Lumber Liquidators has the home renovation blues

Shares plunge as the company says customers are delaying big-ticket improvement projects until the fall or next spring.

By MSN Money Partner Jul 10, 2014 12:34PM
Credit: Dwight Burdette via Wikipedia,
Caption: The exterior of a Lumber Liquidators store in Ypsilanti, Mich.By Sam Ro, Business Insider

Shares of Lumber Liquidators (LL) were crashing Thursday. The stock was down 20 percent in midday trading.

"Customer traffic to our stores was significantly weaker than we expected, particularly in geographic areas severely impacted by the unusually harsh weather in the first quarter," explained CEO Robert Lynch on Wednesday afternoon.

Lumber Liquidators sells specialty flooring in its 340 locations across the country.

Home renovation, like floor replacement, serves as a proxy for home sales activity.

"The improvement in customer demand we experienced beginning in mid-March did not carry into May, and June weakened further," said Lynch. 

"Our reduced customer traffic has coincided with certain weak macroeconomic trends related to residential remodeling, including existing home sales, which have generally been lower in 2014 than the corresponding periods in 2013," he added. "We now believe the prolonged purchase cycle associated with our customers' discretionary, large-ticket home improvement projects is likely to be delayed for some customers into the fall flooring season, and for others, into spring of 2015."

Earnings season has kicked off with a series of disappointing anecdotes from big U.S. retailers.

"Consistent with so many of our fellow retailers, we are experiencing a retail 'funk,'" said Container Store CEO Kip Tindell.

"Our results continue to reflect the economic challenges facing our core customer and an intense competitive environment," said Family Dollar CEO Howard Levine.

Hopefully, these are just anecdotes.

More from Business Insider
Tags: LL
Jul 10, 2014 2:14PM
When will companies stop blaming the weather for their poor sales results?
Jul 10, 2014 3:35PM
It's not the weather or "weak macroeconomic trends". My wood floors are shot and I can't afford to replace them. It's that simple. It's hard to remodel when you are having trouble just meeting the bills and feeding your kids!
Jul 10, 2014 5:28PM
Tried to get estimates for a bathroom remodel in central Ohio- bathroom is roughly 8 x 12 - VERY SMALL.  Had three remodelers in - average price for remodel was $25,000!  Not moving the commode or the stand-up shower - no tub in here.  Basically moving sink 90 degrees, and knocking out NON load-bearing wall, along with color and ceiling.  $25,000?  THAT'S why you cannot get anything done - and then they moan about how no one wants to do any remodels!  Give us REASONABLE pricing fro remodels - and you WILL see business!
Jul 10, 2014 4:04PM
really what took you so long to wake up
Jul 11, 2014 12:06PM

Lower taxes, and let those that EARN a living keep some of THEIR money, and stop supporting the parasitic democrats, and maybe people would have enough left over to afford some home improvement projects.

The democrats continue their war on the middle class and business.

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