Analyst Stifel Offers Perspective on LL Q2 2015 Performance

St. Louis, MO, August 6, 2015—Analyst Stifel offered its perspective on Lumber Liquidators’ performance and outlook, following the company’s release of Q2’s 5.8% YOY loss results and the subsequent 13% one-day drop in its stock, “From a sales perspective, it seems like the 60 Minutes impact was at least a negative high single-digit impact on comp sales, but likely much more than that as the company combatted the traffic decline with a push in promotions. On the earnings side, it’s difficult to decipher, but one thing is undoubtedly clear, LL is still very much in a clearance/promotion near term and the legal issues are not close to sorted out so a large cloud remains over the stock in trying to value the business until one or preferably both of these issues are resolved.”

Stifel reports that Lumber Liquidators’ message during the quarterly conference call was consistent: get back to basics. “Based on actions taken during the quarter, that means the exit of the tile test and the beginnings of vertical integration plans and a hard focus on getting customers into the stores. We agree with this approach but the elusive damaged reputation issue lingers in the consumers’ minds and that is more difficult to fix. Although the consumer may not necessarily know this, the company took a $5 million charge on engineered wood that presumably had questionable lumber origin that was the subject of the DOJ investigation pertaining to the Lacey Act. These discoveries are disquieting at best.”

The analyst continued with its hold rating on the stock, which has ranged from $70/share to $13/share over the last 52 weeks.

The analyst notes that there the public still doesn’t know when or if “the various regulatory agencies (CARB, EPA, CPCS, etc) could or would bring some sort of penalities or charges against the company,” and that the many pending lawsuits against the company make impossible to know what outcomes or penalties lie ahead.