Liquidators Services, LLC, Lumber Liquidators Production, LLC, and Lumber Liquidators Canada, ULC, conducting our operations.

Our Business

Market

According to the July 2020 Issue of Floor Covering Weekly, United States installed floor covering product sales in 2019 were $43.3 billion, not including labor. Within this market, United States hardwood, laminate and vinyl flooring sales accounted for 42% of the total, which is an increase of 3.3% over the same metric for 2018. Flooring sales are driven by a number of factors including discretionary income and trends in the housing market. Including installation,Based on Company estimates and our review of external economic data including existing home sales, the overall flooring industry has grown at a compound annual growth rate of 4.1% from 2015 through 2019. OverNAHB remodeling index, new housing starts and the same period, hardwood, laminate and vinylU.S. Census, we expect flooring sales includingover the costlong term to continue to benefit from aging and insufficient housing availability, rising home values and new household formations, among other factors. From 2018 through 2021, we estimate installed sales of installationhard surface flooring grew at a compound annual growth rate (CAGR) of 7.8%. We believe improvements in the quality and construction of certain products, increasing resiliency and water-tolerance of products, ease of installation, availability in9.7% compared to a broad range of retail price points, and movement away from soft surfaces will drive continued hard-surface flooring share gain versus soft surface flooring in the future.0.6% CAGR for soft-surface flooring.

Competition

We compete for customers in a highly fragmented marketplace, where we believe no onesingle retailer has captured more than a 22%15% share of the consumer market for flooring (including carpet). Althoughcarpet and area rugs) based on internal estimates as well as Catalina Research, Inc.’s Report on Floor Coverings, Annual Market Report 2022 and Floor Coverings Industry Quarterly Update, December 2023.The largest segment of the market includes the national home improvement warehouse chains, nationalis represented by independent specialty retailers warehouse clubs and online retailers, we believe nearly half of the industry consistscomprised of local one-store flooring retailers, small chains of stores that may specialize in one or two flooring categories, and a limited number of regional chains. We also compete against national home improvement warehouse chains, national specialty retailers, warehouse clubs and online retailers. We believe we offer a compelling value proposition to customers as we provide a wide selection of high-quality, stocked products and the accessible flooring expertise and service of a local store, with the scale, omnichannel convenience and value of a national chain.

Customers

We target several distinct customer groups who each have varied needs with respect to their flooring purchases, including do-it-yourself (“DIY”) customers, do-it-for-me (“DIFM”) customers, and Pro customers.consumers or Pros on behalf of consumers. We believe that each of the customer groups we serve is passionate about their flooring purchase and values our wide assortment of flooring products, availability, and the quality of those products. While our offering to each of these groups begins with the same broad assortment and knowledgeable store associates, each of these customer groups requires unique service components based on the ability of our associates to share detailed product knowledge and preferred installation methods. We offer DIFM customers installation services while our DIY and Pro customers receive more personal attention when completing their purchase, includingalso provide dedicated call center resources.resources through our customer contact center for consumers and Pros. All customer groups are offered delivery services.

Products and Services

Product Selection

We offer an extensive assortment of hard-surfacehard surface flooring under multiple proprietary brand names, led by our flagships, Bellawood®, Coreluxe®, ReNature by Coreluxe® and Coreluxe®.Duravana® brands. Duravana® is hybrid resilient flooring, which combines the best characteristics of traditional flooring and the latest technology for waterproofing. Duravana® is also eco-friendly, 100% PVC free and the MDF core is manufactured from responsibly managed forests as certified by the Forest Stewardship Council. We have invested significant resources developing these national brand names. Our hard-surfacehard surface flooring products feature a range of quality styles and on-trend designs and are generally differentiated in terms of quality and price based on wood versus manufactured materials, the wood species, grade, and durability of finish. Prefinished floors are the dominant choice for residential customers over unfinished wood planks that have a finish applied after installation. We also offer an assortment of installation services and accessories, including moldings, underlayments,underlayment, adhesives and tools. In addition to our hard surface flooring product assortment, we recently expanded into soft surface flooring and began offering carpet products. We offer an extensive selection of carpet products with a variety of features, benefits, and technologies across a wide range of price points.

