Lumber Liquidators (LL) Tops Q1 EPS by 42c, Revenues Miss

Lumber Liquidators (NYSE: LL) reported Q1 EPS of $0.44, $0.42 better than the analyst estimate of $0.02. Revenue for the quarter came in at $267 million versus the consensus estimate of $272.21 million.

Business Update

"I would like to thank all of our associates for their committed service during these trying times, many of whom are making personal sacrifices to help our company weather the current COVID-19 crisis," said President and Chief Executive Officer Charles Tyson. "Despite experiencing the impact of COVID-19 late in the first quarter, we were extremely pleased with our performance. Comparable store sales were solidly positive for the majority of the quarter, we delivered significant gross margin growth and expenses were in line with expectations which led to strong first quarter operating income. We entered the year with a plan focused on our strategic pillars of improving our customer experience, driving traffic in our stores and online, and enhancing profitability. Our first quarter performance provides strong evidence of our transformational progress. Our store teams were engaged and delivering expert service, and we saw evidence that our new brand messaging, digital tools and promotional cadence are gaining traction."

"Beginning in early March, we started to see the impact of the COVID-19 pandemic, and our sales results slowed significantly as the month progressed," Tyson continued. "We have been focused on safely executing in the current environment and evolving our operating models to match market-by-market conditions while safely serving customers. As many as 56 of our stores were closed for a period of time while all other stores operated under reduced hours and/or warehouse-only conditions, offering curbside pickup and job site delivery for our Pros and DIY customers. Our teams have been leading with innovation and creativity to solve customers' problems while managing a safe work environment for our associates and customers. As of today, approximately 60% of our stores are fully operational, approximately 25% are scheduling appointments to allow customers to visit our showrooms, and approximately 15% are utilizing our warehouse-only model while less than 10 remain closed."

"In addition to evolving our operating models, we have taken steps to bolster liquidity by amending and increasing the size of our credit facility, reducing costs, managing inventory flow, deferring payments, and delaying or stopping non-critical capital projects including pausing the planned opening of certain new stores in the second half of the year," Tyson added. "These steps provide meaningful incremental liquidity to aid in weathering COVID-19-related challenges. While our near-term focus is on effectively navigating the current crisis, we are also continuing to invest in and execute our transformation plan to position us for a strong future."

2020 Outlook

As previously announced on April 20, 2020, the Company withdrew its annual financial guidance that was initially provided on February 25, 2020. The uncertainty surrounding the duration and extent of the COVID-19 crisis, including its impact on the Company, as well as its associates, customers and business partners, makes it uniquely challenging to accurately forecast future financial performance.

For earnings history and earnings-related data on Lumber Liquidators (LL) click here.

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