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Lumber Liquidators Holdings, Inc. (LL)

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10.34+0.25 (+2.48%)
At close: 04:00PM EDT
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  • O
    Ooh Blah Dee
    As someone who was there, I'll just say that today's inflation is going to be nothing like 1981, the previous record tying today's numbers. Back then, Social Security was relatively untaxed, so as it went up with inflation, the vast majority of recipients could keep their increased payments rather than see them reduced by taxes. Still smarting from the depression, the vast majority of Americans in 1981 owned no stocks and were untouched by the market's decline, and those who had savings accounts received increased interest payments that roughly paid back half of the losses from inflation. Worst of all as far as today's prospects, in 1981 help was just around the corner demographically, with the peak baby-boom year of 1959 just ready to leave school, join the workforce and add their productivity to the economy. (I'm not sure the caravans at the border are able to match up.) Not to mention the coming IT revolution that no one could have counted on.

    And before you say, like Monty Python's Black Knight, that all that sounds like a mere flesh wound, consider that today's real inflation is understated in half by hedonic adjustments that in effect ignore increasing prices as long as there's meaningless and wasteful "innovations" like gold foil on the pages of a textbook, or a car's oil gauge being LED rather than dial. (The only meaningful improvements in cars in my lifetime are crash integrity, airbags, fuel efficiency, and rust resistance.) Yet today's cars are magically cheaper than a Volkswagen back then, inflation wise, despite costing 50 times more at the sticker.

    Financial people are talking about a Lehman moment, and as one who was there, you don't want to be there. Good companies will fail for no reason other than holding the wrong paper, or being on the wrong side of government's choice of winners and losers. This may be a dip that you don't want to buy until at least two to ten years of shake-outs, financial restatements, liquidity crises, and takeovers. Plus the usual parade of Ponzi and other fraudulent schemes that are revealed en masse when liquidity dries up. Keeping your powder dry will take on a new meaning as government stretches out a massive readjustment to avoid taking the blame, like slowly peeling the band-aid off, hair by hair, rather than all at once. (And under the big index-card size band-aid are three jumbos, and under that three mediums, and so on.)

    The good news is that once you go through this, then you find that you got through it. There will be a recovery. Whether that's an engineered "supply shock" to equivalize all the excess money, or a slow grinding taking away of the money is all TBD. Hopefully we'll get through it without the rioting and starving of older people that Weimar saw.

    So buckle up, junior muppets. It'll be a bumpy ride.
  • O
    Ooh Blah Dee
    This Father's Day, the second to be forever conjoined with Juneteenth, Bob Dole's thoughts on parenting seem pertinent.

    "After decades of assault upon what made America great, upon supposedly obsolete values, what have we reaped? What have we created? What do we have? What we have in the opinion of millions of Americans is crime and drugs, illegitimacy, abortion, the abdication of duty, and the abandonment of children. And after the virtual devastation of the American family, the rock on which this country was founded, we are told that it takes a village, that is collective, and thus, the state, to raise a child. The state is now more involved than it has ever been in the raising of children, and children are now more neglected, more abused, and more mistreated than they have been in our time. This is not a coincidence. With all due respect, I am here to tell you, it does not take a village to raise a child. It - takes - a - family - to raise a child. If I could by magic, restore to every child who lacks a father or a mother, that father or that mother, I would. And though I cannot, I would never turn my back on them. And I shall, as president, promote measures that keep families whole. I am here to tell you that permissive and destructive behavior must be opposed, that honor and liberty must be restored, and that individual accountability must replace collective excuse. And I am here to say to America, do not abandon the great traditions that stretch to the dawn of our history, do not topple the pillars of those beliefs – God, family, honor, duty, country – that have brought us through, time and time and time and time again."

