Lumber Liquidators is hammered again
The CEO of Lumber Liquidators Holdings Inc. pledged to get the company back on track after a flooring scandal led to another decline in revenue for the company.
For the second quarter ended June 30, the company reported that revenue slid 5.8% to $247.9 million.Net loss was $20.3 million, or a loss of $0.75 per diluted share, in the second quarter of 2015 and net income was $16.6 million, or $0.60 per diluted share, in the second quarter of 2014.Net sales were $247.9 million, a decrease of 5.8% from the second quarter of 2014, including a same store store sales decline of 10% due to a 7.6% decrease in the number of customers invoiced and a 2.4% decrease in the average sale.
Thomas D. Sullivan, founder and acting CEO, said: "I founded Lumber Liquidators more than 20 years ago with the simple mission of offering good wood flooring at a good price and putting the customer first. We did this by getting great product, bringing it to the customer at a low cost and providing exceptional customer service. As we now endeavor to get the Company back on track, we are going to return to those principles that made us great. We're going to simplify the business, take care of our customers and deliver excellence at every level of the organization. Our results this quarter reflect the impact of challenges the Company has faced, particularly over the last several months. Our team is committed to leveraging and investing in our robust infrastructure, our strong brand and our long-term customer relationships. We believe that if we stay focused and do the simple things right, we can grow our business by re-establishing a solid foundation for our loyal customers, employees and shareholders."
The company said in a statement it believes net sales were negatively impacted by unfavorable allegations surrounding the product quality of its laminates sourced from China as well as its decision to suspend sales of such products, although a specific quantification of the impact was impracticable. The company implemented aggressive promotional pricing during the quarter, which it believes partially offset the decrease in the number of customers invoiced. Non-comparable store net sales increased $11.1 million over the prior year. The company opened seven new stores during the second quarter of 2015.
The company declined to provide afull year outlook, but did provide the following for the full year 2015:
The opening of a total of 20 to 25 new store locations in the expanded showroom format
The remodeling of a total of 10 to 15 existing stores in the expanded showroom format
Capital expenditures between $20 million and $25 million
Sullivan added: "As we work as a company to deliver on our value proposition, I appreciate the support of our hardworking employees and management team. As a team, we are committed to getting back to basics and passionate about strengthening Lumber Liquidators across every area of the organization."
