Lumber Liquidators share set to fall after earnings and sales fall below expectations

Lumber Liquidators Holdings Inc. LL shares,
-1.17%
were shown down more than 2% in pre-market trade on Wednesday, after the flooring retailer reported lower than expected third-quarter profits and sales, citing an “increasingly difficult” supply chain and an inflationary environment. Net income fell to $ 8.8 million, or 30 cents per share, from $ 15.5 million, or 53 cents per share, a year ago. Excluding one-time items, adjusted earnings per share fell to 29 cents from 67 cents, missing the FactSet EPS consensus of 30 cents. Sales were down 4.6% to $ 282.2 million, below the FactSet consensus of $ 289.0 million. Cost of sales fell 1.3%, lowering the gross margin to 37.3% from 39.4%. Same-store sales fell 4.5%, while the range of two estimates from analysts polled by FactSet was down 2.0% to 1.5%. “As expected, our sales to DIY customers have declined from last year, reflecting a shift in consumer spending towards other product and service categories, as well as some difficult comparisons with the nesting spending we have. views in the third quarter of 2020, ”said Executive Chef Charles Tyson. Looking ahead, the company said it expects higher costs of materials and transportation to weigh on gross margins in the fourth quarter and 2022, and will seek to offset those higher costs with pricing and promotion strategies. The stock has slipped 3.2% in the past three months while the S&P 500 SPX,
+ 0.37%
gained 4.7%.


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