Lumber Liquidators (LL) has seen some excellent growth and just posted a solid quarter. The company is poised to open several new stores and it is a Zacks Rank #1 (Strong Buy), it is the Bull of the Day.

Growing Stores, Growing Revenue, Expanding Margins

When I look at a stock, I want to see growing earnings and growing revenues. When I see growing revenues I want to see quality growth and I will see that in an increasing number of stores opening. Of those new stores, I want to see higher productivity than the existing stores as management applies lessons learned. This will also serve to expand margins.

These things don't always happen, but they are happening for Lumber Liquidators. Store growth has been consistent, albeit slowing from a 20%+ pace in 2011 to a roughly 10% annual rate in 2012. More importantly there has been the idea of increased productivity from the new stores. Sales per square foot productivity based on a calculation of the difference between sales growth and comps divided by growth in square footage shows significant and steady increases in productivity.

Gross margins have grown in each quarter over the last seven quarters. That growth in margins has also led to the EBITDA line which has seen steady expansion as well. What that will lead to is significantly higher earnings per share.

Company Description

Lumber Liquidators is a specialty retailer of hardwood flooring, and hardwood flooring enhancements and accessories. The company provides various wood flooring products, including prefinished domestic and exotic hardwoods, engineered hardwoods, unfinished hardwoods, bamboo, cork, and laminates, as well as resilient flooring products. As of April 24, 2013, it operated 290 retail locations in North America. The company was founded in 1994 and is headquartered in Toano, Virginia.

LL Beats Estimates In Each Of The Last Five Quarters

Dating back to the March 2012 quarter, has beaten the Zacks Consensus Estimate in each of the last five quarters. The June 2012 quarter saw the company post $0.43, $0.14 ahead of the estimate for a 48% positive earnings surprise. The following quarter saw another twelve cent beat which translated into a 35% positive earnings surprise.

The most recent quarterly report took place on April 24. The company posted revenues of $230M and EPS of $0.57, $0.13 ahead of the $0.44 Zacks Consensus Estimate for a 29% positive earnings surprise. Revenues came in 6.6% ahead of expectations as well.

Sales per Square Foot

In the world of retail, sales per square foot is the end all and be all measurement of performance. Over each of the last five quarters, LL has posted an annual increase in sales per square foot. That rate of growth has been nothing short of impressive, with sales increasing 2.4% in 1Q12 and 11.6% in 1Q13. The quarters in-between that time also showed growth, so it was not just a sudden jolt of growth.