Direct Sourcing

We source our hard surface products directly from millsflooring and other vendors, which enables us to offer a broad assortment of high-quality proprietary products to our customers at a consistently competitive cost. We seek to establish strong, long-term relationships with our vendors around the world. In doing so, we look for vendors that have demonstrated an ability to meet our demanding specifications, our rigorous compliance standards and the capability to provide sustainable and

growing supplies of high-quality, innovative, trend-right products. We source from both domestic and international vendors, and in 2020,2023, approximately 53%47% of our product was sourced in North America, 22% was sourced from Asia, 6%Asian countries other than China, 16% was sourced from Europe, 11% was sourced from China, and Australia, and 6%4% was sourced from South America. As alternatives have become viable,In order to reduce our costs, we have been actively moving our products subject to Section 301 tariffs from China into other mostly Asian, countries.countries, including North America. Our soft surface flooring products are sourced directly from one of the largest manufacturers and distributors of carpet in the United States, which allows us to leverage their extensive supply chain network to deliver cut carpet directly to installers without the burden of having to maintain our own distribution network for carpet.

Supply Chain

Our supply chain is wholly focused on delivering a complete assortment of products to our customers in an efficient manner. We own a one million square foot distribution center on approximately 100 acres of land in Henrico County, Virginia, which serves the stores located in the easternmost two-thirds of theeastern United States. We operate a 500,000 square foot leased distribution center in Pomona, California as

the primary distribution center for the stores located in the westernmost one-thirdwestern United States. In addition, in September 2023 the Company opened a distribution center in Dallas, Texas, with approximately 450,000 square feet of leased space. The Company is positioned to service many of its regional stores in the central United States and is expected to reduce transportation costs over time because of the United States.shorter distances to the stores. A number of our vendors maintain certain inventory levels for shipment directly to our stores or our customers. Our product is generally transported boxed and palletized, and the weight of our product is a key driver of our supply chain costs.

Compliance and Quality Control

Our compliance programs are designed to ensure the products we sell are safe and responsibly sourced, and meet all regulatory and statutory requirements, including, without limitation, requirements associated with the Lacey Act, United States Environment Protection Agency ("EPA") and the California Air Resources Board (“CARB”). LL Flooring and its parents, subsidiaries, affiliates and related parties are committed to conducting business in accordance with the highest ethical standards, in compliance with all applicable laws, and in a manner that helps ensure that the Company is environmentally and socially responsible. LL Flooring expects its vendor partners to adhere to the same high ethical standards and share the same commitment. Our vendor code of conduct, which maintains standards that must be followed by all vendors, sub-tier suppliers, subcontractors and their agents, prohibits vendors from engaging in child labor, forced labor or other human rights issues.

We utilize a variety of due diligence processes and controls, including supplier audits, periodic on-site visits, and product testing to ensure such compliance. We utilize a risk-based approach to implement and operate the various aspects of our compliance program. Our compliance program considers, among other things, product risk, the level of vertical integration at our suppliers’ mills, legality concerns noted by both private and government parties, and the results of on-site audits that we perform. Our evaluation of sourcing risk is a key component in our allocation of resources to ensure we meet our standards for product compliance and safety. Compliance and Quality Control teams located in the United States and in China are supplemented with externalindependent third-party resources that provide independent analyses,audits and inspections, which are incorporated into our review processes and monitor our sourcing efforts across all areas from which we source product. Compliance programs and functions are continually under review, updated and enhanced as appropriate to stay current with industry, statutory and regulatory requirements. Our Compliance and Regulatory Affairs Committee of the Board of Directors provides oversight of our compliance programs.

