The weaker-than-anticipated retail environment during what is historically the industry's slowest season leads us to now expect year-over-year sales for the quarter to be essentially flat
Kurt Darrow, President and CEO

La-Z-Boy announced today it now expects earnings per share for its first fiscal quarter ending July 30, 2005 to be in the range of $0.04 - $0.06 per diluted share. The previously announced range of diluted earnings per share was $0.10 - $0.14. During last year's first fiscal quarter, the company had a loss of $0.07 per fully diluted share, which included an after-tax restructuring charge of $0.12 per share.

La-Z-Boy President and CEO Kurt Darrow noted, "The weaker-than-anticipated retail environment during what is historically the industry's slowest season leads us to now expect year-over-year sales for the quarter to be essentially flat. Our reduction in earnings guidance is primarily due to greater-than- expected expenses and transition costs from the additional 21 company-owned La-Z-Boy Furniture Galleries(R) stores that we acquired in the fourth quarter of our fiscal year 2005. As previously mentioned, the operations we acquired were in need of a variety of changes, including information systems, personnel, management, physical infrastructure and some store relocations. While we are implementing the necessary corrective actions, lower retail sales volumes are amplifying these short-term increases in expense."

Darrow concluded, "Although the negative impact from company-owned retail in the quarter will be greater than we anticipated, we are pleased that our core upholstery and casegoods businesses are expected to show improving margin trends. These improvements are the direct result of the changes we have made in our casegoods business model and our focus on continuous process improvements across our entire enterprise." The company plans to report this year's fiscal first quarter operating results after the market close Monday, August 22, 2005 with its regular quarterly investor conference call the following morning, Tuesday, August 23, 2005 at 8:30 a.m. EDT.