Lumber Liquidators, still reeling from safety allegations regarding its Chinese-made laminate product made in March, reported an $8.5 million loss in the third quarter of 2015 and announced a new CEO.
The amount lost in the third quarter is less than the $20.3 million loss reported during the second quarter, but still a significant downgrade from the $15.7 million profit the retailer recorded in the third quarter of 2014.
Sales in the third quarter were $236.1 million, an $11.8 million decline from the second quarter and a $30 million decline from the third quarter of 2014. Comparable store sales declined 14.6 percent year-over-year.
The company attributed the unfavorable financials in the third quarter of 2015 to the allegations reported on CBS’ “60 Minutes” about the formaldehyde level in Lumber Liquidators laminates sourced from China.
The company has since suspended sales of laminate flooring made in China, another factor cited as a reason for its third-quarter drop in revenue.
"Despite the challenges we faced in the third quarter, we believe that our value proposition is as strong and relevant as ever to our customers,” said Tom Sullivan, founder, in a statement.
The company also announced it found a new CEO to take over from acting CEO Sullivan, who was filling in after former CEO Robert Lynch resigned unexpectedly in May.
Effective Nov. 16, the new CEO is John Presley, former CEO of First Capital Bancorp. Sullivan will serve as a special advisor to Presley to provide guidance while Presley begins steering the company.
Presley was the independent chairman of the board of directors and head of the special committee tasked with managing the nonoperational issues the company faced in the past year. He has been on the board of directors since 2006, prior to Lumber Liquidators’ change from a private company to a publicly traded company.
“Over the years I have come to see just how committed our employees are,” he said in a statement. “I know that together, we have the drive and the vision to succeed and enter the next chapter of our company's exciting future as we execute our turnaround.”
Presley's role as independent chairman of the board will go to Nancy Taylor, a board member since April 2014.
