results

LZB’s latest set of results came in below our expectations, posting adjusted earnings of $0.43 per share, reflecting a 10.4% miss relative to the Zacks Consensus Estimate and down 9% YoY. Sales of $476 million also missed our estimate by nearly 5%, falling 3% from the same period last year.

Its top line has remained rather stagnant over the past three years. 

LZB provided a somewhat soft sales outlook for the next period, also noting that investments in advertising, new stores, pricing initiatives, and its digital transformation are likely to weigh on profitability. Shares faced pressure following the release, now down nearly 15% overall over the past three months and erasing .

Bottom Line

Negative earnings estimate revisions and a soft sales outlook paint a challenging picture for the company’s shares in the near term.

La-Z-Boy LZB is a Zacks Rank #5 (Strong Sell), indicating that analysts have taken a bearish stance on the company’s earnings outlook.

For those seeking strong stocks, the best idea would be to focus on stocks with a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy) – these stocks sport a notably stronger earnings outlook paired with the potential to deliver explosive gains in the near term.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research