Lumber Liquidators, Inc.

Lumber Liquidators, Inc. (LL - Snapshot Report) expects to open an additional 34 to 36 stores in 2009 despite the challenging retail environment. Analysts expect year over year earnings growth in 2009 of 15.37%.

Lumber Liquidators is the largest retailer of hardwood floor in the United States. The company operates 180 stores but has been quickly expanding. In the third quarter, Lumber Liquidators opened another 9 new stores.

On Nov 4, Lumber Liquidators reported its third quarter results which easily surprised on the Zacks Consensus Estimate by 21.74%. It was the fourth straight earnings surprise.

Earnings per share were 28 cents compared to 20 cents in the year ago quarter. Analysts had expected just 23 cents.

Sales jumped 14.2% to $140.5 million from $123.1 million in the third quarter of 2008. Comparable store sales bucked the negative retail trend by rising 1.9% compared to a decline of 1.8% in the second quarter of 2009. However it was slightly under the gain of 2.0% in the year ago period.

Gross margins increased to 36.4% from 35.3% in the prior year quarter due to lower transportation costs and management execution.

2009 Guidance Raised

Given the sales jump in the third quarter and the belief that the worst of the decline is now behind the industry, the company raised its full year sales range to $535 - $543 million from its previous range of $528 - $538 million.

The forecast for earnings per share also jumped to between 90 cents and 95 cents from 85 cents to 91 cents.

Zacks Consensus Estimates Rise

Covering analysts have been scrambling to move estimates in line with the company's revised earnings guidance. Full year Zacks Consensus Estimates jumped in the last week to the high end of the company's range, to 95 cents per share, from 90 cents.

2010 estimates also moved higher, with 8 out of 9 covering analysts raising by 6 cents to $1.11 per share. Analysts now expect earnings growth of 17.45% in 2010.

2-Year Chart

The stock has rallied since the March lows and has recently been trading at 52-week and all-time highs.