Lumber Liquidators loss widens, sales tumble

Lumber Liquidators' net loss quadrupled in the first quarter, as the retailer suffered after regulators revealed that certain types of laminate flooring previously sold by the company had a greater cancer risk than once thought.

The company's net loss widened to $32.4 million from $7.8 million, in the year-ago quarter. On a per-share basis the company reported a loss of 29 cents, compared with a loss of $1.20.

S&P Global Market Intelligence had projected a net loss of $7.4 million and a per-share loss of 28 cents.

Sales at stores open at least a year — a figure typically used to gauge a retailer's health — fell 13.9%.

Lumber Liquidators stock (LL) tumbled 7.9% Monday to close at $12.89.

"The company believes net sales were impacted by changes in our promotional strategy and continued negative consumer sentiment regarding us, which was in part a result of heightened negative media coverage during the first quarter associated with certain Chinese laminate product that the company discontinued in May of last year," Lumber Liquidators said in a statement.

Total revenue fell 10.2% to $233.5 million. The average customer spent less at Lumber Liquidators during the period, as well, leading gross margin to slide from 35.2% to 32.6%.

The earnings report came after the Centers for Disease Control and Prevention reported in February that people who purchased the China-made laminate flooring were about three times more likely to get cancer than it had calculated earlier.

The CDC had said on Feb. 10 that formaldehyde levels in select versions of the company's laminate flooring could cause two to nine cancer cases per 100,000 people. The updated estimate was six to 30 cases per 100,000 people.

Lumber Liquidators discontinued sales of the product in spring 2015.

Follow Paste BN reporter Nathan Bomey on Twitter @NathanBomey.