NEW YORK (TheStreet) -- Shares of Lumber Liquidators Holdings Inc. (LL - Get Report) are plunging -15.65% to $59.17 in after-hours trading on Wednesday after it lowered guidance for the full year 2014, and said it now expects net sales in the range of $1.05 billion to $1.10 billion, down from its previous range of $1.15 billion to $1.20 billion.
It also lowered its fiscal year earnings per share estimate to a range of $2.65 to $3.00, from $3.25 to $3.60.
The retailer of hardwood flooring said,"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."
Separately The Street Ratings Team has this to say about their recommendation:
"We rate LUMBER LIQUIDATORS HLDGS INC (LL) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- LL's revenue growth has slightly outpaced the industry average of 1.4%. Since the same quarter one year prior, revenues slightly increased by 6.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Specialty Retail industry and the overall market, LUMBER LIQUIDATORS HLDGS INC's return on equity exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has significantly increased by 101.50% to $22.30 million when compared to the same quarter last year. In addition, LUMBER LIQUIDATORS HLDGS INC has also vastly surpassed the industry average cash flow growth rate of -3.80%.
- 41.12% is the gross profit margin for LUMBER LIQUIDATORS HLDGS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 5.56% trails the industry average.
- LL has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.72 is somewhat weak and could be cause for future problems.
- You can view the full analysis from the report here: LL Ratings Report