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Lumber Liquidators Q3 income rises, new VP named

BY HBSDealer Staff

Toano, Va.-based Lumber Liquidators announced net income for the third quarter ended Sept. 30 increased 57.2% to $6.7 million, compared with $4.3 million in the third quarter of the prior year. Net sales increased 16.8% to $172.0 million in the third quarter, compared with $147.2 million in the year-ago period. 

Comparable-store net sales increased 3% for the third quarter, versus a decrease of 5.7% in the third quarter of 2010. Net sales at non-comparable stores increased $20.3 million over the prior-year period.

Lumber Liquidators opened 33 new store locations in 2011, including six that opened in the third quarter.

"We made good progress on our strategic initiatives in the third quarter, despite a difficult macroeconomic environment which has caused our customers to remain cautious and price sensitive with regard to large-ticket discretionary purchases,” said CEO Jeffrey Griffiths.

“During the quarter, we further laid the foundation for the company’s long-term success by continuing our investment in our sourcing initiatives. Specifically, with the recent acquisition of certain of Sequoia’s assets, we further strengthened our direct relationships with mills in China, allowing us to more efficiently and effectively control the quality and costs of products sourced in this region. We believe these enhancements will enable us to strengthen the value proposition to our customer, ultimately expanding our operating margins over the longer-term.”

Net income for the first nine months decreased 12.5% to $17.8 million, compared with $20.3 million in the prior-year period. Net sales for the nine-month period increased 8.6% to $507.1 million, compared with $467.1 million in the first nine months of 2010. 

The company expects full-year net sales to be in the range of $674 million to $681 million, from the previous range of $673 million to $686 million.

In other company news, Carl Daniels has joined Lumber Liquidators as senior VP supply chain, effective Oct. 31, 2011. Daniels will oversee the company’s international and domestic logistics, warehousing and distribution operations. He will report directly to Robert Lynch, president and chief operating officer. 

Daniels most recently served as senior VP supply chain and operations at Harbor Freight Tools. He has also served in executive level logistics positions at Michaels Inc., Retail Ventures Services and Midas International, among others.

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Survey: 37% of retailers now have a mobile site

BY HBSDEALER Staff

The third annual Mobile Audit, released Thursday by e-commerce and digital marketing company Acquity Group, found that mobile adoption is on the rise. In fact, the percentage of retailers with a mobile site reached 37% in 2011, up from 12% in 2010 and only 4% in 2009 — a 210% increase over the past year alone.

The survey also found that one in four retailers have at least one mobile app, with nearly a quarter developing for the iPhone, followed by Android (10%). The number of retailers offering mobile apps grew 278% over the past year, rising from 7% in 2010 to slightly more than 26% in 2011

Leaders in the mobile space, according to survey findings, are — in alphabetical order — Amazon, Armani Exchange, Barnes & Noble, Buy.com, Cabela’s, Gilt Groupe, The Home Depot, Newegg, Walgreens and Wal-Mart.

“These 10 retailers are executing mobile tactics that are positioning them ahead of the mobile commerce curve,” said Tom Nawara, VP digital strategy and design at Acquity Group. “All of these companies have made a focused commitment to mobile, and it’s paying off. Not only have they implemented mobile-optimized sites to support a wide range of devices, but they have taken initiatives a step further with exceptional transactional functionality and well-designed apps that meet customer needs.”

The survey also found that the percentage of companies with a site optimized specifically for the iPhone decreased, from 11% in 2010 to 9% in 2011. Nawara explained that as mobile browsers become more similar and full-featured across different devices, this non-specialization is an expected trend. 

Although tremendous progress is being made across the board, the rate of mobile adoption, and the specific mobile tactics used, can vary considerably by industry. For example, Acquity Group’s analysis shows that for the implementation of iPhone apps, industry groups such as health and beauty, food and drug, and sass merchants skewed much higher (an average of 66% adoption) than groups such as flowers and gifts, and hardware and home improvement (an average of 36% adoption).

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Whirlpool posts strong third quarter

BY HBSDealer Staff

Benton Harbor, Mich.-based Whirlpool Corp. posted third-quarter net earnings of $177 million, compared with net earnings of $79 million in the same period last year. Sales in the quarter were $4.6 billion, up 2% to $4.5 billion reported in the third quarter of 2010. 

"During the quarter, we experienced weaker-than-expected global industry demand and elevated material costs," said Jeff Fettig, Whirlpool chairman and CEO.  "Consumers continue to show strong preference for our unmatched global brand portfolio and new product innovations, and we are beginning to see the benefits from previously announced price increases.  However, our results were negatively impacted by recessionary demand levels in developed countries, a slowdown in emerging markets and high levels of inflation in material costs. 

"Given the weakening global economic environment, we are today announcing aggressive plans that will result in substantial cost and capacity reductions. The plans are the result of a comprehensive global review of our operations, products and manufacturing facilities." 

Whirlpool plans to reduce cost and capacity with a workforce reduction of more than 5,000 positions — about 10% — primarily within North America and Europe. These plans include: 

• Reduction of about 1,200 salaried positions;
• Closure of the refrigeration manufacturing facility in Fort Smith, Ark., by mid-2012. Production from Fort Smith will be consolidated into North American sites to leverage existing resources and capacity;
• Relocation of dishwasher production from Neunkirchen, Germany, to Poland in January 2012; and
• Additional organizational efficiency actions in North America and Europe.

The company expects these actions will result in $400 million in annual cost savings by the end of 2013. 

Whirlpool North America saw third-quarter sales of $2.4 billion, a decrease of 2% from the prior year. Whirlpool Europe, Middle East and Africa reported third-quarter sales of $874 million, a 6% increase from the third quarter of 2010. Whirlpool Latin America reported third-quarter sales of $1.2 billion, an increase of 8% from the year-ago period. Whirlpool Asia saw third-quarter sales of $215 million, an increase of 10% from the prior year. 

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