Lumber Liquidators' Stock Soars After Response To Negative Media Reports

Shares of Lumber Liquidators Inc. surged 12% in premarket trade Thursday, after the hardwood floor retailer responded to a "60 Minutes" report that China-sourced laminate contained high levels of a carcinogen, and provided a business update for the current quarter. "We stand behind our products and know they are safe," the company said in a statement. But because customers are understandably concerned after the report, the company said it will offer indoor air quality testing administered by a third party to some customers at no cost. Since the '60 Minutes' report, the company said sales fell 7.5% and about 8% of consumers said they would not consider buying from Lumber Liquidators. The company said it takes "reasonable prudent precautions" to ensure its suppliers conform to airborne toxic constrol measures. Given the fallout from the negative report, the company now expects net sales of $253.6 million to $265.6 million and same-store sales to range from a decline of 4.4% to an increase of 0.5%, compared with the FactSet consensus of $276.1 million and a 5.2% increase, respectively. "At this time, we believe our cash flow from operations, together with existing liquidity sources, will be sufficient to fund our operations and anticipated capital expenditures for the foreseeable future," the company said in a statement. The stock has tumbled 51% year to date through Wednesday, while the S&P 500 has lost slipped 0.9%.