Lumber Liquidators Holdings, Inc. (NYSE:LL) Q3 2019 Earnings Conference Call - Final Transcript
Nov 06, 2019 • 08:00 am ET
Good morning, ladies and gentlemen, and welcome to Lumber Liquidators' Third Quarter 2019 Earnings Conference Call. As a reminder, ladies and gentlemen, this conference is being recorded and may not be reproduced in full or in part without permission from the company.
I would now like to turn the conference over to Danielle O'Brien, please go ahead.
Thank you, operator. Good morning, everyone, and thank you for joining us. Let me reference the safe harbor provisions of the US securities laws for forward-looking statements. This conference call may contain forward-looking statements that are subject to significant risks and uncertainties, including the future operating and financial performance of Lumber Liquidators. Although Lumber Liquidators believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct.
Important risk factors that could cause actual results to differ materially from those reflected in the forward-looking statements are included in Lumber Liquidators' filings with the SEC. This information contained in this call is accurate only as of the date discussed. Investors should not assume that the statements will remain operative at a later time and Lumber Liquidators undertakes no obligation to update any information discussed in this call.
Now I'm pleased to introduce Mr. Dennis Knowles, CEO of Lumber Liquidators. Dennis?
Dennis R. Knowles
Thank you, Danielle, and good morning, everyone. Today, I'm joined by Charles Tyson, our Chief Customer Experience Officer; and Nancy Walsh, our recently appointed Chief Financial Officer. We had a challenging third quarter that included soft demand in July as well as a network security incident in August. These factors led to generally disappointing overall results for the quarter and as a result, we chose to lower our annual guidance, but we are encouraged by the sales trends experienced in September, as we execute our transformation plan and make meaningful progress on many fronts.
First, in September, we took another step towards clearing the distractions caused by legacy product litigation consummating a settlement agreement in the Gold case that is consistent with the previously announced MOU and we now await the court's final approval. As we continue to put those distractions behind us, we're making continued progress in transforming our business and further differentiating ourselves in a dynamic and growing hard surface flooring marketplace.
Second, as we work to drive sustainable traffic to our stores, we developed updated creative content and launched new television ads in mid-September that are more experiential and highlight product quality and differentiated service and the great value we offer.
Third, we continue to make progress in our steps to drive gross margin by building expanded relationships with key vendors and implementing more robust vendor negotiations, identifying alternative sources for supply, and utilizing a portfolio approach to manage retail prices. Finally, we remain focused on optimizing our cost structure to support the business while identifying areas where our cost can be taken out. You'll hear more on these efforts later in our remarks.