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On Mar 22, 2013, Zacks Investment Research upgraded Lumber Liquidators Holdings Inc. (LL - Snapshot Report) to a Zacks Rank #1 (Strong Buy). Shares of this specialty retailer of hardwood flooring have amassed an impressive year-to-date return of 25%.

Why the Upgrade?

Lumber Liquidators has been witnessing rising earnings estimates owing to better-than-expected fourth-quarter 2012 results, on the back of strategic initiatives undertaken by management, which include augmenting its top-line performance, efficient merchandise planning and optimizing its supply chain.

The company declared impressive results on Feb 20, 2013, wherein earnings of 50 cents a share surpassed the Zacks Consensus Estimate of 42 cents by 19.1%, and rose 66.7% from the year-ago quarter.

Lumber Liquidators, which primarily competes with Lowe's Companies Inc. (LOW - Analyst Report) and The Home Depot Inc. (HD - Analyst Report), outperformed the Zacks Consensus Estimates in 4 straight quarters by an average of 29.7%. The long-term expected earnings growth rate for the stock is 15%.

Net sales jumped 20.8% over the prior-year quarter to $210.7 million, and came ahead of the Zacks Consensus Estimate of $197 million. Comparable-store sales grew 13.2%, supported by a 9.1% rise in the number of customers. Gross margin expanded 360 basis points to 39.1%, benefiting from lower product costs.

Buoyed by better-than-expected results, management now projects full-year 2013 net sales in the range of $885 million to $920 million. Comparable-store net sales are now expected to rise in the mid-single digits. Earnings are forecasted between $1.90 and $2.15 per share. Currently, Lumber Liquidators expects to open 25 to 35 new stores over the course of the year.

The Zacks Consensus Estimate for 2013 rose 7% to $2.15 per share over the last 60 days. For 2014, the Zacks Consensus Estimate advanced 4.9% over the same timeframe to $2.56 per share.

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