Earnings season has been a volatile time for Lumber Liquidators (NYSE:LL) shareholders, but it paid off to be long the hardwood-flooring retailer last week. Lumber Liquidators' stock rose 13.2% after posting better-than-expected financial results for the fourth quarter. The home-improvement chain's CEO also had some comforting words to offer on the near-term sustainability of its turnaround efforts. 

Net sales for the quarter rose 4.3%, to $244.9 million. Comps rose 2.8% on a combination of a 3% average sale and a 0.2% dip in customers invoiced. It's Lumber Liquidators' second-consecutive period of positive comps, but we need to frame that year-over-year improvement in a proper light.

Comps plunged 17.2% during the prior year's fourth quarter, and that followed a 4.2% decrease the year before that. Put another way, the average store is ringing up 18.5% less in net sales than it was three years ago.

The opening of new stores also helped pad its growth, though it was just a marginal contributor. Expansion has slowed at Lumber Liquidators in the fallout of the early 2015 scandal where the quality of some of its China-sourced laminates were called into question by 60 Minutes -- and ultimately recalled. When you get singled out as a seller of potentially dangerous laminate flooring with noncompliant levels of formaldehyde, it's obviously going to scare away potential customers.

Lumber Liquidators is still losing money. It posted a loss of $5.5 million, or $0.20 a share, for the holiday quarter, well short of the $0.73 a share deficit it served up a year earlier -- but it's still the plank walker's eighth quarter in a row of red ink. The good news for investors is that weak top-line growth and another quarterly loss is all relative. Analysts were settling for a deficit of $0.31 a share on $242.2 million in net sales.

A billiard room in a house with Lumber Liquidators hardwood flooring.

Image source: Lumber Liquidators. 

It's the wood that makes it good

Lumber Liquidators' stock has soared 74% since bottoming out a year ago, but it's still trading 85% below its all-time high set in late 2013. Some of the upticks have come on buyout speculation, since it's not as if the retailer's financial performance last year was applause worthy. Last week's report may not seem all that amazing, but it's the first time in more than a year that Lumber Liquidators didn't post a wider loss than Wall Street pros were targeting. 

The home-improvement specialist is doing its best to get past what's now a scandal that's two years old. It got rid of its Chinese laminates. There have also been a few executive changes. CEO Dennis Knowles was promoted to the helm late last year, just months after being brought in as its new COO. 

Knowles is upbeat about the chain's prospects. He feels that stocking a deeper inventory of trending products, as well as beefing up the development of its installation of pro-customer programs, will continue to push sales growth. That road will ultimately lead to a return to actual profitability, but there's no timeline as to when that will materialize. Lumber Liquidators is taking small steps in the right direction, but it's going to be a long road back.