Lumber Liquidators stock is recovering from the blow it received after a “60 Minutes” report slammed the safety of its laminated flooring.
Lumber Liquidators stock rose 13% by mid-morning Thursday, after notching a 10.6% gain Wednesday. Despite these gains, the shares are still down 50% for the year.
The hardwood flooring provider held a conference call with investors Thursday morning and released a 50-page “business update” on its safety record.
“We stand behind our products and know they are safe,” declared Lumber Liquidators, in its statement. “Because media reports provided very little context, customers are understandably concerned.”
The call was a reaction to a March 1 “60 Minutes” probe from CBS, in which CNN’s Anderson Cooper revealed that the company’s laminate flooring sourced from China contained high levels of cancer-causing formaldehyde.
The company also said that net sales dropped 7.5% in the nine days since the broadcast.
Nearly 20% of the company’s business is in laminates. The report caused the stock to plunge earlier this month. Shares dropped 25% on March 2 and was halted from trading.
In its report, the company stressed that its products are safe and downplayed the perceived dangers of formaldehyde, which is described as a “natural byproduct found in many plants and is found in virtually all homes and buildings.”
“Formaldehyde does not accumulate in the environment or in the body and is broken down quickly,” the company said.
The company also detailed its compliance process, explaining how the flooring is tested to make sure it’s compliant with California’s strict laws of formaldehyde levels.
Cooper, in his “60 Minutes” report, notes that formaldehyde is legal in flooring, but there are concerns about breathing in emissions, particularly in confined spaces like homes. He said that high levels can cause respiratory issues and some forms of cancer, including leukemia, which is why California has strict standards on it. The federal government is preparing to adopt similar standards.
His report accuses Lumber Liquidators of buying laminated flooring from China that is marked as compliant with environmental laws, even though it is not.
This isn’t the first time the company has run into trouble. Federal agents raided the company’s offices in 2013, and the company acknowledged that it was related to importing wood products.