By Chelsey Dulaney
Lumber Liquidators Holdings Inc. said Wednesday that its sales
and margins will likely remain depressed in April, as it swung to a
first-quarter loss amid allegations that some of the company's
Chinese-made laminate-flooring products are unsafe.
Shares of Lumber Liquidators, down 49.6% this year, fell 4% in
premarket trading as the company also said it can't estimate a
full-year outlook.
In early March, CBS's "60 Minutes" alleged the company's
Chinese-made laminate flooring doesn't meet California's emissions
standards for levels of formaldehyde, a known carcinogen. The
report sent the company's stock tumbling and prompted an
investigation by the U.S. Consumer Product Safety Commission.
Overall, for the quarter ended March 31, Lumber Liquidators
reported a loss of $7.78 million, or 29 cents a share, compared
with a prior-year profit of $13.7 million, or 49 cents a share, a
year earlier.
Analysts polled by Thomson Reuters had forecast 15 cents a share
in earnings.
Lumber Liquidators said its gross margin fell to 35.2% from
41.1% a year ago, in part due to $2.3 million the company spent to
offer indoor air quality testing kits to customers. Gross margin
was also weighed by higher promotions in March as it sought to
drive traffic. The company had expected gross margin to fall to a
range of 35.5% to 36.5%.
Earlier this month, the company reported that its first-quarter
sales held up better than expected despite a 13% drop in March
after the segment aired.
The hardwood-flooring company said its same-store sales fell
1.8% in the quarter. The company had expected same-store sales to
be between the range of negative 4.4% and a gain of 0.5%. The
guidance came after the 60 Minutes report.
Total sales grew 5.6% to $260 million, in line with the
company's forecast of $253.6 million to $265.6 million. Strong
performances in January and February helped to offset weakness in
March, when comparable sales dropped 18%.
Through April 27, Lumber Liquidators said its sales have fallen
1.9%, while comparable-store sales are down 7.2% on a decline in
average sale and number of customers invoiced. It expects gross
margin for the month to come in at 31% to 32%, compared with 38.7%
a year ago.
The company added that its financial chief since 2006, Daniel
Terrell, will leave on June 1. The company named Gregory A.
Whirley, a 13-year veteran of Ernst & Young LLP, to the
position on the interim basis.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
Access Investor Kit for CBS Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US1248571036
Access Investor Kit for CBS Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US1248572026
Access Investor Kit for Lumber Liquidators Holdings, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US55003T1079
Subscribe to WSJ: http://online.wsj.com?mod=djnwires