Shares of Lumber Liquidators tanked by as much as 15% in early trading Tuesday after the company reported a wider-than-expected first-quarter loss.
The laminate-flooring retailer’s sales fell for the fourth straight quarter since a “60 Minutes” episode in March 2015 accused it of selling flooring with harmful levels of formaldehyde.
Lumber Liquidators’ first-quarter sales fell 10% to $234 million, while its net loss was $1.20 a share, more than the consensus forecast for a loss of $0.22, according to Bloomberg.
Last month the company reached a settlement agreement with the State of California Air Resources Board over its inquiry and was billed a $2.5 million fine. A court also ruled that the nonprofit Global Community Monitor had the burden of proving that Lumber Liquidators did not provide clear and reasonable warnings to its California consumers.
But the company is clearly still reeling from the China-sourced-flooring scandal as sales continue to decline.
The company said Tuesday that it got a third subpoena from the New York Regional Office of the Securities and Exchange Commission related to financial reporting and disclosure.
“Our sales results fell short of our expectations, but we continue to see improvement in our gross margin from the lows of 2015 driven by our strategic pricing initiatives,” CEO John Presley said in the earnings statement.
In March, hedge fund manager Whitney Tilson, who was a key source for the “60 Minutes” episode, said he had reentered his short position after covering it in December.