    All FWIW, of course.
  • O
    Ooh Blah Dee
    As foreshadowed in my previous reply, today is a potentially significant day for LL investors. Both our management and FND's will be present at the same investor conference. Don't get me wrong, nothing will be said by either party except maybe as designed to get small investors on the wrong side of the next move, or lack of a move. What's portentous is that this could be the day that FND and Richmond take their first tentative steps toward their eventual rendezvous and docking. Like in the Jim Stafford's Spiders and Snakes most of their "love will be touch and smile", but that's how some of the great corporate couplings began. Well and truly, as Brits like Charles might say. And divorces too, apparently. A little history ...Right before the formaldehyde hysteria, our former CEO Tom Sullivan hosted a Democrat fundraiser at his Miami home. I can't imagine his faux pas; maybe he spit out his Perrier like J.D. Vance. Regardless of that, around that same time, Tommy Boy went on Varney and blushed excitedly at Stuart's suggesting he run in the primary against Obama. And of course, when Tile Shoppe was in its first throes of volatility due to rumors about irrelevance and sales decline, Sullivan "cracked out of turn", as con-men say, by suggesting that it would be worth far more than its current price if acquired by LL. I don't think "three strikes" applies any long in California where it originated, but on Wall Street, no one gets away with messing with the big money.Do I think that whatever begins today will rip off small investors with an eventual bankruptcy or a take-out at a lower price? Or will some analyst recommendation vault LL's valuation to two or three times today's market cap in order to sell "kid-tested, mother-approved" ESG compliant shares to long-scared muppets?And I say, yes. Those are exactly the outcomes I predict.So listen in if you're naive enough to believe you can learn something, because unlike the annual meeting, this Baird investor conference will be broadcast. And listen in if you're so bitter that you can't stop grinding on the way first Toano, and especially Richmond has #$%$ on your trust. Just don't waste time listening for any real news; IR didn't even see fit to update the investor presentation, unless their going to dump it concurrent with the meeting.
  • O
    Ooh Blah Dee
    At 4:07, Charles has said nothing new. He's crowing about the name change, and every member of the prior management being banished. Ironically, he admits the greatest advantage is the store employees, the one part of the business least touched by the HQ nonsense.

    As far as outlook, he's shown no fear. He's said "we feel good" at least two dozen times. As far as demand he says the pros are busier than ever, and that mobility and work from home means that remodelling will never go away. He also proudly defended the separate pricing for pros vs. the hoi polloi, right after FND proudly said they don't do that. So ...

    One vibe I did pick up on is the extent to which management describes the business, and to some extent has executed the business, as some kind of flooring equivalent to Sherwin Williams. Expertise, pro loyalty, small stores, ... If the plan was to attract WB as an investor, I think that ship sailed when he hooked up with FND.

    So, now that he's finished, I'll just say that Charles was glib and not shy about tooting LL's horn. Probably worth a listen if you've lost money in LL stock. (And who hasn't?) But I don't hear any real changes from the same old ideas, except for his making obvious his contempt for the original employees and the original name. (If he had done the full monte and disrespected all the original investors from earlier than 2021, it might have generated a glimmer of enthusiasm from a new class of ESG investors, which I would welcome. But he chose not to. Maybe to avoid a shareholder lawsuit....)

    He also mentioned that they have a clean balance sheet for now, (no mention of how it got that way), but are planning to launch new stores which I feel could easily urinate away that balance sheet.

    Overall it's another nothing-burger.

    All IMHO, of course.
  • J
    $4.75 is the next level
  • O
    Ooh Blah Dee
    Since this morning, Richmond has roused themselves to upload an updated investor presentation.

    I didn't go line by line, and I'm not going to bother, so if anyone sees anything they feel that I missed, feel free.

    It feels like old news. Only new thing I picked up on is a before and after slide comparing 20-21 to 22-24 -- labeled "transformation" then "acceleration". (At least they weren't tone deaf enough to use "fundamental transformation".)

    And the only thing "accelerating" that caught my eye is a mention of brand awareness. But they may be blowing that insofar as they wrote "new brand awareness". Taken literally that might mean they plan to waste money either trying to get people to say "LL flooring" instead of Lumber Liquidators (because "LL" is the new brand) or worse trying to get people remember names like Duravana, because it's a new brand too.

    The real awareness problem is that people tune out and forget about things they buy once every ten years, and such products can waste a lot of ad money on people who are years from making that once every ten years purchase. So Richmond needs to find a cheap, effective way to keep their name in front of the general public, 99.9% of which lives on floors (except in advanced post-modern homeless-friendly cities like LA, NY and San Francisco where it's a mere 99.5%). I've suggested many times that the way to do that is through humorous ads, using the broadest possible range of cheaper channels for maximum reach. But we're in love with "Floor love", and even more infatuated with our ad agency. -- So that ain't happening.

    Parting thoughts:

    Can't never could.

    What a fool believes he sees, no wise man has the power to reason away.

