April 30, 2010 Consumer Goods
Stock Data Price (52 weeks) Symbol (Exchange) Beta Standard Error of Beta Shares Outstanding Average daily volume (3 month average) Current market cap Valuation (per share) DCF Analysis Comparables Analysis Target Price Current Price (as of 4/29/10) Summary Financials Revenue Net Income Operating Cash Flow Earnings/Diluted Share BUSINESS OVERVIEW La-Z-Boy Incorporated (LZB) is the most recognized name in the furniture industry. The Company manufactures, markets, imports, distributes and sells upholstery products and casegoods (wood) furniture. LZB operates in three segments—the Upholstery Group, the Casegoods Group and the Retail Group—and is the largest reclining-chair manufacturer in the world and one of North America’s largest manufacturers of upholstered furniture. According to the May, 2009 top 100 ranking by industry trade publication Fortune Today, the La-Z-Boy Furniture Galleries® network of stores comprises the industry’s largest single-branded upholstered furniture retailer in North America, as well as the third largest manufacturer/distributor of residential furniture, as measured by annual sales volume. The Covering Analyst: Adam Block Email: firstname.lastname@example.org
$1.81 – $15.46 LZB (NYSE) 2.05 .335 51.55 million 771,965 $748.96 million
17.17 17.31 17.24 14.01
Q3 Ended 1/23/10 305.09 million 10.97 million 22.69 million $0.21
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Company owns 68 La-Z-Boy Furniture Galleries® retail locations, plus another 222 La-Z-Boy Furniture Galleries® stores which are independently owned and operated. In addition, LZB supports certain independent dealers who cannot sufficiently carry out their business activities without the Company’s financial support. These dealers are referred to as Variable Interest Entities (VIE). Floral City Furniture was founded in 1927, incorporated in Michigan in 1941, and was renamed to La-Z-Boy Incorporated in 1996. The Company is based in Monroe, Michigan. BUSINESS MODEL AND REVENUE BREAKDOWN
In addition to the Furniture Galleries®, the Company also sells their products through proprietary distribution spaces called ComfortStudios, which are areas within a larger retailer that are dedicated to showcasing La-Z-Boy furniture. At the end of fiscal 2009, LZB had 466 ComfortStudios and they expect to open approximately 30 more during fiscal 2010. A few of La-Z-Boy’s smaller operating segments—Kincaid, England and Lea—also have similar in-store gallery spaces. The company’s principal operating segments are the Upholstery Group, the Casegoods Group, and the Retail Group.
Upholstery Group. In terms of revenue, the
Company’s largest segment is the Upholstery Group, which entails the manufacturing and sales of upholstered furniture to furniture retailers and proprietary stores. This group includes La-Z-Boy, the Company’s largest operating unit, as well as Bauhaus and England. Upholstered furniture includes recliners and motion furniture, sofas, loveseats, chairs, ottomans, sleeper sofas, sectionals and modulars.
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Casegoods Group. This group primarily markets and distributes manufactured or imported wood furniture to furniture retailers. Products include tables, chairs, entertainment centers, headboards, dressers, accent pieces and some coordinated upholstered...