The Virginian-Pilot
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Shares in Lumber Liquidators plunged more than 13 percent Thursday, a day after the hardwood-floor retailer announced its third-quarter earnings fell 45 percent.
Lumber Liquidators, based in Toano, announced late Wednesday that its earnings dropped to $4.3 million, or 15 cents a share, in the third quarter. That's down from $7.8 million, or 28 cents a share, in 2009's third quarter.
Its stock lost $3.38 a share in New York Stock Exchange trading Thursday to close at $21.51 each. Analysts had been expecting earnings of 32 cents a share on revenue of $161.5 million, according to Thomson Reuters.
Instead, its sales grew only 4.7 percent year-over-year to $147.2 million in the three months ended Sept. 30. Lumber Liquidators said the growth came from newly opened stores because "same-store" sales, or sales at stores open at least a year, fell 5.7 percent in the quarter.
Lumber Liquidators attributed the drop in same-store sales to a decline in productivity related to the implementation of an integrated business management system that links its point-of-sale system with inventory control, warehouse management and merchandising. It estimates the transition, which occurred in August, cost it between $12 million and $14 million in sales.
"While we are confident that over the longer-term the implementation of our new SAP system will significantly benefit the business, our performance in the third quarter reflects declines in productivity both at the store-level and in the flow of product through our warehouse following implementation," Jeffrey W. Griffiths, Lumber Liquidators' president and CEO, said in a statement.
Productivity and sales are expected to increase as employees get more familiar with the system, Griffiths said. In October, for example, overall sales grew 14.5 percent and same-store sales rose 2.9 percent.
Lumber Liquidators estimated it would earn 21 to 27 cents a share on sales of $151 million to $157 million in the fourth quarter.
The retailer continues its national expansion, adding 10 new stores during the third quarter and planning to open about as many more by Dec. 31. It has more than 215 stores nationwide.
Chris Dinsmore, (757) 446-2271, chris.dinsmore@pilotonline.com
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complaints with Lumber liqidators
I wonder.....
...how much of these problems may have been caused by the cost of the lawsuit for copyright infringement and loss of revenue that LL filed against Floor Trader in 2009? Floor Trader, AKA, Stone Mountain Carpets and flooring, changed all their logos, sinage advertising, etc to resemble, VERY much, the ones in use by Lumber Liquidators...so much so that it was hard to distinguish between the stores by just driving by and glancing over. I myself made that error when I thought they had a store on Military Highway...much to my embarrassment, I was told about my error and got the story about the lawsuit. Had to have some impact on sales and other aspects of the business when its that easy to conduse them...
I'm jus' sayin'
opps!
Still a fine company in my opinion. Seems rather strange to me that that kind of sales drop would be due to a system "upgrade". They must have run out of inventory in their dc and/or stores. I'd think that that issue would have been anticipated and avoided but am no aware of their systems.