Lumber Liquidators Rots

Who would have thought that being in the flooring business would be a bad thing during a housing depression? It seems like many were caught off-guard this morning when Lumber Liquidators LL cut its Q2 EPS and revenue numbers below consensus. Currently shares are off by 28.4%, trading at $18.45. Ouch. Lumber Liquidators said that it now sees Q2 EPS in the range of $0.18-0.20 on revenues of $168.7-175.5 million; the Street was at $0.31 per share on revenues of $187.97 million. For FY 2011 Lumber Liquidators sees EPS of $1.00-1.15 on revenues of $670-700 million; the Street was at $1.20 per share on revenues of $712.15 million. Jeffrey W. Griffiths, Chief Executive Officer, commented, "Our second quarter net sales were weaker than expected as we believe value-conscious consumers became more price sensitive and cautious in their discretionary spending. We had not anticipated the rapid softening in customer demand given the improved sales trends at the end of the first quarter.” “The pressures challenging large-ticket purchasing decisions may continue to be volatile into the second half of the year, potentially resulting in continued consumer caution. However, certain internal demand indicators such as catalog and sample requests remain positive in comparison to 2010, and we believe our store operations are more focused on, and more capable than ever of, converting early demand to open orders and ultimately invoiced sales." Lumber Liquidators Holdings, Inc. is a specialty retailer of hardwood flooring in the United States. As of December 31, 2010, the company sold its products through 223 Lumber Liquidators stores in 46 states. Lumber Liquidators and Bellawood are brands of the company.