Lumber Liquidators reports Q3 income down
Toano, Va.-based hardwood flooring retailer Lumber Liquidator posted third-quarter net income of $4.3 million, down 44.8% from $7.8 million as reported for the same quarter last year.
Sales for the quarter ended Sept. 30 were $147.2 million, up 4.7% from $140.5 million reported for the same quarter of 2009.
During the quarter, the company implemented an integrated business solution from SAP, including an enhanced point-of-sale solution, a warehouse management and inventory control system, an integrated merchandising and product allocation system, and related management reporting functionality. According to the company, the new systems impacted the third quarter by reducing productivity, primarily across store and warehouse operations, including less effective conversion of customer demand into invoiced sales, less efficient product allocation and distribution, and the general need for additional resources to operate the business.
“While we are confident that over the longer term the implementation of our new SAP system will significantly benefit the business, our performance in the third quarter reflects declines in productivity both at the store-level and in the flow of product through our warehouse following implementation,” said Jeffrey Griffiths, president and CEO.
“We experienced a significant build in customer deposits on open orders over the course of the quarter which, by the end of the quarter, grew to be almost double the level we recorded at the end of the third quarter last year.”
Griffiths added that the company was less effective in fulfilling customer orders than initially hoped during the transition, and more resources were invested than expected to improve productivity.
Looking forward, the company expects a 10% to 15% increase in the fourth quarter over the same period in 2009 for a range of $151 million to $157 million, with total net sales for 2010 to be $618 million to $624 million. The company also expects to open 11 new stores in the fourth quarter.
Lowe’s closes two SoCal stores
The North Carolina retailer, which operates more than 1,725 home improvement retail outlets in the United States, Canada and Mexico, cited inadequate past sales and bleak projections as its reasons for shuttering stores in Apple Valley and San Bernardino. The units are located in the southeastern portion of the state, which has been particularly hard hit by the recession, foreclosures and the building slowdown.
Aspokeswoman for Lowe’s said there would be no closeout sale at either store. Merchandise will be returned to a distribution center or moved to other locations, she said.
MDC announces CFO departure
Denver-based home builder MDC Holdings announced SVP and CFO Christopher Anderson has concluded his employment, effective Nov. 5.
The company, which builds homes under the name Richmond American Homes, said Anderson will provide consulting services to the company for 90 days.
The company did not announce a replacement.
“For the past two and a half years, Chris has been an integral part of our team,” said Larry Mizel, MDC’s chairman and CEO. “As a leader in the company, Chris’ ability to identify and solve key business issues has led to long-lasting improvements to our operations. As the leader of the finance organization, he has been an excellent steward of our investment grade balance sheet and has consistently demonstrated strong financial integrity. We regret seeing him go and wish him well.”
“I am honored to have had the opportunity to spend the past few years with MDC,” Anderson said. “I am grateful to senior management, the board of directors and the investment community for their support during my tenure, and I will do all that I can to ensure a smooth transition of my responsibilities over the next several months.”