Additionally, we maintain and operate a 1,500 square foot lab within our distribution center on the east coast. The lab features two temperature and humidity controlled conditioning rooms and two emission chambers correlated to a CARB-approvedCARB- and EPA-approved Third-Party Certifier standard. We believe this equipment mirrors the requirements of CARB, EPA, and capabilities of other state-of-the-art emission testing facilities. This lab, along with our third-party providers, supports our process to ensure compliance with CARB and EPA requirements. We also maintain a lab in Shanghai which is used by our sourcing, compliance and quality assurance team to work with vendors in Asia to ensure compliance with regulatory requirements and Company quality standards.

Installation

Historically one in 10 of ourOur customers purchase professional installation services through us to measure and install our flooring at competitive prices. We offer these services at all of our stores. As of December 31, 2020, we utilizedWe utilize a network of associates to perform certain customer-facing, consultative services and coordinate the installation of our flooring products by third-party professional independent contractors. Service revenue for installation transactions that we control along with freight is included in net services sales, with the corresponding costs in cost of services sold. We believe our greater interaction with the customer and strong relationships with the third-party professional independent contractors ultimately results in a better customer experience and higher utilization of installation services by the customer.experience.

Store Model

As of December 31, 2020,2023, we operated 410437 retail stores. We opened six3 new stores and closed 158 stores in 2020, including all of our stores in Canada. We2023. Although we have certain criteria that we require for every store, we are able to adapt a range of existing buildings to our format, fromincluding freestanding buildings, to strip centers, toor small shopping centers. Our stores are typically 6,500 to 7,500 square feet. We

enter into short leases, generally for a base term of five to seven years with renewal options, to maximize our real estate flexibility.

We routinely evaluate our store site selection criteria and are currently targeting retail corridors within aan existing market over the more industrial locations we historically sought. We consistently monitor performance of current stores as well as the market opportunity for new locations, adjusting as needed to optimize the profitability and growth potential of our store portfolio.

Sales Approach

We strive to have an integrated omni-channelomnichannel sales model that enables our stores, callcustomer contact center, digital platform, and catalogs to work together in a coordinated manner. We believe that due to the average size of the sale and the general infrequency of a flooring purchase, many of our customers conduct extensive research using multiple channels before making a purchase decision. Though our customers utilize a range of these channels in the decision-making process, the final sale is most often completed in the

store, working with our flooring experts. Our DIY and DIFM customersConsumers typically plan well in advance for the inconvenience of removing old flooring and installing new flooring. Our Pros often have larger, more complex projects, and greater lead time and preparation is often required. Our research indicates that the length of a hard-surface flooring purchase can vary significantly from initial interest to final sale.

Our objective is to help the customer through the entire purchase cycle from inspiration to installation, whether in our store or in their home. Our goal is to provide our customers with everything needed to consider, and complete, their flooring project – to remove the existing floor, install the new floor with complementary moldings and accessories, and finally, maintain the floor.

Our sales strategy emphasizes customer service by providing superior, convenient, educational tools for our customers to learn about our products and the installation process. We invest in training our store team and virtual sales team members on all of our products and install techniques. Flooring samples for most of the products we offer are available in our stores or can be ordered through our digital platform or contact center. Once anWhen placing a hard surface flooring order, is placed, customers may choose to either have their purchases delivered to their home or job site or pick them up at a nearby store location. When placing a carpet order, the carpet is shipped directly to our installer warehouse and the installer delivers the carpet directly to the customer or Pro job site.

We are committed to responding to our customers in a timely manner. Our customer contact center is staffed by flooring experts cross-trained in sales, customer service and product support. In addition to receiving telephone calls, our contact center associates chat online with visitors to our digital platform, respond to emails from our customers and engage in virtual selling. Customers can contact our Customer Relationship Centercustomer contact center to place an order, to make an inquiry, or to order a catalog.

