Lumber Liquidators reported a net profit of $9.7 million in 2019, marking the first year the company has been profitable since it was rocked by a 2015 "60 Minutes" report questioning the formaldehyde levels in its laminate flooring. Its net sales grew 0.7% year-over-year to $1.09 billion.
“Our tariff mitigation efforts in 2019, coupled with the exclusions announced in November, allowed us to substantially improve gross margins while remaining focused on delivering value to customers,” stated Interim President and Chief Customer Experience Officer Charles Tyson. The company’s former president and CEO, Dennis Knowles, resigned Feb. 5. In 2018, the company reported a net loss of $54.4 million.
Lumber Liquidators reported a net income of $16 million for the fourth quarter of 2019, up from a loss of $55 million in the fourth quarter of 2018. Its net sales increased 1.8% to $274 million during the quarter.
The retail giant has struggled to be profitable since a 2015 “60 Minutes” report. The company settled a $36 million class-action lawsuit related to the flooring in 2018 and paid a $33 million settlement to federal and state governments after being charged with misleading investors during the 2015 scandal.
Because of the retroactive Chinese tariff exclusions on certain click vinyl and engineered flooring products, Lumber Liquidators expects to receive $25 million back from U.S. Customs throughout the first half of 2020.
The company also announced it is closely monitoring the spread of the coronavirus in China, where it obtains nearly half of its products.
“Depending on the length and severity of the situation, the company could see a material impact beginning as early as the second quarter, and such impact could continue for weeks or months,” Lumber Liquidators stated.
The company’s full Q4 2019 report can be found here.
