While the furniture sector isn't often remembered in times of crisis, famous recliner maker La-Z-Boy (NYSE: LZB) shows furniture can be a winning market during a pandemic. After the initial drop caused by the coronavirus' arrival in the U.S., the company has produced strong revenue and earnings growth, rewarded by a stock market eager for good news.
But alert investors in consumer discretionary stocks should look closer, examining what La-Z-Boy is doing to turn its current success into future expansion -- which, at this point, appears to be very little.
The pandemic struck during La-Z-Boy's fiscal fourth quarter 2020, which ended on April 25. The company took the brunt of COVID-19 during this quarter, though lockdowns continued into the early part of its fiscal first quarter 2021 and the virus' fallout is still affecting the economy.
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La-Z-Boy's Profits Are Comfy, but Investors Should Look for Expansion