Key Takeaways
- La-Z-Boy shares jumped more than 9% in premarket trading on Tuesday after the furniture maker reported better-than-expected quarterly results and issued an upbeat outlook.
- CEO Melinda Whittington said that the company’s conversion rates were at all-time highs and average ticket and design sales were trending up for the year, even as the furniture industry faces challenges from high interest rates and as housing turnover sits near three-decade lows.
- Monitor the $41 level, an area on the chart where La-Z-Boy shares may encounter selling pressure near the top trendline of a rising wedge.
Shares in furniture maker La-Z-Boy (LZB) jumped more than 9% ahead of Tuesday’s opening bell after the company eased investors’ fears over slowing consumer spending and a sluggish housing market by announcing quarterly results and forward sales guidance that came in above analysts’ expectations.
For the quarter ending April 27, the Monroe, Michigan-based company posted adjusted earnings of 95 cents per share, handily topping the consensus estimate of 70 cents a share. Revenue in the period fell 1% to $554 million, but easily surpassed expectations of $516.4 million.
Turning to forward guidance, La-Z-Boy said it sees current-quarter net sales of $475 million to $495 million, with the $485 million midpoint of that forecast beating estimates of $476 million.
CEO Melinda Whittington said that the company’s conversion rates were at all-time highs and average ticket and design sales were trending up for the year, even as the furniture industry faces challenges from high interest rates and as housing turnover sits near three decade lows. Whittington added that she expects industry fundamentals to remain volatile in the near term but anticipates La-Z-Boy to outperform competitors and gain market share.
The company said it expects sales growth in fiscal 2025 to be driven by its Century Vision strategy, which includes the opening of 12 to 15 new La-Z-Boy Furniture Galleries stores, primarily in the second half of the year.
Monitor This Level Amid Earnings-Driven Buying
La-Z-Boy shares have traded within a broad rising wedge since early last year, with the 200-day moving average sitting just above the pattern’s lower trendline to provide additional support during pullbacks. Leading into the company’s quarterly results, the stock formed a piercing pattern near the wedge’s lower trendline on above-average volume, indicating a potential reversal back to the upside. Indeed, the shares sit positioned to open sharply higher on Tuesday morning.
Looking ahead, investors should monitor the $41 level, an area on the chart where the price may encounter selling pressure near the rising wedge’s top trendline. A volume-backed breakout above this key level could see an acceleration of the longer-term uptrend.
La-Z-Boy shares were up 9.1% at $37.20 about two hours before Tuesday’s opening bell.
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