Stanley Furniture Misses Own Reduced Forecasts; Cuts Guidance


NEW YORK (AP) — Stanley Furniture Co. fell short of its own reduced expectations for third-quarter earnings and sales as the manufacturer suffered from deteriorating sales, lower margins and higher costs.

Late Monday, the Stanleytown, Va.-based company posted profit of 26 cents per share as sales fell 11 percent. Those results missed analysts’ forecasts, as well as the company’s own forecasts that were slashed substantially last month.

Stanley Furniture cut sales guidance for the year, citing “continued weakness in demand” and an “industrywide slowdown.”

“The residential furniture industry is struggling and management claims little visibility as to when it will improve,” said Raymond James analyst Budd Bugatch. Shares fell in after-hours trading Monday.

Bugatch said the market will probably respond negatively to the news because it missed the company’s reduced forecasts. But he thinks the company is well managed and is improving its business model, and he rates Stanley Furniture a “Strong Buy.”

“Our investment thesis is based on residential furniture stocks behaving favorably during periods when the Fed has stopped raising interest rates or when it begins to cut rates, an environment we believe we are currently seeing,” he wrote.