-=Lumber Liquidators (LL) reported earnings on Wed 7 Aug 2019 (b/o)

Lumber Liquidators misses by $0.03, misses on revs; cuts FY19 outlook

Reports Q2 (Jun) earnings of $0.07 per share, excluding non-recurring items, $0.03 worse than the S&P Capital IQ Consensus of $0.10; revenues rose 1.8% year/year to $288.57 mln vs the $291.81 mln S&P Capital IQ Consensus.

"Despite delivering solid quarterly results and sequential improvement from the first quarter, as the second quarter progressed, customer traffic softened and that softness continued into July...This, in combination with the uncertain tariff environment, has tempered our near-term financial outlook. As always, we are monitoring broader industry demand, the competitive environment, and the hard-surface flooring consumer as moderating macroeconomic indicators and broad uncertainty created by tariffs across an array of products permeate the market.

Outlook (assumes the continuation of the current 25% tariff applicable to products imported from China for the balance of 2019)

• Total revenue growth percentage -- Low single digits (Previously saw Mid-single digits)
• Comparable store sales -- Approximately flat (Previously saw flat to low-single digit growth)
• Adjusted operating margin (a non-GAAP measure) -- 1.4% to 1.9% (Previously saw 1.9% to 2.4%)

Lumber Liquidators drops 15% to 11-year lows as tariffs weigh heavily on results, causing company to slash full year outlook

This morning, the company reported Q2 (Jun) earnings of $0.07 per share, excluding non-recurring items, $0.03 worse than the S&P Capital IQ Consensus of $0.10; revenues rose 1.8% year/year to $288.57 mln vs the $291.81 mln S&P Capital IQ Consensus. The company also cut its revenue, comps, and adj-operating margin guidance, assuming the continuation of the current 25% tariff applicable to products imported from China for the balance of the year.

"Results in the quarter were generally in line with our expectations and reflect our efforts to mitigate the impact of increased tariffs on our near-term financial performance while also positioning the company for long-term success. With the increase in tariffs, we continue to manage costs through diligent vendor negotiations, opportunistic alternative country sourcing, and ongoing supply chain optimization. We also selectively implemented retail price increases late in the quarter to further mitigate the impact of rising tariffs while, at the same time, ensuring we deliver a strong value proposition and remain competitive in this dynamic environment."

The company also pointed to softening customer traffic during the quarter, hampering progress made from Q1, which it said also extended into July:

• "Despite delivering solid quarterly results and sequential improvement from the first quarter, as the second quarter progressed, customer traffic softened and that softness continued into July...This, in combination with the uncertain tariff environment, has tempered our near-term financial outlook."

The company said it is actively executing a "deep dive" into its overall cost structure to identify near-term efficiency opportunities