“We certainly have seen a nice pick-up across our other channels which have benefitted from that situation,” Armstrong Flooring CEO Don Maier told Yahoo Finance. “For us, when there’s times of uncertainty, consumers look for the most trusted brand. And Armstrong has the two most trusted and recognized brands in the flooring industry.”
Lumber Liquidators shares has been under pressure since the beginning of 2015, dropping after a 60 Minutes investigation into the company’s China-made products. In February, the Centers for Disease Control and Prevention (CDC) said the flooring has a greater risk of causing cancer or other health problems than previously believed.
It’s cheaper to source in the U.S.
Republican presidential candidate Donald Trump has rallied anger about increased outsourcing especially to countries like China. Much has been made particularly about unfavorable environmental impacts of low-cost sourcing in China.
But Armstrong Flooring doesn’t see outsourcing to China as a major source of cost savings.
“We have onshored almost all of our engineered wood production,” Maier said. “We’ve got a trend of bringing those jobs back to America.”
“We believe that gives us the best cost position,” he added.
Strong housing trends
Maier said his newly-focused company has benefitted from improving trends in the housing market. US housing starts have grown at a 9% compound annual growth rate (CAGR) from 2013 through 2015, existing home sales at a 2% CAGR and later-cycle non-residential construction at a 9% CAGR.
Maier sees the housing recovery continuing at a slow and steady pace.
“We’ve liked the trends we see,” he said. “We like the forward look as well.”
Maier added that improved confidence in the housing market and stabilizing prices have added the remodel business, which is the majority of the company’s sales.