Lumber Liquidators (LL) performs well - how?!


If you had to guess which company has risen 31% since its IPO in November, hardwood flooring supplier Lumber Liquidators (NYSE: LL) probably wouldn't be it.

Lumber? Doesn't that have to do with housing and construction? And isn't construction in the toilet? But somehow Lumber Liquidators has defied its industry and the broader economy, posting a first quarter gain in sales of 24% with a 93% jump in earnings.

How did they pull that one off in what should be the toughest environment in decades? According to a profile in today's Wall Street Journal [subscription], the company "sells almost solely to consumers, not home builders; it constantly shops the competition . . . it keeps costs low by placing its stores in industrial and other low-rent areas; it buys virtually all of its hardwood directly from mills; and it largely uses commissions to pay employees."

The company has ambitious expansion plans and hey, if it can grow profitably in this environment, it is definitely worth a look. This is one home improvement stock I'll be keeping an eye on.

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