LL Flooring Q1 Earnings Dented From High Interest Rates And Inflation, Dodges Outlook

LL Flooring Holdings, Inc LL reported a first-quarter FY24 sales decline of 21.7% year-on-year to $188.49 million, missing the analyst consensus estimate of $218.6 million.

Comparable store sales decreased 21.5% versus last year, reflecting continued declines in traffic and lower average project sizes from its consumer and Pro customers.

Adjusted EPS loss of $(1.04) missed the consensus estimate of $(0.27).

Gross margin expanded 120 basis points Y/Y to 37.8%, and the gross profit fell 19.1% to $71.1 million.

The operating loss for the quarter expanded to ($27.4) million versus a loss of $(13.2) million last year.

The company held $5.968 million in cash and equivalents as of March-end. Cash used in operating activities for the quarter totaled $(23.7) million.

“First quarter business conditions remain difficult as we continue to experience the impact of weaker home sales, elevated interest rates and inflation, which have led to softness in home improvement, remodel and big ticket discretionary spending,” said President and CEO Charles Tyson.

Outlook: LL Flooring said it is not providing financial guidance at this time, citing uncertainty in the macroeconomic environment due to low consumer confidence, inflation, a volatile interest and mortgage rate environment, and continued declines in existing home sales. 

Price Action: LL shares traded lower by 6.2% at $1.50 premarket at last check Wednesday.

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