Analysts Push Lumber Liquidators for Rebranding

The recommendation comes after analysts at Morgan Stanley downgraded the flooring retailer’s stock Tuesday, its shares slid 10 percent.

They said Lumber Liquidators has struggled to achieve a sustainable improvement in sales since regulatory and product issues hit in 2015, despite the home improvement industry improving as a whole. They attributed the company’s troubles to its infamous 2015 scandal, in which a 60 Minutes report exposed the retailer for having too much formaldehyde in its Chinese-made laminate flooring.

Analysts said that the company’s main competitor, Floor & Decor Holdings Inc., is growing at a rate of 20 percent a year while expanding into new regions. LL’s stock has fallen 26 percent over the past year, while Floor & Decor’s have surged by 51 percent.

“We would reassess our rating if LL overhauls its brand more comprehensively than the current transformation plan suggests (including a potential name change for the company),” analysts wrote.

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