TOANO, Va. — Lumber Liquidators second-quarter sales increased 4% to $175.5 million, up from $168.7 million in the same quarter last year.
But at comparable-stores decreased 7.9%, and net income decreased to $5.3 million in the second quarter, down from $9.1 million in the second quarter of the prior year.
CEO Jeffrey W. Griffiths stated: “Our second quarter net sales and earnings per diluted share were in-line with our revised expectations communicated earlier this month. As we previously reported, we believe value-conscious consumers became more price sensitive and cautious in their discretionary spending in the second quarter. However, our annual Big Sale drew a strong customer response due to the strength of our value proposition and targeted promotional pricing. We remain focused on further improving our operations and building a foundation for long-term success and believe that we are well positioned to continue our growth.”
Gross margin decreased from 34.7% in the second quarter of 2010 to 34.0% in the second quarter of 2011. High transportation costs, a greater proportion of net sales at promotional prices, and increased investment in international quality control procedures, were all cited as factors that negatively affected the gross margin for the second quarter, though these were said to have been partially offset by benefits from sourcing initiatives and net sales mix shifts.
Selling, general and administrative expenses for the second quarter of 2011 were $51.1 million, or 29.1% of net sales. This compares to $43.9 million, or 26.0% of net sales, for the second quarter of 2010.
The company outlook for 2011 includes an expectation of net sales for the full year in the range of $670 million to $700 million with third quarter net sales in the range of $165 million to $180 million, and fourth quarter net sales in the range of $170 million to $185 million.
Comparable-store net sales for the full year are expected to decrease in the low single digits with third quarter comparable store net sales ranging from a decrease of 1% to an increase of 8%, and fourth quarter comparable store net sales ranging from a decrease of 3% to an increase of 6%.