Lumber Liquidators reported a bigger-than-expected quarterly loss, hurt by higher marketing expenses to woo back customers, and said it could not provide a timeline for potential settlements with regulators, or an outlook for its business.
Shares of the company fell as much as 12.7 percent to $16.13 in morning trade, despite reporting its first quarterly sales rise in six quarters.
Sales of Lumber Liquidators, which owns brands such as Bellawood hardwood flooring, have been hammered since CBS published a report last year that alleged that some of the company's flooring products had high levels of formaldehyde, a known carcinogen.
Since then, the company has faced several lawsuits from investors and has been investigated by several federal agencies, including the Securities and Exchange Commission and the Centers for Disease Control and Prevention.
Lumber Liquidators has settled with some regulators, including the U.S. Department of Justice and the California Air Resources Board, to implement a strict environmental compliance plan and conduct a free air-testing program, but is still under investigation by the SEC and the U.S. Attorney's Office for the Eastern District of Virginia.
Lumber Liquidators executives said on a call with analysts, that they "have a lot of work to do," in balancing investments to drive sales and becoming profitable again.
Total sales rose 3.4 percent to $244.1 million, while same-store sales grew 1 percent in the third quarter ended Sept. 30.
Analysts had expected sales of $231.6 million and a same-store sales decline of 3.8 percent.
Net loss, however, widened to $18.44 million, or 68 cents per share, in the quarter, from $8.5 million, or 31 cents per share, a year earlier, partly due to a $4.3 million charge related to settlement of a securities class action lawsuit.
Analysts on average had expected the company to post a loss of 19 cents per share, according to Thomson Reuters.
Shares of Lumber Liquidators have lost more than half of their value since March last year since the CBS report.
Lumber Liquidators falls 12% after larger-than-expected quarterly loss
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