LL $77 to $56 (ouch) After the bell, Lumber Liquidators forecast Q2 earnings per share of 59c-61c, far short of the consensus estimate of 90c. Q2 sales came in at $263.1M, also well below estimates of $303.21M. Comparable store sales decreased 7.1% for the quarter, and the company expects gross margin in Q2 to contract year over year.
WHAT'S NOTABLE: Due to the weak Q2 performance, the company cut its FY14 EPS view to $2.65-$3.00 from $3.25-$3.60, versus consensus of $3.34. It also lowered its FY14 revenue outlook to $1.05B-$1.1B from $1.15B-$1.2B, versus consensus of $1.16B. It forecast comparable store net sales in the low single digits, either positive or negative, compared to its previous view of an increase ranging from mid to high single digits. It sees opening a total of 33 to 37 new store locations in the expanded showroom format, down from the previous view of 35 to 40. CEO Lynch said, "A number of the factors weighing on our second quarter results are likely to continue in the second half of 2014. While we believe the third quarter may be weaker than we originally anticipated, we have a strong sense of urgency and we expect to regain traction to deliver operating margin expansion in the second half and in coming years."
PRICE ACTION: In evening trading, Lumber Liquidators fell $13.52, or 19.2%, to $56.90 on heavy trading volume. OTHERS TO WATCH: Other companies in the flooring space include Tile Shop (TTS), down 5%, Home Depot (HD), down 1%, and Lowe's (LOW), down 1.8%. |
