Lumber Liquidators Holdings Inc (NYSE:LL) Earnings Disappoints

696
Lumber Liquidators Holdings Inc (NYSE:LL)

Lumber Liquidators Holdings Inc (NYSE:LL) disappointed investors as its loss for the fourth quarter was wider than expected amidst a significant drop in the revenues. The company’s results were unfavorably affected by allegations on the quality of its laminates that were sourced from China.

Click Here For More Market Exclusive Updates & Analysis

Q4 Loss

Lumber Liquidators suffered a net loss of $19.8 million or a loss of 73 cents a share in the fourth quarter. In comparison, the company earned a net income of $17.3 million or earnings of 64 cents a share in the same quarter last year. Though analysts predicted a loss, their estimation was only a loss of 20 cents a share. Performance fell short by a wide margin. Of course, in the previous four quarters, its negative surprise percentage ranged between 15.8% and 1,350%, making the company very volatile and unpredictable.

Lumber Liquidators’ net sales fell 13.7% to $234.8 million, which included a fall of 17.2% in comparable store sales. Street analysts expected revenue of $254.46 million for a 6.4% YoY fall. The company blamed the weak numbers on customers’ invoices, which witnessed a 15.6% drop, while average sales fell 1.6% in the comparable period. One bright spot is that the company unveiled five new stores in the fourth quarter. As a result, non-comparable store net sales advanced $9.6 million from the preceding year quarter.

Margins Under Pressure

Lumber Liquidators reported a gross margin of 23.0%, which was sharply down from 39.2% recorded in the preceding year. The company said that the fall was mainly due to a $22.2 million drop in the carrying value of its current inventory of laminate flooring, which was sourced from China.

While revenue dipped, Lumber Liquidators witnessed a 9.9% increase in selling, general and administrative expenses to $85.5 million. As a result, its percentage of total revenue increased to 36.4% from 28.6%. The company blamed it on some legal and professional expenses. The firm closed the quarter with cash and cash equivalents of $26.7 million.

An ad to help with our costs