Lumber Liquidators 4Q Losses Much Greater Than Expected

TOANO, Va. (AP) —

Lumber Liquidators swung to a fourth-quarter loss that was more than three times larger than expected as fallout over the safety of some of its products continues to rattle the embattled flooring manufacturer.

Its shares dropped more than 5 percent in midmorning trading Monday.

The Centers for Disease Control and Prevention said last week that people exposed to certain types of Lumber Liquidators’ laminate flooring were three times more likely to get cancer than the agency had previously predicted.

The company stopped selling the Chinese-made laminate floors in May, a few months after CBS reported that those floors contain high levels of formaldehyde. Lumber Liquidators also began providing customers with free air quality tests.

Lumber Liquidators agreed to pay more than $13 million earlier this month for illegally importing hardwood flooring after the company pleaded guilty to environmental crimes last year. Lumber Liquidators pleaded guilty to environmental crimes in October.

For the period ended Dec. 31, the hardwood flooring retailer lost $19.8 million, or 73 cents per share, which far exceeded the per-share loss of 23 cents that Wall Street had expected, according to a survey by Zacks Investment Research. The company last year earned $17.3 million, or 64 cents per share, during the same quarter.

Revenue came in at $234.8 million, also well below the $254.5 million analysts were expecting.

Sales at stores open at least a year dropped 17.2 percent. That’s a key gauge of a retailer’s health because it excludes the volatility associated with locations recently opened or closed.

The Toano, Virginia, company said Monday it believes sales continue to be hurt by questions about the quality of products imported from China.

For the full year, Lumber Liquidators Holdings Inc. lost $2.08 per share on revenue of $978.8 million.

The company also announced that Dennis Knowles will serve as chief operating officer, effective Tuesday. He will be responsible for the organization of Lumber Liquidators’ stores and related operations. Knowles recently served as chief store operations officer at Lowe’s Cos.

CEO Robert Lynch resigned in May and late last year, the company named Thomas Sullivan as acting CEO.

Lumber Liquidators shares dropped 64 cents, or 5.8 percent, to $10.47 in morning trading Monday. Its shares have dropped 80 percent in the last 12 months.

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