Lumber Liquidators' net sales in the 1Q 2020 increased $1.2 million, or 0.4%, to $267 million from the 1Q 2019.
Gross profit increased 12% in the 1Q 2020 to $105 million from $94 million in the comparable period in 2019. Gross margin increased 410 basis points to 39.3% in the 1Q 2020 from 35.2% in the 1Q 2019 as margin enhancement efforts, tariff exclusions and supply chain efficiency positively impacted results. Gross margin was also aided by a mix of higher-margin manufactured products and reduced discounting in stores.
Operating income was $8.8 million for the 1Q 2020 compared to an operating loss of $3.4 million for the first quarter of 2019. Adjusted Operating Income (a non-GAAP measure) was $9.6 million for the 1Q 2020, a year-over-year increase of over $11 million compared to an adjusted operating loss $1.6 million for the 1Q 2019. The most significant driver of the increase was the impact of higher gross margin rate as described above.
Income tax benefit was $4.4 million for the 1Q 2020 compared to income tax expense of $0.2 million for the 1Q 2019. Net income for the 1Q 2020 was $12 million, or $0.42 per diluted share, compared to a net loss of $4.9 million, or $0.17 per diluted share, for the 1Q 2019.
Lumber Liquidators is one of North America's leading specialty retailers of hard-surface flooring with 420 stores as of March 31, 2020.
