Lumber Liquidators 4Q profit up on higher revenue

RICHMOND, Va. (AP) — Lumber Liquidators Holdings Inc. said Wednesday that its fourth-quarter profit increased nearly 43 percent as the hardwood flooring retailer's revenue rose and margins increased.

The Toano, Va.-based company said its net income rose to $8.5 million, or 30 cents per share, for the three-month period ended Dec. 31, up from $5.9 million, or 21 cents per share, a year ago when costs related to the implementation of a new point-of-sale and inventory management system drove its results down.

Revenue rose nearly 14 percent to $174.5 million, and revenue at stores open at least a year increased about 2 percent. That comparison is a key gauge of a retailer's health because it excludes stores that recently opened or closed. Lumber Liquidators opened seven stores during the quarter and has more than 265 stores in North America.

Analysts polled by FactSet expected higher earnings of 34 cents per share on lower revenue of $170.2 million.

Its shares fell $1.28, or 6 percent, to $20.25 in midday trading Wednesday after falling as low as $18.65 earlier in the session. Its shares, which peaked at a 52-week high of $27 in late May, have been making a fitful recovery from a low of $13.43 in early September.

The company's value proposition resonates with consumers and has increased traffic and sales, CEO Robert M. Lynch said in a conference call with investors.

Lumber Liquidators saw its gross margin increase to 35.5 percent from 34 percent last year as relationships with wood mills lowered costs and helped offset higher transportation expenses. Selling, general and administrative expenses fell to 27.7 percent of net sales due to productivity gains, while overall costs increased due to opening more stores and sales commissions and bonuses grew.

For the full year, the company said its net income remained flat at $26.3 million, or 93 cents per share. Its revenue grew about 10 percent to $681.6 million, but revenue at stores open at least one year fell 2 percent compared with a year earlier.

The company said it expects full-year 2012 earnings in the range of between $1.05 and $1.20 per share.

Lumber Liquidators also said Wednesday that its board has authorized the repurchase of up to $50 million in the company's stock.

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Michael Felberbaum can be reached at http://www.twitter.com/MLFelberbaum.