Lumber Liquidators (LL) is down 33% YTD and trades at a 52-week low. Last year’s optimism about the turnaround story has subsided, but the investment case isn’t dead yet. We believe that a turnaround is still possible, and that an investment in LL could make sense for patient investors with a long-term focus. The company doesn’t need to do anything different in order to reach materially higher levels of profitability, but there will be no quick fixes.

Lumber Liquidators is a retailer of hardwood flooring in North America. Its products include foreign and domestic hardwood species, engineered hardwood, laminate, resilient vinyl, bamboo, and cork flooring.

The company has been caught up in a major controversy ever since some of its laminate products sourced from China were found to have elevated formaldehyde levels, posing a major health risk to consumers.

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