La-Z-Boy Incorporated (LZB) has reported 0.57 percent fall in profit for the quarter ended Oct. 29, 2016. The company has earned $20.83 million, or $0.42 a share in the quarter, compared with $20.95 million, or $0.41 a share for the same period last year.
Revenue during the quarter went down marginally by 1.65 percent to $376.58 million from $382.89 million in the previous year period. Gross margin for the quarter expanded 141 basis points over the previous year period to 39.49 percent. Total expenses were 91.19 percent of quarterly revenues, down from 91.28 percent for the same period last year. This has led to an improvement of 9 basis points in operating margin to 8.81 percent.
Operating income for the quarter was $33.17 million, compared with $33.39 million in the previous year period.
Kurt L. Darrow, Chairman, president and chief executive officer, of La-Z-Boy Incorporated, said, "While the consumer environment experienced weaker demand during the summer and early fall, macroeconomic indicators that generally bode well for discretionary spending and home furnishings remain positive."
Operating cash flow improves significantly
La-Z-Boy Incorporated has generated cash of $52.38 million from operating activities during the first half, up 141.12 percent or $30.66 million, when compared with the last year period.
The company has spent $34.15 million cash to meet investing activities during the first six months as against cash outgo of $22.31 million in the last year period. It has incurred net capital expenditure of $10.08 million on net basis during the first six months, down 12 percent or $1.38 million from year ago period.
The company has spent $24.87 million cash to carry out financing activities during the first six months as against cash outgo of $22.21 million in the last year period.
Cash and cash equivalents stood at $105.57 million as on Oct. 29, 2016, up 41.58 percent or $31 million from $74.57 million on Oct. 24, 2015.
Working capital increases marginally
La-Z-Boy Incorporated has recorded an increase in the working capital over the last year. It stood at $322.03 million as at Oct. 29, 2016, up 3.35 percent or $10.42 million from $311.60 million on Oct. 24, 2015. Current ratio was at 2.97 as on Oct. 29, 2016, up from 2.92 on Oct. 24, 2015.
Cash conversion cycle (CCC) has decreased to 52 days for the quarter from 86 days for the last year period. Days sales outstanding were almost stable at 34 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 37 days for the quarter compared with 69 days for the previous year period. At the same time, days payable outstanding went up to 19 days for the quarter from 18 for the same period last year.
Debt comes down significantly
La-Z-Boy Incorporated has recorded a decline in total debt over the last one year. It stood at $0.65 million as on Oct. 29, 2016, down 86.99 percent or $4.32 million from $4.97 million on Oct. 24, 2015. Total debt was 0.08 percent of total assets as on Oct. 29, 2016, compared with 0.63 percent on Oct. 24, 2015. Interest coverage ratio improved to 283.49 for the quarter from 251.08 for the same period last year.
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