RICHMOND, Va. (AP) -- Hardwood flooring retailer Lumber Liquidators says higher costs related to the implementation of a new point-of-sale and inventory management system drove its net income down about 44 percent in the third quarter.
The Toano, Va., company reported earnings of $4.3 million, or 15 cents per share, for the three months ended Sept. 30, down from $7.8 million, or 28 cents per share, a year ago. But net sales increased about 5 percent in the quarter to $147.2 million. Sales at stores open at least a year fell about 6 percent.
Lumber Liquidators reported its earnings after the market closed on Wednesday, earlier than its originally scheduled Nov. 9 release date because of the difference in the results compared with what it had anticipated for the quarter, CEO Jeffrey W. Griffiths said in a conference call with investors on Thursday.
The company, with more than 215 stores in 46 states, estimated that the implementation of the systems developed by business software maker SAP resulted in about $12 million to $14 million in reduced productivity and lost sales. Transportation, as well as selling, general and administrative expenses grew during the quarter.
"The system implementation had a pervasive negative impact on execution across our operations," Griffiths said. "We are disappointed in our results. ... With that said, these are short-term issues and we continue to be highly confident in Lumber Liquidator's business model."
Despite the disruptions from the new computer system, Griffiths said the company "felt pretty good about consumer traffic and we felt pretty good about consumers responding to our value proposition."
Lumber Liquidators said consumers are responding to promotions and lower prices as the economic environment remains challenging, but its average sale during the quarter was $1,550, down only slightly from a year ago.
For the full year, Lumber Liquidators said it now predicts lower earnings of 93 cents to 99 cents per share on revenue of $618 million to $624 million.
The company opened 10 new stores during the quarter, and plans open between nine and 11 new locations by the end of the year. It also plans to enter Canada in the first quarter next year.
Copyright 2010 The Associated Press.