Knowledgeable Salespeople

Our goal is for a customer to walk into an LL Flooring store and immediately be greeted by a knowledgeable associate who can help make buying flooring easy. We believe a large segment of residential homeowners are in need, ofand value, a trusted expert, whether as a guide through a range of flooring alternatives and services or as a resource to both DIY and DIFM customers.throughout the installation process. We are deploying robustutilize extensive training programs to trainenable our store management and associates to serve our customers at the highest level. ThisWe continue to devote significant resources to product and sales training, which focuses on selling techniques and in-depth product knowledge for our store associates, who, we believe, are a key driver in a customer’s purchasing decision.

In a small store environment, our store managers are critical in ensuring the success of delivering against our customer experience. We place an emphasis on identifying, hiring, and empowering employeesassociates who share a passion for our business philosophy where possible. Many of our store managers have previous experience with the home improvement, retail flooring or flooring installation industries. We are also addingcontinue to invest in our regional managers and store managers in training, with a focus on strengthening promotion-from-within and certification programs to build our future store leadership.

Digital / Omni-ChannelOmniChannel

We launchedLLFlooring.com is our new digital platform, LLFlooring.com in December 2020. Thisonline and mobile-friendly sitewebsite that features inspirational and educational content, showcases our flooring in digital room scenes, highlights our digital tools like the Picture It!, Floor Visualizer and Floor

Finder and promotes our services such as the ability to schedule a free installation estimate and order free flooring samples and delivery.samples. Our digital platform containsweb experience showcases a broad range of information on our products and services, including room scenes, hi-res flooring swatches, and a comprehensive knowledge base on all things related to flooring. Customersaspects of flooring, accessories, and installation. A customer can also shop from home with a live sales associate in one of our stores through our virtual shopping experience. We also offer extensive product reviews, before and after photos from previous customer projects, style and design trends via the LL Style blog and how-to installation videos. A customer also has the ability to chat live with a flooring expert, either online or over the phone, regarding questions about a flooring purchase or installation. We continue to develop new features and functionality to assist customers, such as our Customer Relationship Management ("CRM") system we implemented in 2023 to help improve functionality, capability and information flow as well as increase automation in servicing our customers. We also offer an enhanced e-commerce experience for our Pro customers, including online ordering with exclusive Pro pricing and delivery rates on our full assortment of flooring and accessories and tailored features like Quick Re-Order to ensure they have robust tools atexpedite their disposal that are effective at helping them make the ideal flooring choice as they move between other channels.purchases.

Advertising and Financing

Advertising: We continue to utilize a mix of digital and traditional media, email and direct mail, to balance product, service and value messaging. We also utilize advertisingleverage our investments in paid, owned and earned media to build brand consideration and to educate customers on the flooring category. Overall, we proactively manage the mix of our media to ensure we efficiently drive sales while effectively building awareness of our brand value proposition.

We continue to invest in enhanced digital capabilities. We significantly pulled backprogress on our advertising spend in the second quarter of 2020 in reactionjourney to COVID-19 and have re-deployed our spend with an increasing emphasis on digital.

We have been revitalizing our brand from Lumber Liquidators to LL Flooring. Customers increasingly begin their flooring journey online. During 2020, we usedbuild awareness for the LL Flooring brand in conjunction with the Lumber Liquidators brand onsince completing our digital platform and on television to build awareness. Additionally, we piloted the brand LL Flooring in 20 plus stores during 2020. Based on early feedback, customers who experienced thephysical store rebranding. The new LL Flooring brand viewed it as more approachable, relevantpositions us to serve consumers and Pros who are looking for an unmatched combination of higher quality. We plan to expand the rebrandingexpertise and guidance, including installation services, combined with a curated assortment of our stores in 2021 as part of our long-term brand evolution.beautiful floors at a great value.

Financing:Financing

We offer our residential customers a financing alternative through a proprietary credit card, the Lumber LiquidatorsLL Flooring credit card, underwritten by a third-party financial institution, generally with no recourse to us. This program serves the dual function of providing financial flexibility to our customers and offering us promotional opportunities featuring deferred interest, which we often combine with product promotions. Our customers may also use their Lumber LiquidatorsLL Flooring credit card for installation services. We also offer our Pro

customers a financing alternative,commercial credit line, which is underwritten by a third-party financial institution, generally with no recourse to us. The commercial credit program provides our Pro customers a range of additional services that we believe add flexibility to their businesses.

