Revenues over the last two years have seen a steady depreciation, part of which management believes is due to negative press publicized in 2015 and associated with the quality of their flooring product sourced from China. Lumber Liquidators stock price has followed suit having depreciated nearly 90% over the last three years. We were curious to see how searches for the term ‘Lumber Liquidators’ have faired over the same period as a gauge of public perception of the company. We add that Lumber Liquidators do maintain a web presence and allows for e-commerce thus we suspect that searches for the term should have a bearing on the company’s ability to generate revenues.
You’ll notice that there was a spike in searches during March 2015. This had to do with the negative press release related to the company’s flooring materials. Excluding this spike, we note a peak in searches in 2013 followed by a consistent depreciation in searches interest, which was the same trajectory Lumber Liquidators share price realized, that is, peak in price in 2013 followed by a steady decline.
We note that search interest during February 2016 was approximately 13% greater than the same period last year, which goes against the overall down trend. February also happens to be the most active month for searches in any given year which would suggest that the corporate website saw an increased flow of visitors during it’s peak period. While this does not indicate a change in the overall trend, this should bode well for the corporation’s financial fortunes for Q1. Furthermore, we also note that the increase in searches during February 2016 coincides with a bullish share price which began upticking this past March.
While we can’t pin point any direct relationship between share price and google searches for the underlying corporation, we do find it promising that public interest in the company has increased in the short term and should have a positive bearing on their financial fortunes.