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Lumber Liquidators (LL) Posts Narrower-than-Expected Q4 Loss

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Shares of Lumber Liquidators Holdings, Inc. (LL - Free Report) advanced more than 17% on Feb 21, after the company reported narrower-than-expected loss and robust revenues in the fourth quarter of 2016.

In the fourth quarter of 2016, the company posted a loss of 20 cents that fared better than the Zacks Consensus Estimate of a loss of 29 cents. In the fourth-quarter of 2015, the company’s losses were 73 cents per share. Notably, this is the first quarter in the past six quarters, where the company has reported narrower-than-expected loss.

Net sales rose 4.3% to $244.9 million and also surpassed the Zacks Consensus Estimate of $242 million. Comparable-store net sales increased 2.8% primarily owing to 3% surge in average sales marginally offset by a 0.2% dip in customers invoiced. However, non-comparable store sales increased $3.6 million in the prior-year quarter. Notably, the company’s revenues have beaten the Zacks Consensus Estimate for the second consecutive quarter. In the past six months, the company’s shares have gained 10.3%, outperforming the Zacks categorized Building Product-Retail/Wholesale industry which has increased 3.4%.

Selling, general and administrative (SG&A) expenses rose 4.9% to $89.7 million in the quarter, while SG&A expenses, as a percentage of sales, increased to 36.6% from 36.4%.

Gross margin for the quarter came in at 32.9% in comparison with 23% in the prior-year quarter. Sharp increase in gross margin can chiefly be attributed to prior-year decrease in the carrying value of the company's inventory of laminate flooring obtained from China, related moldings as well as due to other inventory adjustments and shifts in the mix of products.


Balance Sheet and Cash Flow

Lumber Liquidators Holdings, Inc Price, Consensus and EPS Surprise

 

Lumber Liquidators Holdings, Inc Price, Consensus and EPS Surprise | Lumber Liquidators Holdings, Inc Quote

Lumber Liquidators ended the quarter with cash and cash equivalents of $10.3 million compared with $26.7 million in the year-ago quarter. Merchandise inventories at the end of the quarter amounted to $301.9 million compared with $244.4 million at the end of the year-ago quarter.

Zacks Rank

Lumber Liquidators which shares space with Lowe's Companies, Inc. (LOW - Free Report) and The Home Depot, Inc. (HD - Free Report) currently carries a Zacks Rank #2 (Buy). Another favorably placed stock in this sector is Fastenal Company (FAST - Free Report) , which carries the same rank as Lumber Liquidators. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Fastenal’s shares have gained nearly 11% in the past three months. Further, the company has an impressive long-term earnings growth rate of 16.3%.

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