Lumber Liquidators Holdings Inc. (LL) has slashed its financial outlook for fiscal 2014, sending shares crashing almost 23% to the $55 level in Thursday morning trading.
The hardwood flooring retailer, which is the largest specialty retailer of hardwood flooring in North America, reported disappointing results and forecasts on Wednesday, saying it is cutting its EPS outlook for the year to a range of $2.65 to $3.00 a share on revenue of $1.05 billion to $1.10 billion, down from its previous guidance between $3.25 and $3.60 per diluted share on revenue of $1.15 billion to $1.20 billion.
Net sales for the second quarter ended June 30, 2014 came in only 2.3% higher from Q2’13 as the company opened 13 new stores. Meanwhile, same store sales actually fell 7.1% in comparison to an increase of 14.9% for the second quarter of the prior year.
“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,” said Lumber Liquidators Chief Executive Robert Lynch in a statement.”
“The improvement in customer demand we experienced beginning in mid-March did not carry into May, and June weakened further,” he said, adding that the co.’s “reduced customer traffic has coincided with certain weak macroeconomic trends related to residential remodeling, including existing home sales, which have generally been lower in 2014 than the corresponding periods in 2013.”
Lynch said he now believes “the prolonged purchase cycle associated with [Lumber Liquidators] 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 of LL hit an intraday low of $54.31 in Thursday morning trading. They’re now down nearly 46% year-to-date and 33% y/y.
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