NEW YORK (TheStreet) -- Lumber Liquidators (LL - Get Report) stock is down 10.62% to $12.03 on heavy trading volume this morning after reporting a deeper-than-expected 2016 first quarter loss as concerns about the safety of its products persist.
Before the market open, the hardwood-flooring company reported a loss of $1.20 per share, much wider than the loss of 24 cents per share anticipated by analysts surveyed by Thomson Reuters.
Lumber Liquidators was negatively impacted by a 20% increase in overhead expenses as it took a $16 million charge related to its consolidated securities class action and a $13.5 million increase in legal and professional fees and related accruals.
The company has been contending with fallout from a report by CBS's "60 Minutes" alleging in March 2015 that Lumber Liquidators had sold Chinese laminate products with dangerously high levels of formaldehyde, which may cause cancer.
Revenue declined 10% year-over-year to $233.5 million, missing analysts' estimates for $237 million. Sales at stores open at least a year fell 13.9% during the most recent period, while analysts were anticipating a 12.6% decline.
"The company believes net sales were impacted by changes in our promotional strategy and continued negative consumer sentiment regarding us," due to the Chinese laminate products, according to a company statement.
Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D+.
Lumber Liquidators's weaknesses include its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.
You can view the full analysis from the report here: LL
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.