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Lumber Liquidators this month reported a boost in net sales during the fourth quarter of 2016, but the full year’s financial performance reflected woes that began in 2015.
In 2015, investigations into the chemical contents of the flooring discounter’s Chinese-made laminate started major upheavals for the company. The impacts on the company included repeated executive leadership turnover, high legal expenses and struggling sales.
In 2016, Lumber Liquidators’ net loss was $68.6 million for the year, compared to a $56.4 million loss in 2015, according to the company. Net sales fell from $978.8 million in 2015 to $960.6 in 2016, for a drop of 1.9 percent.
Fourth-quarter 2016 net sales of $244.9 million were up 4.3 percent from the same period a year ago, and comparable store sales grew 2.8 percent.
“We are pleased with our sales performance during the quarter, posting our second consecutive increase in comparable sales,” CEO Dennis Knowles says. “We continue to believe the strategic direction we set for the company remains sound, and we are committed to driving the actions that will return the company to profitability.”
As part of meeting strategic goals, the company invested in deepening its inventory selection and developing installation and professional customer programs, Knowles says. Prior to working for the company, he served as chief store operations officer for Lowe’s.
Knowles is the fourth person to serve in the role of CEO since Lumber Liquidators was accused in March 2015 of selling flooring that contained unsafe amounts of formaldehyde. Thomas Sullivan, the company’s founder, became interim CEO briefly, but now no longer holds any paid role with the company.
Due to the accusations, the company has faced federal scrutiny, lawsuits and other controversy. The Centers for Disease Control and Prevention decided in June 2016 that the laminate flooring could potentially cause breathing problems and increase cancer risks for people.
Lumber Liquidators stopped selling the Chinese-made flooring, paid a $2.5 million fine and began providing air quality testing kits to consumers who were using the laminate in their homes. The company had sold the flooring to hundreds of thousands of people.
