- LL Flooring Holdings, Inc. LL reported a first-quarter FY23 sales decline of 13.7% year-on-year to $240.69 million, missing the consensus of $258.40 million. Comparable store sales decreased by 15.4% versus last year.
- Adjusted EPS loss of $(0.31) missed the consensus of $(0.15).
- Gross margin of 36.6% contracted 70 bps, driven by $2.1 million in incremental costs. SG&A as a percentage of net sales was 42%, an increase of 650 bps compared to 1Q22.
- Operating margin fell 730 bps to (5.5%), and the adjusted operating margin was (4.5%), down 620 bps.
- "As expected, the first quarter was very challenging and our performance reflected the impact the difficult macro backdrop had on discretionary home improvement spending. In addition, we continue to experience pressure from brand awareness and operational challenges that impacted first quarter results," commented President and Chief Executive Officer Charles Tyson.
- During the quarter, the company opened one new store, bringing the total stores to 443 as of March 31, 2023
- LL Flooring had liquidity of $157 million, consisting of cash and cash equivalents of $7 million, as of March 31, 2023.
- The company generated $26.15 million of cash flows from operating activities, compared to cash unlisted of $(23.4) million in 1Q22. Cash generation was primarily driven by sell-throughs of merchandise inventories rebuilt from the prior year's end and reduced inventory purchases.
- "As we look to the remainder of 2023, we expect the macro backdrop to remain challenging as elevated inflation and higher interest rates drive a more cautious consumer and pressure higher ticket discretionary purchases. We have also been impacted by the enforcement of the Uyghur Forced Labor Prevention Act ("UFLPA") as it relates to the importation of polyvinyl chloride (PVC) which is resulting in delays in receipt of certain vinyl flooring products," added Tyson.
- LL is not providing financial guidance at this time, citing uncertainty in the macroeconomic environment.
- LL Flooring sees FY23 capital expenditure of $15 million - $20 million. It expects to open three new stores in 2023.
- Price Action: LL shares traded lower by 16.05% at $2.98 on the last check Monday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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