After another year impacted by legal matters regarding its 2015 Chinese-made laminate flooring scandal, Lumber Liquidators announced a net loss of $54.4 million in 2018, compared with a loss of $37.8 million in 2017.
The company’s net sales grew 5.4 percent in 2018 to $1.08 billion, with a comparable store net sales increase of 2.6 percent. It opened 21 new stores during 2018 and closed one, bringing its total to 413.
"2018 was a year of transformation for Lumber Liquidators, during which we executed on our growth initiatives, put significant legacy legal issues behind us, and laid the groundwork to position us for long-term success,” CEO Dennis Knowles said in a statement.
In October 2018, the company settled a $36 million class-action lawsuit stemming from its Chinese-made laminate flooring, which was found to contain levels of formaldehyde that exceeded CARB limits for emissions in 2015.
In its latest financial report, the company also announced it has entered an MOU to prepare to settle claims of purchasers of the company’s Morning Star Strand Bamboo from Jan. 1, 2012–March 15, 2019, for which it is prepared to pay a total of $30 million, about half in cash and half in store credit. Last week, it agreed to a $33 million settlement with the Department of Justice for misleading investors.
“These legal settlements represent a major milestone in our transformation,” Knowles added.
Lumber Liquidators had a fourth quarter 2018 net profit loss of $56.9 million, with a decline of $1.99 per share. Fourth quarter 2018 sales grew 3.5 percent to $268.9 million.
The company also announced in its financial report that CFO Martin Agard had resigned, effective April 5. The company has begun a search for a replacement.
Lumber Liquidators’ stock fell 10 percent after its financial report was released March 18 and was trading for $9.09 at press time.