Lumber Liquidators -15.5% AH on Q2/2014 warning

Lumber Liquidators (LL) reports Q2 sales of $263.1M (+2.3% Y/Y), and expects to report EPS of $0.59-$0.61. Those figures are well below a consensus of $303.2M and $0.90. Gross margin is expected to be down Y/Y.

The company now forecasts full-year sales of $1.05B-$1.1B and EPS of $2.65-$3.00, below a consensus of $1.16B and $3.34. Same-store sales are expected to be up by a low-single digit %, down from prior guidance of mid-to-high single-digit growth.

Same-store sales fell 7.1% Y/Y in Q2, much worse than Q1's 0.6% drop and a big reversal from last year's 14.9% growth. SG&A spend rose an estimated 9% Y/Y.

CEO Robert Lynch: "Customer traffic to our stores was significantly weaker than we expected, particularly in geographic areas severely impacted by the unusually harsh weather in the first quarter ... Our reduced customer traffic has coincided with certain weak macroeconomic trends related to residential remodeling, including existing home sales."

He adds LL now believes "the prolonged purchase cycle associated with our customers' discretionary, large-ticket home improvement projects is likely to be delayed for some customers into the fall flooring season, and for others, into spring of 2015."

Shares fell 8.1% in regular trading ahead of the warning.

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Comments (6)
  • june1234
    , contributor
    Comments (4408) | Send Message
    Same-store sales fell 7.1% Y/Y in Q2 (which ended June 30), busiest quarter of the year if you in their line of work
    9 Jul 2014, 05:00 PM Reply Like
  • Fanebrb
    , contributor
    Comments (664) | Send Message
    Does that put Lowes back on the front burner ?
    9 Jul 2014, 06:50 PM Reply Like
  • 911Slade
    , contributor
    Comments (134) | Send Message
    Nice, use that first quarter weather to cover such a big Q2 miss.


    He probably would sound more on top of things if he said that the economy is weak and LL executed poorly.


    Disclosure: no position in LL.
    9 Jul 2014, 06:52 PM Reply Like
  • Fanebrb
    , contributor
    Comments (664) | Send Message
    Only make $1+ billion this year. What a lousy stock.
    10 Jul 2014, 08:06 AM Reply Like
  • 911Slade
    , contributor
    Comments (134) | Send Message
    Make a billion? Revenues of a billion are not the same as profits of a billion. Moreover, trajectory matters, and this one is not good.
    10 Jul 2014, 08:06 PM Reply Like
  • Clayton Rulli
    , contributor
    Comments (3412) | Send Message
    2.65 EPS versus 2013 2.77, thats 4.5% growth. Even at 55/share, stock is still trading @ 20x PE the 2.65 EPS. Still room to fall further
    10 Jul 2014, 09:29 AM Reply Like
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