LL - Lumber Liquidators Non-GAAP EPS of -$0.29 misses by $0.37 revenue of $263.87M misses by $3.73M

• Lumber Liquidators press release ( NYSE: LL ): Q4 Non-GAAP EPS of -$0.29 misses by $0.37 .
• Revenue of $263.87M (-7.5% Y/Y) misses by $3.73M .
• Total comparable store sales decreased 9.5% versus the same period last year.
• Gross margin of 35.9% decreased 140 basis points as a percentage of sales and Adjusted gross margin ¹ of 35.7% decreased 170 basis points as a percentage of net sales compared to the same period last year
• SG&A as a percentage of net sales of 42.5% increased 900 basis points compared to the fourth quarter of last year
• During the fourth quarter, the Company opened three new stores, bringing total stores to 442 as of December 31, 2022.
• Through its sourcing strategy, the Company reduced the percent of merchandise receipts subject to Section 301 tariffs to 12% from 15% in the fourth quarter of last year.
• 2023 Outlook:
• In terms of our sales outlook for 2023, while we strongly believe that our strategy to increase brand awareness and improve the customer experience will gain traction and drive improved store productivity throughout the year, our visibility is limited as to when the macroeconomic environment will normalize.
• Adjusted gross margins are expected to improve year-over-year, with a stronger second half, driven primarily by a reduction in international shipping rates and sourcing costs. The Company will continue to monitor the competitive pricing environment to inform its pricing and promotion strategies. In addition, the Company expects its gross margin rate in 2023 to benefit from a greater mix of higher margin products that deliver on customer needs for scratch proof and water proof flooring.
• SG&A dollar spend and SG&A spend as a percentage of sales are expected to increase year-over-year, primarily due to inflationary pressures on wages and benefits, and productivity investments such as its customer relationship management platform, which it expects will support higher sales levels and make its operating structure more efficient over time.
• Capital expenditures in the range of approximately $15 million to $20 million in 2023, primarily to support growth strategies such as new stores, productivity investments, and maintenance CapEx.
• The Company expects to open three new stores in 2023.

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