The company said that it will voluntarily halt sales of the flooring made in China due to concerns that the flooring contains levels of formaldehyde that exceed California emission standards following a CBS '60 Minutes' segment about the flooring in March.
Lumber Liquidators said it sent about 26,000 testing kits to about 15,000 customers to test the levels of formaldehyde from early March to May 1. The company said that about 11,000 kits were returned, and 97% of the households with the Chinese-made flooring "indicated indoor air concentrations of formaldehyde that were within the guidelines set by the World Health Organization."
The company also announced that it brought in Freeh Group International Solutions, a company founded by former FBI director and federal judge Louis J. Freeh to help it review its sourcing and compliance policies.
TheStreet Ratings team rates LUMBER LIQUIDATORS HLDGS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate LUMBER LIQUIDATORS HLDGS INC (LL) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."