Anticipating a slight drop in second quarter sales, La-Z-Boy chief Kurt L. Darrow said the company is investing in its business, updating technology platforms and eyeing strategic acquisitions of independently owned stores to fuel long-term growth.

Sales for the fiscal 2017 first quarter were $340.8 million, compared with $341.4 million in the prior year’s first quarter. The company will release its financial results for the second quarter Nov. 30.

“In light of the weaker demand throughout the retail home furnishings sector, we anticipate sales for the fiscal 2017 second quarter to be 1 percent to 2.5 percent lower than last year’s second-quarter sales of $382.9 million,” said Darrow, chairman, president and CEO, prior to meetings with analysts during High Point Market. “Given our multiple strategic initiatives, we are confident in our ability to navigate through these current industry trends.”

Among those initiatives is the company’s 4-4-5 store growth strategy, which launched in 2014 with the goal of opening 400 company-owned stores, averaging $4 million in revenue per store, over a five-year period.

To date, there are 342 La-Z-Boy stores across North America, 127 of which are company-owned. It is projecting 350 stores by the end of its 2017 fiscal year, according to Kathy Liebmann, director of investor relations and corporate communications, and its goal is to increase its percentage of company-owned stores through the acquisition of independently-owned ones. Sales at existing stores have averaged $4 million annually and the ultimate objective is to have the store system generate $1.6 billion in sales, Liebmann said. The original five-year time frame will extend due to the challenging real estate market, she said. “We want to make good real estate decisions.”

Darrow said the company is looking into “targeted strategic acquisitions, enhanced marketing support, updated technology platforms and other capital projects” to enhance its competitiveness. “With a strong brand and our multichannel distribution system, our team is adapting our go-to market strategies within the current consumer environment while exploring additional growth initiatives for the future.”

(Source: hfndigital.com  Author: Allison Zisko)