Lumber Liquidators cuts store openings, fiscal outlook on poor Q2 sales
Toano, Va. – Lumber Liquidators reported a 7.1% decline in same-store sales and reduced its outlook for new store openings and earnings in a business update for the second quarter of fiscal 2014. Net sales for the quarter grew 2.3% to $263.1 million, from $257.1 million in the second quarter of 2013, well below Wall Street estimates of $303 million.
Based on this disappointing performance, for the full year 2014 Lumber Liquidators now expects to open 33 to 37 new store locations in the expanded showroom format, from the previous range of 35 to 40 new store locations. The retailer also scaled back its projections for full year earnings per share, net earnings and same-store sales growth. Lumber Liquidators does not expect a complete recovery from the factors impacting its performance until 2015.
“Customer traffic to our stores was significantly weaker than we expected, particularly in geographic areas severely impacted by the unusually harsh weather in the first quarter,” said Robert M. Lynch, president and CEO. “The improvement in customer demand we experienced beginning in mid-March did not carry into May, and June weakened further. Our reduced customer traffic has coincided with certain weak macroeconomic trends related to residential remodeling, including existing home sales, which have generally been lower in 2014 than the corresponding periods in 2013. We now believe the prolonged purchase cycle associated with our customers’ discretionary, large-ticket home improvement projects is likely to be delayed for some customers into the fall flooring season, and for others, into spring of 2015."
Tractor Supply Q2 sales miss forecast
Brentwood, Tenn. – Tractor Supply Co. reported sales for the second quarter of fiscal 2014 increased 8.8% to $1.58 billion, from $1.46 billion in second quarter 2013. This figure was slightly below consensus analyst estimates of $1.6 billion.
In an earnings update, Tractor Supply also reported that same-store sales increased a lower-than-anticipated 1.9%, driven by continued strength of consumable, usable and edible products (C.U.E.) and solid traffic counts. This was partially offset by weaker than expected sales of certain seasonal products primarily in the Northern regions, continued softness in the safe category and deflation. As the quarter progressed, sales trends improved and weather became less of a factor. The softness in sales was principally in the first half of the quarter with the second half being consistent with Tractor Supply’s expectations.
Tractor Supply expects second quarter net income to be below previous market estimates and also anticipates its fiscal year 2014 results will be at the low end of the previously provided guidance.
"We remain pleased with many areas of the business, including our core C.U.E. offerings and several seasonal categories; however, we were not satisfied with the overall sales of spring seasonal merchandise in the second quarter,” said Greg Sandfort, president and CEO. “The challenging spring weather conditions we experienced in the first quarter persisted even later into the second quarter than the prior year. The team responded by effectively managing inventory and increasing marketing initiatives to drive sales; and sales improved as the quarter progressed into June. Despite a solid sales trend in July to date, we cannot be assured at this point that spring seasonal sales will be fully realized. By effectively managing inventory levels and working with our vendors to develop additional sales driving initiatives, we believe we are positioned to drive sales and provide great values to our customers in the back half of the year."
World Cup boosts soccer-related U.S. e-commerce
San Jose, Calif. – For the month of June, soccer-related searches across the U.S. sites of eight international sporting goods and apparel retailers increased by 280%, compared to May. According to analysis from SLI Systems, there were more than 2.2 million U.S. soccer-related product searches from these eight e-commerce sites alone, with a corresponding boost in online shopping behavior during June for products including soccer cleats, balls, shin guards, gloves and other equipment.
June 16 was the peak day for soccer-related shopping in the U.S., the day U.S. played Ghana. In the U.S., the international teams with most consumer interest are Brazil, followed by Germany, Argentina, and the Netherlands.
The most popular search terms, in order, for the U.S., were:
• USA soccer
• Nike soccer
“Soccer is played year-round in the U.S., but recreational soccer gear tends to be purchased before fall and spring seasons,” said Tim Callan, CMO, SLI Systems. “We found (data) demonstrating the country’s increased interest in actually playing the sport. It is clear that The World Cup U.S. fanfare will continue long after Sunday’s final game.”