Human Capital Management

Our people are the core of our business, and we commitare committed to deliver thembeing a company that fosters an inclusive, diverse teamculture and culture thatworkforce, which understands, values, and adapts to the varying needs of our associates and customers. We seek to provide ana safe, engaging work experience that excites and motivatemotivates our team members to deliver their best every day.

As of December 31, 2023, we had approximately 2,100 associates, 99% of whom were full-time and none of whom were represented by a union. Of these associates, 71% work in our stores, 22% work in corporate store support infrastructure or similar functions (including our call center associates) and 7% work in our distribution centers. We alsovalue the strong relationships that we have created with our associates and remain committed to helping them achieve both their professional and personal goals while working at the Company.

Developing our people and culture is a critical driving force behind our vision is to be the customer’s first choice in flooring by providing the best experience, subject matter expertise and commitment to excellence from inspiration to installation.

We have identified the following six guiding values as the foundation of our culture:

We aim to provide opportunities for learning and growth, to ensure our team is always the best in the business.

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We made good progress executing our transformation plan during 2020 to leverage our foundation as a high-touch specialty flooring company and deliver shareholder value. Our transformation plan includes the four strategic pillars of people and culture, improving the customer experience, driving traffic and transactions in our stores and online, and improving profitability.

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Our first strategic pillar, people and culture, is a critical driving force behind our transformation plan. Our In recent efforts have been focused in three areas: our Company’s culture and training, the safety and health of our employees; and driving diversity and inclusion.

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Culture and Training

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In 2020, we engaged the organization in reviewing the Company’s current mission, vision and values and assessing how well they are serving us today. We formalized our Company’s vision: to be the customer’s first choice in

hard-surface flooring by providing the best experience, from start to finish. We also identified the following six guiding values as the foundation of our culture:

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During 2020years, we added more regional managers to provide more localized and focused leadership by market, as well as additional store managers and store-managers-in-training to enhance our leadership structure for the present and the future, in training to build our bench of future store leadership.both the field and in the store. Our field leadership has also focused on developing a more robust store and regional manager training program that promotes both diverse and inclusive leadership as well as drivedriving greater internal career advancement. In 2023, we promoted more than 600 associates and invested substantial hours of training across the organization including launching in-person training for new store managers and store-managers-in-training to provide a richer and more rigorous experience committed to their success.

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Safety and Health

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Our commitment to the safety of our associatesembracing diversity is an essential and ongoing part of our business. We require careful attention to safety with respect to handling product in our warehouses, stores, installation and delivery processes. During COVID-19 we prioritized the safety of our associates and customers and followed rigorous standards for mask wearing, social distance and cleaning protocols. We have implemented remote work for all corporate support associates including senior management. We have significantly reduced travel and contact to help protect not only our associates but also the communities in which we live. We also provided emergency relief pay to our associates affected by COVID-19 exposure or related facility closures.

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Diversity, Equity & Inclusion

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As part of our multi-year business transformation, we are working on driving diversity, equity and inclusion across our Company. This commitment will be supported by training and awareness programs as well as focused efforts to recruit, retain, develop and promote a diverse workforce. In 2020,2021, we formedtrained our top 100 leaders on how to create a diverse workplace and how to respect each other's differences, and in 2022, we provided our associates with professional development workshops to support our Diversity, Equity Inclusion and Belonging ("DEIB") efforts through LL Academy, our online learning platform, and in person. These efforts continue in to 2023. Additionally, all associates learn the value of DEIB through in-depth online training within their first 90 days of employment.

Starting in January 2023, the Company added a Reflection & Service paid holiday. Through this new paid holiday, we are providing associates with time off for specific purposes: to observe a faith-based or cultural event that is important to them or their family, or to volunteer in service with a non-profit or community resource group on behalf of an at-risk population. Additionally, in January 2024, the Company launched a paid parental leave program to support new mothers and fathers in the workforce.

