The head of La-Z-Boy who helped build the company from a single chair maker to a diversified furniture company during his 18 years as CEO, is stepping down.
Kurt L. Darrow, a 40-year employee of the Monroe, Michigan-based company, announced Tuesday he will become a non-executive chairman of the company and be succeeded as CEO by the company's chief financial officer, Melinda Whittington, effective April 25.
The announcement of Darrow's retirement and a drop in quarterly earnings reported after the market closed Tuesday initially sent shares of La-Z-Boy down by 6% in after-hours trading. Darrow said the pandemic continues to create some supply problems for the furniture maker, which is the biggest private employer in Rhea County where it employs nearly 1,500 workers making the company's signature recliners adjacent to the company's research and development center in Dayton, Tennessee.
La-Z-Boy, like many makers of home furnishings and furniture, has enjoyed stronger consumer demand during the pandemic. But COVID-19 shutdowns, illnesses and transit challenges have created some supply problems as well.
"Robust written trends continue across all La-Z-Boy Incorporated businesses as consumer demand for home furnishings remains unabated," Darrow said in his quarterly earnings report Tuesday. "However, delivered sales declined slightly versus last year's record third quarter due to greater-than-anticipated impacts from COVID-19 across our supply chain. We continue to add additional capacity to service our unprecedented order rate, with our supply chain team actively ramping production as quickly as possible to service customers while prioritizing the health and safety of employees."
The company reported Tuesday quarterly net income of $29.2 million, or 62 cents a share, compared with $34.5 million, or 74 cents a share, in the same quarter a year ago. Consolidated sales in the third quarter of the company's fiscal 2021 decreased 1.2% to $470.2 million, affected by temporary supply chain impacts from COVID-19.
Darrow said he expects stronger sales in 2021 than last year, at least for the next couple of quarters. Company directors approved a 7% increase in the dividend payment, boosting the company's dividend to 15 cents per share, payable March 15 to shareholders of record as of March 4.
"Given the continued temporary impacts of COVID-19 on the company's manufacturing facilities and broader supply chain, and comparing with a prior-year base period which included the month-long pandemic shutdown, La-Z-Boy now expects fiscal 2021 fourth-quarter consolidated sales growth of 34% to 39% versus the prior-year quarter, and consolidated non-GAAP operating margin at the lower end of the 9% to 11% range," Darrow said.
La-Z-Boy shares have gained 24.5% over the last 12 months, while the broader S&P 500 index is up 16% the past year.
— Compiled by Dave Flessner