Net sales increased 16.8 percent $172.0 million in the quarter from $147.2 million in the third quarter of 2010. Comparable store net sales increased 3.0 percent a decrease of 5.7 percent from the third quarter of the prior year. Net sales at non-comparable stores increased $20.3 million over the prior year period. The ccmpany has opened 33 new store locations in 2011, including six opened during the third quarter. Analysts had forecast sales of $168.1 million in the quarter.
As the company previously announced, it recently entered into an agreement to acquire certain assets of Sequoia Floorings relating to Sequoia's quality control and assurance, product development and logistics operations in China. As a part of the transaction, the company established a representative office in Shanghai in October 2011, and assumed direct control of sourcing previously managed by Sequoia. Acquisition costs of approximately $0.5 million are included in SG&A expenses for the third quarter of 2011.
For the first nine months of the year net income decreased 12.5 percent to $17.8 million, or $0.63 per share compared to $20.3 million, or $0.72 per share, in the prior year period. Net sales increased 8.6% to $507.1 million in the first nine months from $467.1 million in the first nine months of 2010. Comparable store net sales decreased 3.3% for the first nine months of 2011, compared to an increase of 2.4% for the first nine months of the prior year. Non-comparable store net sales increased $55.5 million over the prior year. As of September 30, 2011, the company operated 256 stores in 46 states and Canada.
Jeffrey W. Griffiths, ceo, commented, "We made good progress on our strategic initiatives in the third quarter, despite a difficult macroeconomic environment which has caused our customers to remain cautious and price sensitive with regard to large-ticket discretionary purchases. During the quarter, we further laid the foundation for the company's long-term success by continuing our investment in our sourcing initiatives. Specifically, with the recent acquisition of certain of Sequoia's assets, we further strengthened our direct relationships with mills in China, allowing us to more efficiently and effectively control the quality and costs of products sourced in this region. We believe these enhancements will enable us to strengthen the value proposition to our customer, ultimately expanding our operating margins over the longer-term."
The company has updated its outlook for fiscal 2011 and now expects the following:
Net sales for the full year in the range of $674 million to $681 million, from the previous range of $673 million to $686 million, with fourth quarter net sales in the range of $167 million to $174 million, from the previous range of $170 million to $180 million.
The opening of seven to nine new store locations in the fourth quarter of the year, for a total of 40 to 42 new store locations in 2011.
Earnings per diluted share for the full year 2011 in the range of approximately $0.96 to $1.02, from the previous range of approximately $1.00 to $1.08, each based on a diluted share count of approximately 28.5 million shares, with fourth quarter earnings per diluted share in the range of approximately $0.33 to $0.39, from the previous range of $0.39 to $0.44.
The company also announced that Carl R. Daniels has joined as its svp supply chain, effective Oct. 31. In this position, he will oversee the company's international and domestic logistics, warehousing and distribution operations. He will report directly to Robert M. Lynch, president and coo. Daniels most recently served as svp supply chain and operations at Harbor Freight Tools, where he was responsible for all organizational operations including distribution, transportation, international consolidations and procurement. Daniels also served in executive level logistics positions at Michaels, Inc., Retail Ventures Services, Inc. and Midas International, Inc., among other retailers.
Griffiths concluded, "As we look to the remainder of the year, we believe wood flooring customers will remain cautious and price sensitive. However, we expect continued gross margin improvement in the coming months from the benefits of our sourcing initiatives. As Carl joins our team, we are pleased to add a leader with more than 30 years of extensive on-the-ground experience who will be an integral part of further developing world-class supply chain capability at Lumber Liquidators. We have a strong team in place, a unique value proposition, a profitable store model and a focus on long-term growth to deliver value to our customers and shareholders. Overall, we are well positioned to compete effectively in a highly fragmented market and excited about the future opportunities."
Report Abusive Comment