USA TODAY US Edition

Lumber Liquidator­s posts Q4 loss

Falls 73 cents a share in wake of reports from CDC and ‘60 Minutes’

- Nathan Bomey

Lumber Liquidator­s swung to a loss for the fourth quarter as fervor surroundin­g the hardware retailer’s business practices battered sales.

The chain posted a loss of $19.8 million in the fourth quarter, or 73 cents a share, a year after recording net income of $17.3 million, or 64 cents a share. Last year a 60 Minutes report exposed a high cancer risk from laminate flooring made in China and sold in the company’s stores.

Sales at stores open at least a year — a standard measure used to gauge a retailer’s health — tumbled 17.2% in the fourth quar- ter compared to a year earlier. Total sales fell 13.7% to $234.8 million.

The company last year halted sales of China-made laminates soon after accusation­s surfaced that formaldehy­de in the flooring exposes customers to a high risk of cancer and other health problems.

Hope that the company had put the controvers­y in its past was extinguish­ed last month when the Centers for Disease Control and Prevention reported that the health risk of the laminate flooring was three times higher than it had previously estimated.

The CDC had said on Feb. 10 that formaldehy­de levels in the China-made flooring would cause two to nine cancer cases per 100,000 people. The new estimate is six to 30 cases per 100,000 people.

The company bought full-page advertisem­ents in major U.S. newspapers Sunday to distance itself from the flooring and assure customers of the quality and safety of its other products.

In an unrelated matter, Lumber Liquidator­s recently agreed to a settlement with the U.S. Justice Department involving $13 million in penalties and five years of probation after acknowledg­ing it was guilty of illegally importing wood from forests that are home to endangered species.

“Over the past quarter we have taken meaningful steps to re-establish Lumber Liquidator­s with our customers and our shareholde­rs,” Lumber Liquidator­s CEO John Presley said Monday in a statement.

“While we have made some progress in key areas such as compliance and core operationa­l efficiency, we still have a long way to go. That said, our business model is intact, we are addressing legacy issues with clarity and candor, and we are rebuilding our brand.”

For the full year, Lumber Liquidator­s’ sales fell 6.6% to $978.8 million. Same-store sales declined 11.1%.

The company posted a net loss of $56.4 million for the year after earning a profit of $63.4 million in 2014.

Lumber Liquidator­s had 374 stores in the U.S. and Canada as of Dec. 31.

 ?? SCOTT OLSON, GETTY IMAGES ?? The CDC said the cancer risk of Lumber Liquidator­s’ Chinesemad­e laminate flooring was three times higher than estimated.
SCOTT OLSON, GETTY IMAGES The CDC said the cancer risk of Lumber Liquidator­s’ Chinesemad­e laminate flooring was three times higher than estimated.

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