La-Z-Boy Eliminating 850 Jobs

Furniture maker will lay off 850 workers as it reported a widening loss in its fiscal second quarter, hurt by the economic slowdown and historically low customer confidence.

MONROE, Mich. (AP) -- La-Z-Boy Inc. said late Tuesday that it will lay off 850 workers as it reported a widening loss for its fiscal second quarter, hurt by a deteriorating economy and historically low customer confidence.

The furniture maker reported a net loss for the three months ended Oct. 25 of $53.7 million, or $1.04 per share, compared with a loss of $9.9 million, or 19 cents per share, in the year-ago period.

Excluding one-time charges, the company said it lost 26 cents per share, still well below average analyst expectations of a penny gain, according to Thomson Reuters. Analysts typically exclude one-time losses or gains from their projections.

The company said it will cut 850 workers, or about 10 percent of its work force, and expects between 15 and 20 dealer-owned stores to close in the next 90 to 120 days.

It won't be the first round of layoffs for the company, which like other furniture makers has been hit by the housing and credit slump as shoppers pull back from big-ticket items. In June the company said it was shuttering a plant in Utah, a closing that eliminated more than 600 jobs.

Revenue in the second quarter dropped to $331.9 million, down about 9 percent from $365.4 million last year but slightly above Wall Street expectations of $329.6 million.

"Over the course of the quarter, we experienced a progressive decline in sales trends, particularly in October, as sales deteriorated in conjunction with the turmoil in the global financial and credit markets," Kurt L. Darrow, the company's chief executive, said in a statement.

Darrow also said that in light of the poor economic environment, which points to the "likelihood of a protracted recession," the company was suspending its annual earnings guidance.

La-Z-Boy said the cuts will save the company $16 million to $20 million annually.

The company's shares closed up with the broader market in regular trading Tuesday, rising 49 cents, or about 11 percent, to $4.95.

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