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Lumber Liquidators Reports Its 10th Consecutive Quarter Of Negative Comps

A net loss of ($0.45) per share was $0.20 larger than expected, while revenue of $238.09 million, down 4 percent year-over-year, came in $2.43 million below the Street’s consensus. Comparable store sale tumbled 7.2 percent, and the number of transactions slipped 7.9 percent. However, the gross margin rate rose to 29.7 percent, from 25.1 percent posted in the same quarter last year.

Following these figures, SunTrust analysts Keith Hughes and Judy Merrick reiterated a Neutral rating and $10 price target. The experts noted that, while it's true the company has made substantial progress toward solving its legal troubles, it “has yet to find a bottom of sales declines, even on easier comparisons.” So, even though management said it was implementing a "bottoms up" recovery plan, Hughes and Merrick believe “something much more aggressive is needed.”

The report went on to highlight the fact this was the 10th straight quarter of negative comps, “notable more recently as the company anniversaries the negative impact of the 60 Minutes story.”

So, the company continues to look for a bottom, as management explores alternatives. Still, the firm remains in danger of becoming a “zombie company."

DateFirmActionFromTo
Jul 2016WedbushMaintainsNeutral
Jul 2016JefferiesMaintainsHold
Dec 2015Goldman SachsDowngradesNeutralSell

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