A tariff win for Lumber Liquidators
Lumber Liquidators, the specialty flooring retailer, reported that its fourth quarter 2019 results will include approximately $11 million in additional operating income following a ruling by the U.S. Trade Representative (USTR).
The USTR ruled that some flooring products imported from China have been retroactively excluded from Section 310 tariffs. Beginning in September 2018, the products were subject to a 10% tariff that was raised to 25% in June 2019.
In November, the U.S. Customs and Border Protection also issued Chapter 99 exclusions on items identified under the USTR ruling. Flooring products currently excluded from the 25% Chinese tariffs include certain "click" vinyl and engineered products that Lumber Liquidators has sold and continues to sell.
Lumber Liquidators said the exclusions apply retroactively from the date the tariffs were originally implemented on Sept. 24, 2018 through Aug. 7, 2020.
"We are pleased with the USTR's decision to retroactively exclude certain vinyl and engineered flooring products from Section 301 tariffs," said Chief Executive Officer Dennis Knowles. "Luxury vinyl tile is one of the fastest-growing segments of the hard-surface flooring market, and we look forward to continuing to serve consumers with a broad selection of floors that can satisfy nearly any style."
Lumber Liquidators expects to recover an additional $25 million from U.S. Customs and expects to receive a payment by the end of the second quarter of 2020.
The company also updated its outlook for 2020, saying it expects its revenue to be “flat to slightly positive” in the next fiscal year. Lumber Liquidators projects its comp store sales to between a 2% drop to flat but forecasts an operating margin as great as 2.4%. Previously, Lumber Liquidators said that its operating margin would be up between 1% to 1.4%.
Based in Richmond, Va., Lumber Liquidators operates 419 stores across the country. The company said it will open “approximately” 11 new stores in 2020.
Last month Lumber Liquidators reported that third quarter 2019 sales fell 2.4% to $264 million. The retailer also posted a net income of $1 million for the period, down from $5.9 million for the same period in the prior year.
The USTR ruled that some flooring products imported from China have been retroactively excluded from Section 310 tariffs. Beginning in September 2018, the products were subject to a 10% tariff that was raised to 25% in June 2019.
In November, the U.S. Customs and Border Protection also issued Chapter 99 exclusions on items identified under the USTR ruling. Flooring products currently excluded from the 25% Chinese tariffs include certain "click" vinyl and engineered products that Lumber Liquidators has sold and continues to sell.
Lumber Liquidators said the exclusions apply retroactively from the date the tariffs were originally implemented on Sept. 24, 2018 through Aug. 7, 2020.
"We are pleased with the USTR's decision to retroactively exclude certain vinyl and engineered flooring products from Section 301 tariffs," said Chief Executive Officer Dennis Knowles. "Luxury vinyl tile is one of the fastest-growing segments of the hard-surface flooring market, and we look forward to continuing to serve consumers with a broad selection of floors that can satisfy nearly any style."
Lumber Liquidators expects to recover an additional $25 million from U.S. Customs and expects to receive a payment by the end of the second quarter of 2020.
The company also updated its outlook for 2020, saying it expects its revenue to be “flat to slightly positive” in the next fiscal year. Lumber Liquidators projects its comp store sales to between a 2% drop to flat but forecasts an operating margin as great as 2.4%. Previously, Lumber Liquidators said that its operating margin would be up between 1% to 1.4%.
Based in Richmond, Va., Lumber Liquidators operates 419 stores across the country. The company said it will open “approximately” 11 new stores in 2020.
Last month Lumber Liquidators reported that third quarter 2019 sales fell 2.4% to $264 million. The retailer also posted a net income of $1 million for the period, down from $5.9 million for the same period in the prior year.