Lumber Liquidators said its first-quarter sales were better than it expected despite the company’s stock and reputation woes that began in early March after a “60 Minutes” episode claimed the retailer’s Chinese-made laminate flooring contained excessive levels of formaldehyde.
Net sales in the first quarter of 2015 were $260 million, an increase of 5.6 percent from the same period in 2014, but comparable store net sales decreased 1.8 percent year-over-year.
In a business update released after the “60 Minutes” report aired, Lumber Liquidators had predicted its net sales would be in the range of $253.6 million to $265.6 million. Analysts surveyed by Thomson Reuters expected $256.8 million in sales, according to the Wall Street Journal.
Net sales in March decreased 12.8 percent compared with March 2014. Comparable store sales fell 17.8 percent in March versus sales in January and February.
The company’s laminate product, the focal point of the “60 Minutes” investigation, made up 16.4 percent of the sales mix in March. That figure was 21.2 percent in the two months prior to the report.
While Lumber Liquidators’ market cap remains $963.3 million below where it was before the report aired, the company’s stock rose 10 percent last week. The stock was at $34.51 when this story was published. Before the company announced it would be the subject of a negative “60 Minutes” episode, stock was trading at $68.78.
The company also announced that about 10,000 in-home air quality tests have been requested by customers.
At least one lawsuit has been filed against the company over the air quality tests it is providing to customers, according to Bloomberg News. A Florida couple alleges an independent technician tested flooring they were going to install in their baby’s room and found it “unsafe.” Lumber Liquidators told the couple they should instead use the retailer’s air quality test kit. The couple claim this and other statements are “a false and deliberate attempt to foster a false sense of security,” according to Bloomberg News.
More than 75 lawsuits have been filed against Lumber Liquidators since the “60 Minutes” investigation aired, according to the National Law Journal.
