LL Flooring Clocks 6% Sales Decline In Q4, Expects Challenging 1H'22

  • LL Flooring Holdings Inc LL reported a fourth-quarter FY21 sales decline of 6.2% year-on-year, to $285.28 million, missing the consensus of $295.50 million.
  • Comparable store sales decreased 6.7% versus last year and increased 3.8% on a two-year stack basis.
  • Merchandise sales decreased 8% Y/Y to $243.55 million, while Services sales rose 6.4% to $41.7 million.
  • Adjusted EPS of $0.35 topped the consensus of $0.24.
  • The gross margin contracted 150 basis points Y/Y to 37.3%, and the gross profit fell 10% to $106.5 million.
  • The operating margin fell 220 basis points to 3.8%, and operating income for the quarter decreased 40.5% to $10.9 million.
  • The company held $85.2 million in cash and equivalents as of December 31, 2021. Cash provided by operating activities for the twelve months totaled $38.7 million.
  • Buyback: The board of directors approved a $35.3 million increase in the share buyback program, bringing the total to $50 million.
  • Outlook: LL Flooring did not provide financial guidance for FY22, citing global supply chain disruptions, consumer spending, inflation, and a challenging labor market.
  • "We expect 2022 to be a tale of two halves, with a challenging first half turning to growth in the second half. We expect comparable store sales for the first quarter to improve slightly on a percentage basis from the fourth quarter of 2021, to improve again for the second quarter versus the first quarter of 2022, and to show positive growth for the full year 2022," said CEO Charles Tyson.
  • The company also announced a plan to achieve $1.5 billion of net revenue by 2024, with an expanded operating margin.
  • Price Action: LL shares traded lower by 2.81% at $13.13 in pre-market on the last check Wednesday.
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