The Company also has a commitment to increase diverse representation by 8% at all levels within the organization. In the past year, we have increased our women’s leadership in VP-and-above roles by 4%, Director level roles by 12% and Supervisory roles by 6%. BIPOC leadership has also risen in the past year with a 13% increase in VP-and-above roles.

Our Diversity, Equity & Inclusion Taskforce,Committee, comprised of a cross-functional teamdiverse group of associates, is helping to begin this important work. This team has been discussing the Company’s culture survey results, sharing ideas onensure associates can thrive and grow professionally. They continue to connect our work with best practices and insights to drive what diversity, equity and inclusion should look like in our Company, formulating goals and establishing priorities for 2021 and beyond. We are also working with external consultants to connect our work with best practices and insights related to diversity, equity and inclusion.Company.

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Employees

As of December 31, 2020, we had approximately 2,230 employees, 95% of whom were full-time and none of whom were represented by a union. Of these employees, 72% work in our stores, 19% work in corporate store support infrastructure or similar functions (including our call center employees) and 9% work in one of our distribution centers. We believe that we have good relations with our employees.

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Seasonality and Quarterly Results

Our quarterly results of operations can fluctuate depending on the timing of our advertising and the timing of, and income contributed by, our new stores. Our net sales fluctuate slightly as a result of seasonal factors, and we adjust merchandise inventories in anticipation of those factors, causing variations in our buildbuildup of merchandise inventories. Generally, we experience higher-than-average net sales in the spring and fall, when more home remodeling activities typically are taking place, and lower-than-average net

sales in the colder winter months and during the hottest summer months. Our 2020 results were impacted by the COVID-19 pandemic,In 2023 and starting at the of March 2020to date in 2024, the Company closed as many as 56 stores for a period of time while all other stores operated under reduced hours and/or warehouse only conditions, offering curbside pickup and job site delivery for our Pro and DIY customers. The unfavorable impact of COVID-19 on the first half of 2020 was largely offset by favorable sales growthcontinues to navigate uncertainty in the second half of 2020.macroeconomic environment due to low consumer confidence, inflation, volatile mortgage rates impacting housing affordability and lower existing home sales.

Intellectual Property and Trademarks

We have a number of marks registered in the United States, including LLFlooring®, Floor Love™, Lumber Liquidators®, Floor Finder®, Duravana™, Bellawood®, 1-800-1‑800‑HARDWOOD®, Quickclic®, Virginia Mill Works Co. Hand Scraped and Distressed Floors®, Dream Home Laminate Floors®, Builder’s Pride®, Avella®, Coreluxe®, Tranquility Resilient Flooring®, Lisbon Cork Co. Ltd. ®, R.L. Colston & Sons Hardwood Flooring ®, Clover Lea Plantation ®, ReNature™, AquaSeal ™™, Dual Defense™ and other product line names. We have also registered certain marks in jurisdictions outside the United States, including the European Union, Canada, China, Australia and Japan. We regard our intellectual property as having significant value and these names are an important factor in the marketing of our brands. Accordingly, we take steps intended to protect our intellectual property including, where necessary, the filing of lawsuits and administrative actions to enforce our rights. Depending on the country, trademarks remain valid for as long as they are in use or their registration status is maintained. Trademark registrations generally are renewable for fixed terms.

Government Regulation

We are subject to extensive and varied federal, provincial, state and local government regulations in the jurisdictions in which we operate, including laws and regulations relating to our relationships with our employeesassociates and customers, independent third-party installers, public health and safety, zoning, accommodations for persons with disabilities, and fire codes. We are also subject to a number of compliance obligations pursuant to various settlement agreements we have entered into over the past few years. We operate each of our stores, offices and distribution centers in accordance with standards and procedures designed to comply with all applicable laws, codes, licensing requirements and regulations. Certain of our operations and properties are also subject to federal, provincial, state and local laws and regulations relating to the use, storage, handling, generation, transportation, treatment, emission, release, discharge and disposal of hazardous materials, substances and wastes and relating to the investigation and cleanup of contaminated properties, including off-site disposal locations. We do not currently incur significant costs complying with the laws and regulations related to hazardous materials. However, we could be subject to material costs, liabilities or claims relating to compliance in the future, especially in the event of changes in existing laws and regulations or in their interpretation, as well as the passage of new laws and regulations.

