Stock of Lumber Liquidators Holdings Inc. (NYSE:LL) Trades Up After the Release of Preliminary Results


The first quarter fiscal year 2015’s results were discussed by Lumber Liquidators Holdings Inc. (NYSE:LL) at today’s press release. At yesterday’s trade the company’s stock went up to 7.24% and in today’s pre-market trade the stock rose to 4.88%.The company revealed that the total quarterly sales were $260 million resulting in a year-over-year rise of 5.6% from last year’s $246.29 million. The analysts’ prediction for the total sales remains at $258.2 million.

An analysis for the company’s monthly sales was held which indicated that sales of $89.4 million were seen in March which is 12.8% lower than the last year’s March sales. Lumber Liquidators Inc. (NYSE:LL) claimed that the reason behind the decline in sales was a result of the allegations that came from China in respect to the laminates.The allegations put forward in March also resulted in a shift in the company’s sales mix. During the initial two months of the quarter the total sales of the laminate declined and in March the sales went down from 21.2% to 16.4%.

Moreover an additional correspondence of the sales during the same time revealed that the share of cork, vinyl plank and bamboo declined by 120bps and the shares of solid and well engineered hardwoods increased by 470 bps.During the quarter the comparable sales declined 1.8%. This decline was followed by a 6.2% decrease in the average sales per buyer which however was compensated by the 4.4% rise in the number of buyers who invested in the company’s products.

March was yet again a disappointing month in respect to the month’s comparable sales which declined by 17.8%. This decrease was a result of a 6.5% decline in the average sales per customer and an 11.3% decline in the number of buyers who were invoiced.Lumber Liquidators Holdings Inc. (NYSE:LL) has predicted that the overall quarterly margin will be less than the last year’s quarterly margin. The company has predicted that the margin will contract from last year’s first quarter of 41.1% to 36.5% in this quarter.

The decrease in the margin can to some extent be associated with the further $1.5 million cost attached to the transportation that was obtained in regard to the transition as well as consolidation of the East Coast distribution center. Innovations in the sales mix, decline in prices in the month of March and the innovation in the company’s marketing proportion are some more reasons for the afore-mentioned decline. Some significant measures that were taken by the company during March include the opening of four stores as well as some customer-care initiatives that were introduced.

New quarterly results are supposed to be released before the opening of the market on April 29th and it is being anticipated that the company’s management will be conducting a conference call after the earning’s release. On the whole the Sell Side has maintained a neutral stance on the company’s stock.

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