Better-than-expected results, higher guidance, and international expansion news weren't enough to catapult shares of Lumber Liquidators
It's a shame, because Mr. Market is missing out on one of the few housing-related success stories at this stage of the industry's turnaround process.
Net sales at the hardwood flooring chain rose 22%, to $151.2 million, powered by expansion and an 8% spike in comps. Earnings soared 37%, to $0.25 a share. Analysts were targeting a profit of $0.24 a share on $147.0 million in revenue.
Lumber Liquidators' bottom line grew faster than net sales despite a slight contraction in gross margins, which were squeezed by higher transportation costs and promotional pricing. This was essentially the only negative in the company's first quarter, but the ultimate profit growth should silence the skeptics.
After opening 11 stores during the quarter and another two locations in April, Lumber Liquidators has 199 stateside stores. It believes it can double that base domestically, but is still making a move to enter the Toronto market later this year. It sees the long-term potential of at least 30 stores in Canada.
Lumber Liquidators is alone in its ability to grow this quickly in the home-improvement space. Superstore behemoths Home Depot
Soft goods are holding up well -- with Bed Bath & Beyond
It's a good place to be, even if today's investors are simply unfashionably early.