What Happened?
Shares of furniture company La-Z-Boy (NYSE: LZB) fell 2.7% in the afternoon session after the stock traded down in sympathy with competitor RH (RH), which reported weaker-than-expected results and lowered its guidance.
Shares of upscale furniture retailer RH fell after it posted second-quarter results that missed analyst expectations and trimmed its full-year sales forecast, citing the impact of tariffs and a weak housing market. Following the news, Telsey Advisory Group downgraded RH's stock. The negative sentiment surrounding RH's performance and outlook appears to be weighing on the broader furniture sector, impacting shares of companies like La-Z-Boy as investors grow concerned about industry-wide headwinds.
The shares closed the day at $33.68, down 3.8% from previous close.
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What Is The Market Telling Us
La-Z-Boy’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 21 days ago when the stock gained 3.7% after announcement by President Trump of a forthcoming tariff on imported furniture.
The proposed policy is seen as a significant advantage for La-Z-Boy, which, unlike many of its competitors, has a large manufacturing presence in the United States. While shares of rivals like RH, Wayfair, and Williams-Sonoma, who rely heavily on imports, declined on the news, investors appear confident that La-Z-Boy will be shielded from the potential tariffs. The policy aims to support U.S. manufacturing, and according to the announcement, a tariff investigation is set to be finalized in 50 days.
La-Z-Boy is down 22% since the beginning of the year, and at $33.69 per share, it is trading 29.8% below its 52-week high of $48.02 from January 2025. Investors who bought $1,000 worth of La-Z-Boy’s shares 5 years ago would now be looking at an investment worth $1,035.
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