By Christiana Sciaudone
Investing.com -- Americans are living life comfortably, helping La-Z-Boy shares jump 11% after the furniture maker gave strong guidance for upcoming quarters.
Sales in the fiscal fourth quarter are expected to jump 40% to 45% on record demand for recliners, driven by stay-at-home mandates as the country scrambles to stem the spread of Covid-19. Suddenly, a recliner seems like a brilliant idea, doesn't it?
Anyway, La-Z-Boy reported second fiscal 2021 quarter earnings per share of 82 cents, which was better than the expected 50 cents, while revenue of $459 million compared to the estimated $434 million.
Americans are also still spending at retailers including Target (NYSE:TGT) and TJX (NYSE:TJX), which are trading up 6% and 3%, respectively, after reporting better-than-expected earnings.
Target's earnings per share of $2.79 beat the expected $1.60 on sales of $22.63 billion, which were higher than the estimated $20.76 billion. Target said third quarter comparable sales grew almost 21%, and digital comparable sales were up 155%.
TJX reported EPS of 71 cents, higher than the estimated 40 cents. Sales of $10.12 billion beat the $9.37 billion expectation.
La-Z-Boy, which sells not only recliners but also pet beds, dining room sets and couches (who knew?), is expanding its manufacturing capacity in Mexico as it seeks to keep up with the sudden need Americans are feeling to invest in their homes.
"Demand across all La-Z-Boy Incorporated businesses is at record levels as consumers continue to allocate more discretionary spending to home furnishings," said La-Z-Boy Chief Executive Officer Kurt L. Darrow in a statement. "Orders are fueling an unprecedented backlog and our supply chain team is doing a great job to continually increase weekly production to service customers and drive increased delivered sales."
Darrow said he's optimistic that the company will deliver strong results in the second half of fiscal 2021 as it "significantly" increases production capacity. La-Z-Boy expects consolidated sales growth in the third quarter of flat to 4% above the prior year's record-high third quarter, and fiscal 2021 fourth quarter sales growth of 40% to 45% versus the prior-year quarter.
Lowe's (NYSE:LOW), however, failed to impress. Third-quarter same-store sales growth of more than 30% wasn't enough to counter higher costs.