LUMBER LIQUIDATORS (NYSE:LL) filed Annual Report for the period ended 2011-12-31.
Lumber Liquidat has a market cap of $602.4 million; its shares were traded at around $21.53 with a P/E ratio of 25.8 and P/S ratio of 1.
Highlight of Business Operations:Net Sales. Our net sales increases in recent years have primarily been a result of our store base growth. In general, we consider a store non-comparable until the first day of the thirteenth month of operation, and comparable thereafter. From 2008 to 2011, our net sales have grown 41.4% to $681.6 million. During those same three years, we opened 43.0% of our total store locations, and our non-comparable stores, as measured each year, drove our net sales increase while comparable store net sales were relatively flat. During that same time period, Catalina estimates that the wood flooring market contracted approximately 13.5%.
In both 2011 and 2010, our total net sales were significantly impacted by the initial implementation of our integrated information technology solution in August 2010. In 2011, our net sales grew 9.9% over 2010, driven by the growth in our non-comparable store net sales, which included a total net sales increase of 4.8% in comparing the first six months of 2011 to 2010, and a total net sales increase of 15.3% in comparing the second six months of 2011 to 2010. Net sales at comparable stores decreased 2.0% as a result of a 6.2% decrease in the first six months of 2011 compared to 2010, and an increase of 2.5% in comparing the second six months of 2011 to 2010.
Gross profit in 2011 increased $24.9 million, or 11.5%, to $240.7 million in 2011 from $215.8 million in 2010. Gross margin increased 50 basis points in 2011 as compared to 2010. As discussed in Highlights, this change was primarily due to the following:
The loss of productivity following our system implementation in August 2010 weakened net sales at comparable stores in the second half of 2010. As a result, we reversed a trend in quarterly net sales, which had gradually strengthened each quarter since the beginning of 2009. In the first six months of 2010, our net sales in comparable stores increased 6.7% compared to the six months ended June 30, 2009. In contrast, when comparing the third and fourth quarters of 2010 to the same six months in 2009, our net sales at comparable stores decreased 2.3%. On a quarterly basis, net sales at comparable stores decreased 5.7% in comparing the third quarters of 2010 and 2009, and increased 1.2% when comparing the fourth quarters of 2010 and 2009.
Gross profit in 2010 increased $21.2 million, or 10.9%, to $215.8 million in 2010 from $194.7 million in 2009. Gross margin decreased 95 basis points in 2010 as compared to 2009. This decrease was primarily due to increased product costs resulting primarily from the following:
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