Despite an extremely difficult operating environment, La-Z-Boy Inc. (LZB) has reported 3 straight quarters of positive earnings surprises. The most recent of these reports was last week.

In response, analysts have revised earnings estimates higher in the past 7 days, while LZB finds itself on the Zacks #1 Rank Top Performers List for Monday with a gain of more than 7%.

Volume is at 733,000 shares, compared to the daily average of more than 927,000.

La-Z-Boy is, of course, part of the Furniture industry. It is 1 of 3 companies from this space on today’s Zacks #1 Rank List. The other 2 names are Select Comfort Corporation (SCSS), which was the Top Performer on Thursday, and Tempur-Pedic International Inc. (TPX).

Estimates for La-Z-Boy Up in Past Week

Analysts have responded positively to La-Z-Boy’s most recent quarterly report. All 3 covering analysts for this fiscal year, ending April 2010, have revised higher in the past week. The Zacks Consensus Estimate has, therefore, gained 13.2% in that time and now sits at 43 cents per share, compared to 38 cents previously.

The Zacks Consensus Estimate for next fiscal year, ending April 2011, has also improved in 7 days to 82 cents per share, marking a 6.5% advance from 77 cents. Two of 3 covering analysts contributed to this increase. The guidance also suggests profit growth of up to 91% over the previous year.

Fiscal Second Quarter

Excluding items, La-Z-Boy earned 12 cents per share in its fiscal second quarter, which is 20% better than the Zacks Consensus Estimate. It has put together an average surprise of 122% in the past 3 quarters, as the surprises for the fiscal first and fiscal fourth quarters were 183.3% and 163.6%, respectively.

The quarterly result also reversed a year-ago loss.

However, net sales still felt the impact of the tough macroeconomic environment and dropped 9.4% to $300.7 million.

La-Z-Boy is concerned about the overall environment and believes it is too early to predict a recovery for the industry, but it has made several moves to make its company more efficient at this uncooperative time. It is also keeping a close eye on its balance sheet.

“Today, La-Z-Boy Inc. is operating from a more competitive platform and, over the next 12 to 18 months, our operations will be further strengthened by previously announced projects under way,” said President/CEO of La-Z-Boy Kurt L. Darrow.

“Additionally, we are encouraged that despite lower volumes, our retail segment continues to make progress and has significantly reduced year-over-year losses for each of the last 4 quarters,” he continued.

Zacks Investment Research

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