La-Z-Boy Reports $195,000 Loss

Posted by MCC on August 19th, 2010 at 07:00am

For the first fiscal quarter of the year La-Z-Boy reported a net loss of $195,000. The upholstery and case good manufacturer cited the rising costs of raw materials and shipping delays from Asia and Mexico. The disruptions in supply resulted in the largest impact hitting the upholstery segment which saw a margin slip to % percent.

“Our results for the quarter were impacted by a confluence of factors,” said Kurt Darrow, president and CEO. “These issues, including higher raw material costs, supply chain disruptions, storms which delayed shipping from our Mexico cut-and-sew operation and inefficiencies in Mexico as we transition all custom cut-and-sewn product from our U.S. operations, have abated somewhat and are not anticipated to impact our results throughout the remainder of the year to the extent they did this quarter.”

Darrow said that delays in shipping cut and sew kits to their U.S. factories from Mexico were caused by flooding from Hurrican Alex. To make matters worse, Asian suppliers were delayed in shipping fabrics. “Although there were many factors in the first quarter affecting our ability to run our operations with normal efficiencies, most of them are behind us,” Darrow said. “We are seeing an easing in raw material pricing and are in a better in-stock position with cover as the supply chain disruptions are being minimized.”

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