    Would-a, should-a, could-a.
  • O
    Ooh Blah Dee
    A true story - As a younger more affluent man I was at my barber's and met an older less affluent man who seemed drunk. I remember it was either veteran's day or memorial day, so maybe that was why he was talking about his service time. At least every other sentence had an expletive. As I recall his telling it (more like yelling it) he had been among the first US troops shipped to Vietnam by boat, barely out of training. When their destination was revealed en route no one had heard of VietNam. He said it was then that one of the older sergeants said "I'll tell you what this means, boys. We're gonna be right in the middle of a * civil war!" (*starts with G and rhymes with Hillary's maiden name Rodham)

    Now, I knew another older man whose mind had slipped to the point of vividly reliving larger-than-life life experiences, one of which I later saw in a movie that likely debuted when he was in his 20's. And this vet in the barber shop also told his uncle's story about his WW2 unit arguing with their captain about whether to attack an equal-sized German unit or to call in artillery, with the captain ultimately overruling their fear that they might all be killed. When he asked his uncle how many guys survived, the uncle supposedly said "We all survived, except the captain." And that is a story I've since heard enough times to wonder who's reliving it, and who's retelling it.

    So my point here is not to argue over actual history, but to spark older investors into a real discussion about upcoming market and economic conditions, and about previous market "opportunities" we have lived through.

    Are investors "going to war"? Or is what's coming just a "trouble spot" no more dangerous than training at home? Any lessons to share from your long-ago investing experiences with recession, housing cycles, inflation and even maybe as far back as stagflation?

    For me, a middle-class guy, the problem was always timing - when markets were on sale, I was out of work or likely to be fired and when I had the job security and money to invest, everyone else seemed to have already bid up the market. If you haven't lived through one, it's hard to see the wisdom in "When your neighbor's out of work, it's a recession. When you're out of work, it's a depression." In other words, you think you know what's going on and what's going to happen; when it does you wonder when it's going to stop, and when it doesn't you wonder why it didn't start. You think you know what to do, and what you will do. But you really don't know how you'll react.

    And throughout it all, whatever you've experienced frames your thinking. Whatever happened before you were paying attention, no matter how often, is inconceivable.
  • O
    Ooh Blah Dee
    Credit where credit is due. I did marketing, not sales, for corporations with 100's of brands. Each brand was a business as far as its customers were concerned, and had its own problems of awareness, trial, product performance, and repeat business. So unlike Richmond, Lowes, or even Walmart, I worked on many businesses, not just a chain of look-alike store fronts with only one thing to do. (I give you one thing! One thing! ...) So I'm not an idiot. And when I see something done right, I'll say so.

    Adding customer experiences back to the website is a step in the right direction. Daubermann got that right.

    Churchill joked about counting on the Americans to do the right thing -- after trying everything else. And the French were mistrusting of their ally, snarking about Britain being willing to fight Germany to the last Frenchman.

    So don't let this one bit of praise for one thing done right, years too late, lure your money onto the sticky trap that is LL. A marketing move as obvious as returning to what worked for years -- the equivalent to the first rule of holes* -- shouldn't be remarkable. That something done right is so exceptional, is the sort of exception proves the rule -- like when Prince Charles doesn't make a fool of himself at the Jubilee.

    It's not so encouraging when you think about it. It was inevitable that LL might go back in its mind to what it once was, like a dying man's life flashing before his eyes. Sometime a rainy day will clear at sunset and a ray of sunshine will light up up the clouds just before a dark, cold night. Don't be fooled. Winter is coming, if not for every company in the stock market then certainly for large ticket, consumer discretionary companies with declining share, and a caretaker management with no interest in its customers or investors.

    Since it's been two weeks and no one has knocked on my door to arrest me for my impudence, I suppose I can safely share my experience on "annual meeting day" (which is a presumptuous title for something which was over in less time than it takes to read, much less type, this comment.

    I called IR the morning of the meeting at 9:24, no answer. At 10:23 Julie McMedon called saying that she just got out of the meeting, got my message and was sorry not to get back to me. I asked if there would be any recording or transcript of the meeting made available. She said that they had returned to in person meetings and ... I cut her off saying "so there won't been info on the meeting - no recording or transcript?" She said that there would be an xyz filing on the results and ... I cut her off again saying "that's just the votes. Then I asked "Do you feel good about that?" She paused for maybe three seconds, then said "We're not required to ..." I cut her off saying "I know it's legal to do the bare minimum, I'm asking if you feel good about that." Another shorter pause then "A lot of companies do do it this way ..." I interrupted with something like "So that makes it okay. Do you have kids?" "What?" "Sorry, I just mean to say that if you have kids, and your professional ethics is your ethics at home, then I feel sorry for them." "You're being rude and I'm ending this call."

    I guess I just want to make sure that no one mistakes my crediting them with one thing done right, for my thinking they are in anyway deserving of any small investor's money. They might eventually do one thing right, but their only vision is to struggle-bus this simplest of businesses until the last small investor is wiped out. Then they'll cash in their chips on some change of control.

