La-Z-Boy (NYSE:LZB) shares jumped 20% after the Michigan-based furniture maker’s fiscal second quarter earnings topped Wall Street expectations.
The furniture company reported revenue of $522.5 million for the quarter ended October 25, slightly above analyst estimates of $516.5 million and essentially flat year-over-year.
Adjusted earnings per share came in at $0.71, surpassing the $0.54 consensus forecast.
The company’s results were driven by new store openings and operational efficiencies, offsetting pressures from a challenging macroeconomic environment.
The retailer’s recent strategic initiatives include expanding its company-owned store footprint, completing a 15-store acquisition in the southeastern US, and realigning corporate operations to focus on core businesses.
While some non-core segments are being exited, the moves are expected to improve overall margins by 75 to 100 basis points by the end of the fiscal year.
“Sales growth was modest, but we are investing in the business for the long term,” La-Z-Boy CEO Melinda Whittington said in a statement.
“Our Century Vision strategy to expand our retail store footprint and brand reach is working and positions us to disproportionately benefit when overall industry volumes rebound.”
The company also announced a 10% increase in its quarterly dividend to $0.242, marking the fifth consecutive year of double-digit dividend growth.
Looking ahead, La-Z-Boy expects fiscal third quarter revenue between $525 million and $545 million, reflecting year-over-year growth of 1% to 4%, with adjusted operating margins projected at 5% to 6.5%.