Our suppliers are subject to the laws and regulations of their home countries, as well as those relative to the import of their products into the United States, including, in particular, laws regulating labor, forestry and the environment. Our suppliers are subject to periodic compliance audits, onsite visits and other reviews, as appropriate, in efforts to ensure that they are in compliance with all laws and regulations. We also support social and environmental responsibility among our supplier community and our suppliers agree to comply with our expectations concerning environmental, labor and health and safety matters. Those expectations include representations and warranties that our suppliers comply with the laws, rules and regulations of the countries in which they operate.

Products that we import into the United States and, formerly, Canada are subject to laws and regulations imposed in conjunction with such importation, including those issued and/or enforced by United States Customs and Border Protection and the Canadian Border Services Agency.Protection. In addition, certain of our products are subject to laws and regulations relating to the importation, acquisition or sale of illegally harvested plants and plant products and the emissions of hazardous materials. We work closely with our suppliers to understand their compliance applicable laws and regulations in these areas.

Available Information

We maintain a website at LLFlooring.com. The information on or available through our website is not, and should not be considered, a part of this annual report on Form 10-K.10‑K. You may access our annual reports on Form 10-K,10‑K, quarterly reports on Form 10-Q,10‑Q, current reports on Form 8-K8‑K and amendments to those reports, as well as other reports relating to us that are filed with, or furnished to, the United States Securities and Exchange Commission (“SEC”) free of charge on our digital platform www.investors.LLFlooring.comhttps//investors.llflooring.com/overview/default.aspx as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. The SEC also maintains an Internet site, www.sec.gov, which contains reports, proxy and information statements, and other information that we file electronically with the SEC.

The information contained on or connected to our website is not incorporated by reference in this report and should not be considered part of this or any other report that we file with or furnish to the SEC.​

Item 1A. Risk Factors.

The risks described below could materially and adversely affect our business, results of operations, financial condition and cash flows. These risks are not the only risks that we face. Our business operations could also be affected by additional factors that apply

generally to companies operating in the United States and globally, as well as other risks that are not presently known to us or that we currently consider to be immaterial.

Risks Related to Our Business Operations

The ongoing COVID-19 pandemic has disrupted,Reduced consumer spending due to slower economic growth, economic recession, inflation, higher interest rates, and may continue to disrupt, our business, whichconsumer sentiment could adversely affect demand for our financial performanceproducts, our sales and our profit margins.

The effects of the ongoing COVID-19 pandemic have includedWe face a volatile retail environment and could continuechanging economic conditions, including but not limited to include disruptionsslower economic growth, inflation, a volatile interest and mortgage rate environment and lower existing home sales, which may further adversely affect consumer demand and spending. General economic conditions may result in continued inflation, which may increase our exposure to higher costs and may decrease consumer demand. If we are unable to offset these cost increases by price increases, growth, and/or cost reductions in our supply chain, disruptions or restrictions on the ability of many of our employees to work effectively, including because of illness, quarantines, government actions, facility closures oroperations, these inflationary and other restrictions, as well as temporary closures of certain of our showrooms, or the facilities of our customers or suppliers. The inability of our suppliers to meet our supply needs in a timely manner could cause delays in delivery to our customers, which could result in the cancellation of orders, customers’ refusal to accept deliveries, discounts to selling prices, and termination of customer relationships, any of whichgeneral cost increases could have a material adverse effect on our business, financial condition, results of operationsoperating cash flows, profitability, and liquidity. Even if we are able to find alternate sources for our supply needs, they may cost more, which could adverselyThe impact our profitability and financial condition.

