Q2 Earnings: Three Answers From Lumber Liquidators Holdings Inc (LL)

First, Lynch noted, Lumber Liquidators not only sources products directly from the mills which make them — a key competitive advantage in its business, allowing it to offer lower prices versus the distributor models adopted by larger competitors like The Home Depot, Inc. (NYSE:HD) and Lowe’s Companies, Inc. (NYSE:LOW) — but it also often purchases the majority of the mill partners’ capacity due to the scale of its operations. As a result, this affords Lumber Liquidators unparalleled “insight and visibility throughout the sourcing process.”

In addition to “well-designed product specifications,” then, Lynch also reiterated that Lumber Liquidators follows a “strict adherence to a set of internal standards set well above regulatory requirements,” and that “because of these standards the products we sell nationally exceed the most stringent requirements of any state.”

Lynch went on to elaborate on his company’s other quality assurance efforts, including “more than 60 professionals around the world … who perform and monitor those processes that we believe are most effectively executed on the ground at the mill,” as well as additional testing in Lumber Liquidators’ labs and in independent certified facilities.

Of course, this doesn’t mean Lumber Liquidators Holdings Inc (NYSE:LL) is completely off the hook yet, but shareholders should rest well knowing their company recognizes that the perceived quality of its products is integral to the success of the business.

Foolish takeaway
All in all, Mr. Market is right to be pleased with another solid quarter from Lumber Liquidators. With all things considered, then, and barring any significant issues with regard to the product safety issues above, I see no reason Lumber Liquidators stock won’t continue to outperform the broader indexes for now.

The article Q2 Earnings: 3 Answers From Lumber Liquidators originally appeared on Fool.com and is written by Steve Symington.

Fool contributor Steve Symington has no position in any stocks mentioned. The Motley Fool recommends Home Depot, Lowe’s, and Lumber Liquidators. The Motley Fool owns shares of Lumber Liquidators.

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