Lumber Liquidators adjusted its 2019 financial outlook to include an additional $11 million in its fourth quarter operating income. The update follows retroactive Chinese tariff exclusions enacted by the U.S. on certain click vinyl and engineered flooring products.
Lumber Liquidators adjusted its 2019 financial outlook to include an additional $11 million in its fourth quarter operating income. The update follows retroactive Chinese tariff exclusions enacted by the U.S. on certain click vinyl and engineered flooring products.
Lumber Liquidators said it expects to recover around $25 million that it paid in tariffs by the end of the second quarter of 2020.
In November, the United States Trade Representative announced select vinyl and engineered flooring would be excluded from the 25% Chinese tariffs. The exclusions are retroactive from the time the U.S. tariffs on Chinese products went into effect in September 2018. The exclusions expire Aug. 7, 2020.
"We are pleased with the USTR's decision to retroactively exclude certain vinyl and engineered flooring products from Section 301 tariffs," Lumber Liquidators CEO Dennis Knowles stated. “We look forward to continuing to serve consumers with a broad selection of floors that can satisfy nearly any style.”
The company also announced it will reduce the carrying cost of inventory by approximately $12 million due to the tariff exclusions.
The company’s stock jumped from $9.48 to $11.18 in one day following the Dec. 12 announcement, an increase of nearly 18%. By Dec. 19, Lumber Liquidators stock had dropped down to $9.86.