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Lumber Liquidators (NYSE: LL), the largest specialty retailer of hardwood flooring in the U.S., today announced financial results for the third quarter and nine months ended September 30, 2012, and raised its outlook for 2012.
Third Quarter Results
Net sales increased $32.3 million, or 18.8%, to $204.3 million in the third quarter of 2012 from $172.0 million in the third quarter of 2011. Comparable store net sales increased 12.0% for the quarter, driven by an 11.7% increase in the number of customers invoiced at these stores and a slight increase in the average sale. Non-comparable store net sales increased $11.7 million. The Company opened seven new stores during the third quarter.
Gross margin was 38.1% in the third quarter of 2012 compared to 35.6% in the third quarter of 2011. The increase in gross margin reflects generally lower costs of product due to both sourcing initiatives and sales mix, partially offset by higher net transportation costs.
Selling, general and administrative (SG&A) expenses decreased as a percentage of net sales to 28.0% for the third quarter of 2012 compared to 29.3% for the third quarter of 2011. Operating margin increased 380 basis points to 10.2% in the third quarter of 2012, from 6.4% in the third quarter of 2011.
Net income increased 91.3% to $12.9 million, or $0.46 per diluted share, in the third quarter of 2012 from $6.7 million, or $0.24 per diluted share, in the third quarter of the prior year.
Cash and cash equivalents at September 30, 2012 totaled $40.1 million, compared with $37.8 million at September 30, 2011 and $61.7 million at December 31, 2011.
Robert M. Lynch, President and Chief Executive Officer, commented, “Our team continued to generate consistent strength in our top line by broadening our advertising reach and frequency, expanding our merchandise assortment and driving effective store execution. As a result, we delivered record operating margin and EPS in the quarter. Our value proposition, combining price, selection, quality and availability with the expertise and service provided by our people, resonated with customers during the quarter as we continued to capture share in our fragmented market.”