TOANO, VA - Lumber Liquidators net sales increased 4.6 percent to $266.1 Million in the third quarter, but net income of $15.7 Million, down from $20.4 Million in the year ago period. Comparable store sales, a gauge of stores open at least a year, fell 4.9 percent.
"Constrained inventory of certain key products and promotional events led to a gross margin which was lower than we had anticipated," says robert Lynch, CEO, in the earnings announcement. "While 2014 has been a challenging year in a number of areas, we believe the significant investments we have made in our infrastructure and the continued implementation of our key strategic initiatives have positioned us well for future growth and operating margin expansion."
Impacting net income are capital expenditures of $85 million for 2014, including up to $50 million for supply chain investments. During an analyst call, CFO Dan Terrell said investment in "property and equipment related to our new distribution centers, now totaling $44 million; and expansion of our finishing capacity in vertical integration projects, which now total $7.8 million," was proceeding.
Lumber Liquidators is in the middle of consolidating warehousing and floor finishing operations in Toano. It has also come under fire from analysts, investors, and environmentalists who have questioned its sales projections and lumber and flooring sourcing practices.
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