Lumber Liquidators’ net sales in 4Q/2016 was $244.9 million, an increase of 4.3 percent from 4Q/2015. The company opened three new stores during 4Q/2016. Gross margin was 32.9 percent in 4Q/2016, compared with 23 percent in the prior year period, according to a company press release.
Net loss for 4Q/2016 was $5.5 million, or a loss of $0.20 per diluted share, as compared to a net loss of $19.8 million, or $0.73 per diluted share, during the prior year period.
Dennis Knowles, CEO, commented, “We are pleased with our sales performance during the quarter, posting our second consecutive increase in comparable sales. While this represents a further step in the right direction, we remain focused on improving our business to drive long term value for Lumber Liquidators shareholders. Our recent investment in a broader, trend-right assortment supported by deeper inventory reflects our commitment to serve our customers. As part of our strategic direction, we invested in our store operations and the development of both installation and pro-customer programs.”
FY 2016 net sales decreased 1.9 percent to $960.6 million from $978.8 million in 2015. The Company opened nine new stores in 2016, and as of December 31, 2016, operated 383 stores in the United States and Canada.
Gross profit increased 9 percent to $303.9 million from $278.9 million in 2015. Net loss was $68.6 million, or $2.51 per diluted share in 2016 compared to a net loss of $56.4 million, or $2.08 per diluted share, in the prior year.
In February 2016, Virginia Hardwood Flooring Company Lumber Liquidators was fined US$13 million for illegal importation of hardwood flooring, much of which was manufactured in China from illegally logged timber from far eastern Russia, home of the endangered Siberian tigers and Amur leopards.It is the largest Lacey Act penalty ever, according to the US Department of Justice.
According to a joint statement of facts filed with the court, from 2010 to 2013, Lumber Liquidators repeatedly failed to follow its own internal procedures. Neither did it take action on imports from high risk countries, imports of high risk species, imports from suppliers who either falsified product information or were unable to provide documentation of legal harvest. On other occasions, Lumber Liquidators falsely reported the species or harvest country of timber when it was imported into the United States, the statement said.
The company was also called out on CBS News 60 Minutes for selling laminate flooring from China that had higher levels of formaldehyde emissions than allowed by law.