LL Flooring 'disappointed' with latest financial performance
LL Flooring said economic headwinds impacted its third quarter, with President and CEO Charles Tyson saying the company was “disappointed” in its third quarter results.
Sales for the third quarter fell nearly 19.7% to $215.8 million compared to third quarter 2022 sales of $268.8 million. LL Flooring attributed the decline to lower spending by both consumers and pro customers.
Additionally, comp store sales decreased significantly and dropped 20.5% during the quarter.
The Richmond, Virginia-based hardwood flooring retailer opened one new store during the quarter, bringing its total to 443 locations as of Sept. 30.
LL Flooring also posted a net income and comprehensive income loss of $35.96 million for the third quarter, marking a deeper plunge from a net loss of $3.77 million. For the first nine months of 2023, the retailer has posted a combined net loss of $85.5 million in comparison to a net income of nearly $3 million during the same span a year ago.
The company also posted an operating loss of $29.6 million for the third quarter. During the same period last year, LL Flooring reported an operating loss of $4.11 million.
In August, the LL Flooring Board of Directors said it was weighing its options including “strategic alternatives” including a possible sale of the company. The announcement arrived after a difficult financial performance in the first half of 2023.
Last month, Live Ventures Incorporated submitted a non-binding proposal to acquire LL Flooring Holdings for $5.85 per share in an all-cash transaction. The holding company specializes in the retail and flooring industries.
The offer represented a 106% premium to LL Flooring’s stock price on Oct. 6, 2023. The offer is also a 94.4% premium above the flooring retailer’s 30-day average stock price.
While LL Flooring has acknowledged receipt of the offer, it has not made any further statements about a sale.
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The Bottom Line: As sales drop nearly 20% in the third quarter, LL Flooring reports a net loss $35.96 million.
What the CEO said: "We continue to navigate uncertainty in the macroeconomic environment due to low consumer confidence, inflation, an elevated interest and mortgage rate environment, and lower existing home sales,” said Charles Tyson, prescient and CEO of LL Flooring. “Despite external headwinds, we remain confident in our ability to deliver the high-touch service of an independent flooring retailer combined with the value, assortment, and convenience of a national brand.
"We are disappointed in our third quarter results, which continued to be negatively impacted by the macroeconomic environment, as well as internal challenges that we are focused on as we execute against our strategic initiatives,” Tyson added.
The CEO noted that LL Flooring remains committed to executing a brand transformation strategy and five strategic initiatives: “focusing investments on our top growth priorities growing our brand awareness; enhancing our product offerings by innovating products; ensuring a consistent customer experience across our omnichannel network; and improving operating efficiencies.”
“We believe each initiative will improve sales productivity and profitability long term, Tyson said.
Company Info: Click here to read the full third quarter financial report from LL Flooring.
