Lumber Liquidators’ (LL) sales fell for the fourth straight quarter, missing analysts’ expectations again, as the hardwood flooring retailer struggles to revive demand amid fears that some of its products could cause cancer.
The company also reported a much bigger quarterly loss as it spends heavily to put behind allegations that some of its China-sourced flooring contained excessive levels of a carcinogen.
Lumber Liquidators said on Tuesday that it had reached an agreement to pay $26 million and 1 million shares through its insurers to settle a securities class action lawsuit.
Sales at the company’s stores open at least a year fell 13.9% in the first quarter. Analysts on average had expected a 12.6% drop, according to research firm Consensus Metrix.
Selling, general and administrative costs jumped 20% to $117.2 million, including $13.5 million in legal fees.
Its net sales slumped 10.2% to $233.5 million, missing the average analyst estimate of $237.4 million, according to Thomson Reuters I/B/E/S.
The net loss widened to $32.4 million, or $1.20 per share, in the quarter ended March 31 from $7.8 million, or 29 cents per share.
Up to Monday’s close of $13.45, Lumber Liquidators stock had lost nearly three-quarters of its value since Feb. 27, 2015, a trading day before CBS’s 60 Minutes program alleged that some China-sourced flooring sold by the company contained high levels of cancer-causing formaldehyde.