    And the big short will finally have his cake and eat it too; a dessert served cold. I hope it stings his cankers and breaks his teeth as his last breath wheezes out.
  • N
    So, I have a question. I have a house full of delaminating warped garbage flooring from Lumber Liquidators. I am wondering, does anyone know of a blog for facebook group or something where people can share ideas about how to live with this junk? I mean, right now I cant let my kids play on it because it gives them splinters, and there are flakes of finish coming off of it and because it is off-gassing a kind of chemical smell. Any help appreciated!
  • O
    Ooh Blah Dee
    The meeting today is not available in any online or remote sense as far as I am aware. That, of course, is harmful to small shareholders.

    So if anyone can record or provide a transcript or even a summary of the meeting, it would be helpful to small shareholders.

    So what are the odds of that happening?
  • J
    I hope they take the tariffs off. then it's back to the 30s
  • O
    Ooh Blah Dee
    For all the good it will do, here are the questions I submitted for management. I wish I hadn't given them such softballs.

    1. At the last conference call Mr. Tyson spoke of the management team's confidence. But as a investor during Mr. Tyson's tenure, I feel nothing but shame.

    Is Mr. Tyson capable of shame? Is Nancy Taylor? Or is your experience as employees and directors fundamentally at odds with that of your investors?

    2. What would you say to critics who suggest that you've worked more for Floor&Decor's success than that of your own investors --

    By not answering their large format store model,
    By ending advertising on price and focusing on category generic ideas like "floor love"
    By wiping out LL's cost advantage of smaller stores and lower head count, with expanding SG&A to absorb all available margin?

    3. Please discuss any progress against your deferred settlement agreement with the SEC that some see as blocking any chance of a change of control? Could it not have been ended by now? When do you see it concluding? How many more stock options will it take for Management and the Board to end this value-killing agreement?
  • A
    Compensation for LL's management team is outrageously high.
  • M
    I can’t help but stop back. I completely got out of my LL position last week. There are some quality sticks that are really beat up right now that you can make a move to. I think this stock will see $6-$8 before it sees $15 again. As an example…even switch to fnd (which I did not) they will see $90 way before this stock sees $15 again. Best of luck!
  • M
    The name change to the abysmal LL Flooring is what did it to me. I took the market volatility to move 4,000 shares into companies I actually believe in. My target was $37 and I missed my chance to take it. Not chasing this disaster anymore. Zero confidence in this stock. Many lessons learned.
  • O
    Ooh Blah Dee
    Congratulations are in order for Charles Tyson and the entire Richmond crew!!!

    Thanks to their rebranding, repositioning and especially their laser-like focus on core-values and strategic pillars, they have succeeded in raising LL Flooring's PE ratio to 24.5, which translates to a 4.08% earnings yield -- very competitive with ten year treasuries at 2.92%

    How'd they do it? Well, by putting up $0.13 earnings per share last quarter, and having the wise, abundance of caution as far as guidance that might suggest that number is temporary, and the steady, unswerving commitment to the past five years' plan for the business, the projected $0.52 annualized earnings divides into the stock price of $12.80 by a factor of 24.5 times.

    Here's to Charles and team's performance and the stock options they've earned so incredibly! Winning!
  • O
    Ooh Blah Dee
    Just a reminder as we approach the annual meeting and some of you think about how you will vote on the various issues.

    The timeline below, from the Wisconsin court's website, shows the court record of events resolving the insurance lawsuit, about which we have heard nothing as of today, May 10, 2022. Note that settlement was in the works in August of 21, and the final agreement was given to the court on January 5, 2022. That's nine months, people, that they've seen fit to not utter one word to shareholders.

    But sure, go ahead and vote to approve their pay. I'll vote to treat them like they've treated me and my money.

    Court record
    Date Event
    01-05-2022 Settlement/Stipulation to Dismiss - Before Trial

    01-05-2022 Order for dismissal with prejudice

    01-05-2022 Prop. order for dismissal

    01-05-2022 Stipulation of Dismissal of Amended Complaint as to St. Paul

    12-15-2021 Order for Dismissal of Amended Complaint against DE - Federal Ins. Co. With Prejudice and Federal Ins. Co. is dismissed as a party to this action.

    12-14-2021 Party dismissed for Federal Insurance Company. Federal Ins. Co. is dismissed

    12-14-2021 Proposed Order

    12-14-2021 Stipulation of Dismissal of Amended Complaint as to Federal Ins. Co.

