UPDATE: Jefferies Downgrades Lumber Liquidators; Shares Continue To Fall

After the market closed Wednesday evening, Lumber liquidators LL announced a significant miss in the second quarter, and the Street has not taken it well.

Shares of the company traded down eight percent Wednesday in the run up to the release and have dropped 22 percent Thursday morning.

Robert M. Lynch, President and Chief Executive Officer of Lumber Liquidators, commented, "Customer traffic to our stores was significantly weaker than we expected."

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

In response to the miss, Jefferies analyst Daniel Binder issued a note in which he downgraded Lumber Liquidators from Buy to Hold and slashed the price target from $115 to $57.

Looking forward, Binder is modeling full-year 2014 comps of -1.9 percent and is expecting expense growth for the second half of the year to be between 10-15 percent. Additionally, Binder cut his estimate for new stores in 2015 from 48 to 40.