Lumber Liquidators (NYSE: LL), the largest specialty retailer of hardwood flooring in North America, today announced financial results for the fourth quarter and full year ended December 31, 2017.
Fourth Quarter Results
Net sales in the fourth quarter of 2017 were $260 million, an increase of 6.1% from the fourth quarter of 2016. This includes a comparable store net sales increase of 4.5%, which reflected a 3.4% increase in average sale and a 1.1% increase in customers invoiced. Non-comparable store net sales increased $4.1 million over the comparable prior-year period. The Company opened six new stores during the fourth quarter of 2017.
Gross margin was 35.4% in the fourth quarter of 2017, compared with 32.9% in the prior-year period. This increase was driven by a shift in mix toward vinyl and engineered products, lower transportation costs, as well as improved margins within engineered, vinyl, laminate, and tile categories due to sourcing and pricing initiatives.
Selling, general and administrative (“SG&A”) expenses in the fourth quarter of 2017 were $92 million compared to $90 million in the prior-year quarter. The increase was attributable to incremental legal and professional fees and the absence of a credit related to the stock-based element of the Company’s 2016 settlement of the securities class action lawsuit, partially offset by decreases in payroll and advertising. Certain items affecting the change in SG&A expenses are also highlighted in the attached supporting schedule. When excluding those items, Adjusted SG&A as a percentage of sales (a non-GAAP measure) decreased to 33.3% from 36.4% during the prior-year period.
