Lumber Liquidators' quarterly sales fell for the fifth straight quarter as the company struggles to convince customers its hardwood flooring is safe amid fears that some of its products could cause cancer.
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The company's shares fell nearly 6 percent in light premarket trading.
Lumber Liquidators has been facing heat not just from regulators but also from consumers and shareholders after CBS's "60 Minutes" report alleged in March last year that the company had sold flooring with dangerously high levels of formaldehyde.
Sales at stores open at least a year dropped 7.2 percent in the second quarter ended June 30. Analysts on average had expected a 5.4 percent decline, according to research firm Consensus Metrix.
"We resolved several legacy regulatory issues, made good progress on resolving certain other outstanding legal matters," Chief Executive John Presley said.
The company said demand for certain product categories decreased as its assortment of products did not match changes in customer trends.
However, net loss narrowed to $12.2 million, or 45 cents per share, in the second quarter from $20.3 million, or 75 cents per share, a year earlier.
Excluding items, Lumber Liquidators posted a loss of 25 cents per share, which was in line with analysts' estimates, according to Thomson Reuters I/B/E/S.
Net sales fell 4 percent to $238.1 million, missing analysts' estimates of $240.6 million.
(Reporting by Subrat Patnaik in Bengaluru; Editing by Anil D'Silva)