Stanley Furniture Co. (NASDAQ:STLY)

CAPS Rating: 3 out of 5

Designer and manufacturer of residential wood furniture exclusively targeted at the upper-medium price range. The Company offers diversified product lines across all major style and product categories within this price range.


Player Avatar NetscribeRetail (91.76) Submitted: 11/20/2006 10:38:00 AM : Underperform Start Price: $21.56 STLY Score: +143.64

Stanley Furniture makes wood furniture that retails in the upper-medium price range, engages in the design, manufacturing, and distribution of residential wood furniture in the United States. The Company’s products include home and office furniture, as well as youth and infant furniture by brand “Young America” and “Young America baby”.

Sales for the quarter dipped 11.3% compared to a year ago, and expects to see no signs of upturns in the industry in near future, company expect that, it’s sales for the year will decline further by 7.65 % to 8.3% and it forecasts its EPS in the range of $0.13 to $0.16 which shows a drastic decline of approximately 65% compared to last year. Lack of volume and high raw material costs are viewed as major reasons for low margins. Stanley should effectively manage the variable cost component of their business, but due to high fixed costs structure, we anticipate continued margin pressures, until the demand side of the equation returns.

Overall performance for the year has been dull due to soft retail conditions. New home sales and existing home sales (which are the major drivers for the furniture industry) have also been showing a declining trend from past four quarters and these trends are expected to continue. Additionally, higher borrowing costs lead some consumers to pull back from big-ticket purchases. Given all these company would underperform.

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Member Avatar NetscribeRetail (91.76) Submitted: 4/24/2007 6:04:36 AM
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Stanley Furniture engages in the design, manufacturing, and distribution of wood furniture in the upper-medium price range. If one is to look around, other companies are busy winding up their factories and shifting their focus on imports, which enables them to gain some margin. Recent studies have estimated that the decline in new and existing home sales was of almost 10% in 2006, which has already led to about 100,000 job losses. It is also estimated that the full effect of this down turn is yet to be seen in 2007 with more job losses. Stanley definitely is not from the same school of thoughts. It manufactures around 67% of its products and imports only 33%.
Contradicting from the industry strategy Stanley believes that it will save time in delivery and inspection of the manufactured goods and thus maintain low inventory level. However, the company needs to put up an extra effort to maintain its inventory as its margins are decreasing due to the extra money spent for its restructuring plans and on high raw material cost.

Existing retail softness adds on to the problem and the effect is seen on the company’s declining result. Its quarterly sales declined due to lower unit volume resulting from continued weakness in demand, which is due to current industry conditions. The margins too declined due to the lower sales. Either can company put on some good strategy to fight back or can slog in this difficult market. Till then one sees not much growth for the company until the market settles down.

Member Avatar edsoldit (< 20) Submitted: 7/12/2008 7:32:36 PM
Recs: 0

Sometimes Nepetism gets what it deseves !! Sadly every suffers.

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