Lumber Liquidators (NYSE: LL), the largest specialty retailer of hardwood flooring in the U.S., today provided a business update for the second quarter ended June 30, 2011, and updated its outlook for 2011.
Net sales in the second quarter of 2011 are expected to increase approximately 4.0% to $175.5 million, from $168.7 million in the second quarter of 2010. At comparable stores, net sales are expected to decrease approximately 8.0% for the quarter, in comparison to an increase of 5.5% for the second quarter of the prior year. Net sales at non-comparable stores are expected to increase $20.1 million over the prior year period as the Company opened 11 new stores during the second quarter, and has opened 27 new stores in the first half of 2011.
The Company now anticipates second quarter 2011 earnings per diluted share will be in the range of $0.18 to $0.20, compared to earnings per diluted share of $0.32 in the second quarter of the prior year. In addition to the weaker than expected net sales, gross margin during the quarter was adversely impacted by greater promotional sales and higher transportation costs. Further, certain expenses as a percentage of net sales were higher than anticipated.
Jeffrey W. Griffiths, Chief Executive Officer, commented, “Our second quarter net sales were weaker than expected as we believe value-conscious consumers became more price sensitive and cautious in their discretionary spending. We had not anticipated the rapid softening in customer demand given the improved sales trends at the end of the first quarter. The pressures challenging large-ticket purchasing decisions may continue to be volatile into the second half of the year, potentially resulting in continued consumer caution. However, certain internal demand indicators such as catalog and sample requests remain positive in comparison to 2010, and we believe our store operations are more focused on, and more capable than ever of, converting early demand to open orders and ultimately invoiced sales.”
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