Shares of La-Z-Boy (NYSE: LZB) have simply exploded over the last few months. Talk about an incredible trade.

Well, it was an incredible trade for anyone brave enough to fool with a low-priced stock. La-Z-Boy closed on Monday at $3.64 per share. Back in March, the stock was under a buck. Can't say I'm sorry I didn't buy it. Well, let me amend that statement. I'm a little sorry I didn't buy it. But I think the reader knows what I mean: purchasing stocks under a dollar per share is dangerous work at best.

After a long six months of watching retail sales continue to slip, we get a bit of good news today, as January retail sales actually moved a bit higher.

Before today's announcement, analysts had been expecting that January would be the seventh straight month of falling retail sales, and the consensus was that we would see around 0.8% in the month. The good news is that retail sales were indeed higher in January, with a reported 1% jump during the month.

Paul B. Toms Jr., chairman, CEO and president of Hooker Furniture (NASDAQ: HOFT) gave a less-than-inspiring business outlook the other day in the company's press release announcing fiscal 2009 third-quarter results.

"Over the course of the last several months, the economy has worsened with continued business closings, cutbacks and layoffs across many industries, including the home furnishings industry. Consumer confidence levels are at historical lows. With continued instability in the real estate, financial and credit markets, prospects for a near-term economic recovery appear dim."

Toms believes that the consumer will stay on the sidelines until the real estate and financial markets stabilize and some improvement in credit availability and consumer confidence materializes, which could be another nine to 12 months.

Predictably the shares sold off following the news. After all, even if entertainment units, office, dining, bedroom, accent, occasional and leather upholstered furniture for the home are high on people's holiday wish list this year, these items are likely not within their financial reach.

But there's more to this story than meets the eye.

With people increasingly worried about the housing market and the credit crunch, it's not a surprise that many consumers are saving their money instead of buying furniture and investing in their houses. And given the current market conditions, it's no surprise that Swedish retail chain Ikea has seen its sales under pressure lately.

Anders Dahlvig, Ikea's chief executive, recently stated that the furniture retailer has been experiencing sales declines in some of its major markets, including Spain, Italy, and Germany. Moreover, the company expects the U.S. economic slowdown to affect other European markets as well. Both the global economic slowdown and higher energy and food prices have weighed on consumer confidence, contributing to the company's weak sales.

Even so, Ikea is not cancelling its expansion plans. The company believes that the weak market conditions lower not only its sales but also those of its rivals. "In bad times the competition is hurting as well and I feel it is an opportunity for Ikea," Dahlvig declared.

Human habitat designer Herman Miller, Inc. (Nasdaq: MLHR) recorded second quarter (2Q) fiscal year (FY) 2008 profits that beat the Street by $0.13 per share, enough to push the stock up to $32.96, up from a $28.42 close on December 19th. In short, all the incoming money numbers are up, and all the outgoing money numbers are down, just the way investors like it. Sales are up 1.4% to $505.9 million, while orders are up considerably more, 8.2% to $572.5 million. The backlog of orders also increased 7% to $346.5 million, so the company is looking towards at least several more highly profitable quarters based on current numbers.

Despite a rather soft economy in the U.S., orders increased 9%. International orders increased 12.7%. Herman Miller is still in the midst of a restructuring plan that, while obviously working, still entails significant expenditures: $5.2 million in 2Q FY2008. The company is very cognizant of the need to control costs and keep a lid on operating expenses, which declined almost 22% in 2Q. The only bump in the road is that the company took on $200 million in additional debt to pay for $200 million in stock repurchases.

Other big news is that Herman Miller recently agreed to acquire Brandrud Furniture Inc., a healthcare furnishing company. This move will allow Herman Miller to expand its healthcare products offerings. Management forecasts 3Q FY2008 sales to be in the $475-$500 million range, or EPS of $0.55-$0.62, surpassing the company's 2007 total revenue of $1.92 billion.

Furniture Brands-(NYSE:FBN) markets residential furniture through Broyhill Furniture, Lane Furniture, Thomasville Furniture and HDM Furniture. FBN is recently up $3.30 to $13.44 after Samson Holding reported a 14.9% stake in FBN. Samson has indicated it may seek to acquire control of the company. FBN reported June 2007 quarterly total revenue of $535 million. FBN will host an investor day on 10/23 in New York City. FBN October option implied volatility of 54 is above its 26-week average of 35 according to Track Data, suggesting larger price risk.

USG-(NYSE: USG), a manufacturer and distributor of building materials, is recently up $.57 to $38.14 on renewed & unconfirmed takeover chatter. Unconfirmed chatter is circulating today that a consortium of four of the largest Chinese construction companies wants to acquire a 24% stake in USG. China Overseas Land is one of the names mentioned in the consortium. Warren Buffet is an owner of approximately 19% of USG. USG October 40 calls have traded 72 times on transaction volume of 2,103 contracts above its open interest of 2,013 contracts. USG October option implied volatility of 42 is above its 26-week average of 32 according to Track Data suggesting larger price risk.
Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

MOST NOTEWORTHY: Tenet Healthcare Corp (THC), Furniture Brands International, Inc (FBN), Sepracor Inc (SEPR), ValueClick, Inc (VCLK) and Altria Group, Inc (MO) were today's noteworthy downgrades:

• Bear Stearns downgraded shares of Tenet Healthcare (NYSE: THC) to Underperform from Peer Peform citing difficulties in California and weak margins.

• Stifel downgraded Furniture Brands (NYSE: FBN) to Sell from Hold citing concerns regarding continued weakness in the housing industry.

• Summer Street downgraded Sepracor (NASDAQ: SEPR) to Sell from Neutral after the HCPCS website indicated Xopenex and Albuterol will have the same code as of July 1.The firm believes this eliminates the optimistic scenarios that Sepracor can garner a minimal-or-no-reimbursement cut.

• RBC downgraded shares of ValueClick (NASDAQ: VCLK) to Underperform from Sector Perform as the firm believes the FTC letter poses a risk to earnings and that the company is unlikely to be acquired.

• Matrix downgraded Altria Group (NYSE: MO) to Buy from Strong Buy to reflect decreasing cigarette sales and increasing valuation...

OTHER DOWNGRADES:

• American Technology cut Autodesk, Inc (NASDAQ: ADSK) to Neutral from Buy.

• Matrix downgraded Fluor Corp (NYSE: FLR) to Sell from Buy.

• Jackson Hewitt Tax Service (NYSE: JTX) was cut to Market Perform from Outperform at William Blair.

• Baird sent Alliance Data Systems Corp (NYSE: ADS) to Neutral from Outperform.

• Roth Capital downgraded shares of Sonic Solutions (NASDAQ: SNIC) to Hold from Buy.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).