LL Flooring Holdings' Q4 2022 net sales of $263.9 million decreased 7.5% compared to the same period last year.
Q4 2022 gross margin of 35.9% decreased 140 basis points as a percentage of sales and Adjusted gross margin of 35.7% decreased 170 basis points as a percentage of net sales compared to the same period last year, primarily reflecting significantly higher material and transportation costs (collectively up more than 800 basis points) that the Company was able to partially mitigate through pricing, promotion and alternative country/vendor sourcing strategies.
Operating margin of 6.6% decreased 1,040 basis points compared to the Q4 of last year. Adjusted operating margin of 3.1% decreased 690 basis points compared to the Q4 of last year.
Full Year 2022
Net sales of $1,110.7 million decreased 3.6% compared to last year. Gross margin of 36.1% decreased 210 basis points as a percentage of sales compared to 2021 and Adjusted gross margin of 36.2% decreased 140 basis points as a percentage of net sales compared to 2021. Both decreases primarily reflect significantly higher material and transportation costs (collectively up more than 1,000 basis points) that the Company was able to partially mitigate through pricing, promotion and alternative country/vendor sourcing strategies.
Operating margin of 1.1% decreased 570 basis points compared to last year. Adjusted operating marginof 0.2% decreased 490 basis points compared to last year.
"2022 was a challenging year for LL Flooring. We are disappointed that we did not deliver on the net sales and profitability growth that we expected. To that end, we reported comparable store sales down 5.8% as double-digit growth in sales to Pro customers was more than offset by a decrease in sales to consumers. This was combined with an operating loss due to continued material and transportation cost headwinds impacting gross margin, and a higher cost structure reflecting the investments made in our strategic growth initiatives that we expect will generate strong returns over the longer term," said President and CEO Charles Tyson.
"In 2023, we plan to further broaden and grow our brand awareness among consumers to drive traffic, and deliver an improved customer experience across our omnichannel network to drive conversion. In addition, we are looking to improve operating efficiencies and are actively working to right-size our cost structure."
LL Flooring Holdings, Inc. is a leading specialty retailer of hard-surface flooring in the U.S.
