Lumber Liquidators is crashing
The laminate-flooring retailer's sales fell for the fourth straight quarter since the "60 Minutes" episode that alleged it sold flooring with harmful levels of formaldehyde aired last March.
Lumber Liquidators' sales fell 10% to $234 million, while its net loss was $1.20 a share, more than the consensus forecast for -$0.22 according to Bloomberg.
Last month, the company reached a settlement agreement with the State of California Air Resources Board over its inquiry and was billed a $2.5 million fine. A court also ruled that the non-profit Global Community Monitor had the burden of proving Lumber Liquidators did not provide clear and reasonable warnings to its California consumers.
But clearly, the company is still reeling from the China-sourced flooring scandal as sales continue to decline.
The company said Tuesday that it got a third subpoena from the New York Regional Office of the Securities and Exchange Commission (SEC) related to financial reporting and disclosure.
"Our sales results fell short of our expectations, but we continue to see improvement in our gross margin from the lows of 2015 driven by our strategic pricing initiatives," said CEO John Presley in the earnings statement.
In March, hedge fund manager Whitney Tilson, who was a key source for the "60 Minutes" episode, said he had re-entered his short position after covering it in December.