    11-16-2021 Notice of Withdrawal of Atty Overby for the PL - Atty Jacobs and Ragatz remain as counsel of record for the PL

    11-09-2021 Stipulation or order to dismiss party for American Guarantee & Liability Insurance Company of Amended Complaint Against DE - American Guarantee & Liability Ins. Co. With Prejudice

    11-01-2021 Stipulation or prop. order to dismiss party

    11-01-2021 Stipulation for Dismissal of Amended Complaint Against DE - American Guarantee & Liability Ins. Co., with Prejudice

    10-25-2021 Letters/correspondence from Atty Jacobs in RE - Parties have settled.

    08-11-2021 Letters/correspondence from Atty Jacobs in RE - Parties have stipulated. Closing docs to be filed.
  • O
    Ooh Blah Dee
    I think we'd all benefit from pooling our observations as to housing conditions locally and for retail in general. It'd be great to hear from Norma, even if her perceptions from Southwest Florida are from one of the stronger housing markets in the country.

    As for myself, I've seen young people with barely enough skills to assemble an IKEA bed go out and buy houses, even knowing that they won't be able to live there beyond two to three years. Lots of FOMO.

    And at the same time, I've noticed increasing discounts at the LL website, like they are trying to mash the accelerator down. Today's discounts add an extra 10-15% to what was offered just two weeks ago. Could it be that increased mortgage rates, food and energy costs are taking a bite out of flooring spending?

    Today --
    1. Save up to 20% on 200+ Floors. Shop Now
    2a/2b/2c. See how it will look in your home with up to 4 FREE Samples/Schedule a FREE installation estimate today/Need Help? Call one of our Flooring Experts today at 1-800 ...
    3. Memorial Day Sale - May 18-31/Save up to 20%/200+ Floors on Sale/Including over 100 Waterproof .../
    24 Months Special Financing*/Finance your entire flooring project, including installation.
    4. Up to 25% off Premium Underlayment/Comfortable floors, quiet floors and now up to 25% off! Complete your flooring project today with additional savings.
    5. Extra 25% off Clearance/Online and In-Store/Shop Now
    6. Thank you for your service/Military personnel receive 10% off every day/Learn more
    7. Shop by Category (eight) Hybrid/Vinyl/Hardwood/Laminate/Waterproof/Bamboo/Cork/Tile
    8. In-Home Flooring Installation Estimate for FREE
    9. We're Here to Help You Find Your Right Floor: (four panels) 2022 Spring Digital Catalog/Floor Finder/Picture It! /Free Samples
    10. Have questions about your flooring project? Call today (800) 227-4036

    Sixteen days ago on May 2nd, right before the earnings call, the home page read ...
    1. 15% off 100 floors
    2. Bellawood on sale
    3. $300 back on $3000 if installed/ or paid installation estimate
    4. 10% off Cork
    5. 18 months financing on $2000
    6. Don't wait for sale/floors under $2
    7. Shop by category (eight)
    8. Free install estimates
    9. Spring catalog "Floor Love"
    10. Picture It

    And the day before it read,
    1. Weekend Deal -- $100 off $1000
    2. Bellawood on sale
    3. Financing/zero for 24 months
    4. $300 back on a $3000 project if installed or with a paid installation estimate
    5. 10% off Cork
    6. Don't wait for sale/floors under $2
    7. Shop by Category (eight)
    8. Free installation estimate
    9. Spring catalog "Floor Love"
    10. Picture It
  • O
    Ooh Blah Dee
    The dueling theses are resilience of housing due to demographics vs. demise of discretionary and high-ticket due to food and energy inflation outstripping paycheck and portfolio inflation.

    In yet another parallel to DC, LL's turnaround is as simple as the 1st rule of holes; when you're in one, stop digging. And yet, both leaderships are paralyzed, hoping against hope that they won't have to admit a mistake, refusing to acknowledge the obvious long-term damage as they play for just one more short term win on which to retire. Back to basics is hard when you've made a career out of claiming basics are beneath your skills. Their real fear is that they aren't smart enough or tough enough to do the basics. Besides, no one who really counts wants this company to succeed. The smart people have all bet against it; outsiders have shorted it, and insiders demand maximum pay as if it was a hazardous assignment. If everyone in Richmond doesn't believe in the business, or thinks all of business is just a game of dress-up, then how can we continue to invest with them? Especially when the market is starting to run a sale on real assets with lasting businesses that are existential necessities to modern life.

    Mene, mene, tekel, upharsin.
  • A
    Single digits, really?