Lumber Liquidators is crashing after earnings
(Libreshot)
Lumber Liquidators shares tumbled by more than 16% in early trading Wednesday after the company reported a big earnings miss in the first quarter.
The company posted a net loss on earnings per diluted share of 29 cents, versus expectations for a gain of 15 cents.
Legal expenses were a big drag on the company's quarterly results.
The company posted revenues of $260 million in the quarter, up 5.6% from the previous quarter and just higher than expectations of $259.2 million, according to Bloomberg.
Lumber Liquidators reported that same-store sales fell 1.8% compared with the prior year, adding that in March, same-store sales were down 17.8% because of a 6.5% decrease in the average sale and an 11.3% decrease in the number of customers invoiced.
CEO Robert M. Lynch said:
Taking care of our customers continues to be our top priority and we have dedicated resources toward that goal. Additionally during the quarter, we completed the transition and consolidation of our four existing East Coast distribution facilities into our new million square foot distribution center in Virginia, and we are now effectively serving our stores with that facility. Costs related to legal and professional fees and a regulatory accrual were significant in the first quarter, however, we are committed to addressing the challenges presented while maintaining our focus on our core business and value proposition."
The company did not provide an outlook for the full year.
Lumber Liquidators has been rattled by a March 1 investigation from CBS' "60 Minutes." The report indicated that the company's flooring sourced from China contained levels of formaldehyde that exceed those deemed safe by the California Air Resources Board (CARB).
But the company said "60 Minutes" used an improper test that is not vetted by regulators and produces results that may be inaccurate.
The Consumer Product Safety Commission is investigating Lumber Liquidators.
The company said it was aware of 103 class-action lawsuits that were filed since the "60 Minutes" episode aired.
In a separate filing, the company said the Department of Justice is now seeking criminal charges against it under the Lacey Act, related to its imported products.
The company also announced that Daniel Terrell, its chief financial officer, would be leaving on June 1. Terrell started as controller in November 2004 and has been CFO since October 2006.
Shares are down 49% year-to-date and 60% over the past 12 months.
Here's what the plunge over the past year looks like:
(Google Finance)
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