LL - Lumber Liquidators - Company Profile
Lumber Liquidators Holdings, Inc., together with its subsidiaries, operates as a multi-channel specialty retailer of hardwood flooring, and hardwood flooring enhancements and accessories. The company offers hardwood species, engineered hardwood, laminates, and resilient vinyl flooring; renewable flooring, and bamboo and cork products; and a selection of flooring enhancements and accessories, including moldings, noise-reducing underlay, adhesives, and flooring tools under the Bellawood brand and Lumber Liquidators name. It also provides in-home delivery and installation services. The company primarily serves homeowners, or to contractors on behalf of homeowners. As of December 31, 2016, it operated 383 stores in the United States and 8 stores in Canada. The company also offers its products through its Website, catalogs, and call center. Company description from FinViz.com.
LL is back! They reported earnings of 16 cents for Q2 that beat estimates for 8 cents. Revenue of $263.5 million beat estimates for $256.9 million. Same store sales rose 8.8% and beat estimates for 6.0%. Customer traffic increased 5.3% and the average sale rose 3.5%. Gross profits rose 38.1%. Gross margins increased from 29.7% to 37%. Cash on hand was $112 million and outstanding debt $57 million.
The company has recovered from the Chinese flooring scandal from two years ago and customers are shopping at LL once again.
LL should benefit from the hurricane recovery effort. They have 8 stores in the immediate area around Houston and 7 others a little farther away from the disaster area. The vast majority of flooded homes are going to need new flooring. Many will make the switch to wood from carpet to avoid the constant problems with mold in a humid climate. This should benefit LL for the next four quarters.
Earnings Oct 31st.
Shares spiked sharply on the earnings in early August and were experiencing some post earnings depression until the hurricane hit. The initial spike on the disaster has faded and offers us a chance to enter the position a little cheaper.
Buy Jan 2019 $40 LEAP Call, currently $5.80, initial stop loss $33.85.