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In addition, the ongoing COVID-19 pandemicof price increases resulting from current economic conditions has resulted in a widespread health crisisdecrease in our transactions. Should current economic conditions continue to weaken, consumer sentiment and demand for our products could deteriorate which could adversely affect our sales and our profit margins.

Our success dependsupon the ability to attract, develop and retain highly qualified associates.

We believe that is adversely affectingour success has depended and continues to depend on the economiesefforts and financial marketscapabilities of many countries. It has disruptedour associates. If we fail to hire, train, manage, and retain qualified associates with expanded skill sets or the worldwide transportation network leadingcapabilities of delivering on strategic objectives, we could lose sales to less predictable inventory flow. There remains a great deal of uncertainty related to COVID-19, including risks from renewed shutdowns due to COVID-19, continued transportation disruptions,our competitors, and consumer spending preferences once, and if, people become more mobile during 2021 as vaccines are distributed and administered. The extent to which the ongoing COVID-19 pandemic could impact our business,labor costs, results of operations, financial condition and liquidity is highly uncertain and will depend on future developments, including consumer demand for home improvement onceor the vaccine becomes widely available. The potential impacts to the Company likely will notexecution of growth strategies could be fully recoverable.

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The ongoing COVID-19 pandemic is a highly fluid and rapidly evolving situation, and we cannot anticipate with any certainty the length, scope, or severity of such restrictions in each of the jurisdictions that we operate.

negatively affected. Our growth strategy depends in part on our ability to open new stores andmeet our labor needs while controlling labor costs is subject to many unpredictable factors.external factors including market pressure on wage rates, the size and health of the labor market and our reputation within the labor market. Many associates are in entry-level roles supporting the store warehouse with historically high turnover rates, which has led to increased training and retention costs, particularly in a competitive labor market. Further, our ability to successfully execute organizational changes, including management transitions within the Company's senior leadership, is critical to our business success. We may not be able to achieve our operational goals if we are unable to attract, develop and retain qualified associates by providing competitive compensation and benefits and an engaging work experience for an inclusive, diverse team and culture. In order to deliver on our vision is to be the customer’s first choice in hard and soft surface flooring by providing the best experience, from inspiration to installation, our distributed operations are reliant upon different store managers and regional managers to motivate people. Our store associates must have expanded skill sets, and if we are unable to hire, train, manage, and retain qualified associates, it may result in inconsistent execution among different stores/different regions based on available labor force.

AsIncreased transportation costs could harm our results of December 31, 2020, we had 410 stores throughout the United States. Assuming the continued successoperations.

The efficient transportation of our store modelproducts through our supply chain is a critical component of our operations. If the cost of fuel or other costs, such as duties and real estate strategy, we planinternational container rates rise, it would result in increases in our inventory and cost of sales due to additional transportation charges and fees. Additionally, there are a limited number of delivery companies capable of efficiently transporting our products from our suppliers. Consolidation within this industry could result in increased transportation costs. A reduction in the availability of qualified drivers and/or an increase in driver regulations could continue to increase our selective approachcosts. International events in any region could impact our ability to future openings overtransport goods or increase our costs. We may be unable to increase the next several years. This growth strategy and the investment associated with the developmentprice of each new store mayour products to offset increased transportation charges, which could cause our operating results to fluctuatedeteriorate. Even as transportation costs moderate, the trailing costs are included in our inventory values, which may result in elevated inventory and costs of goods sold as inventory turns.

Failure to achieve key elements of our growth strategy could prevent us from increasing revenues or returning to profitability.

Our growth strategy is based primarily upon increased utilization of our new Customer Relationship Management ("CRM") system to generate more sales opportunities, expanding our carpet offering across our store portfolio, and growing sales service to the Pro customer:

Our future results and ability to implement our growth strategy will depend on variousthe factors includingabove. Our growth strategy and the following:

Failure to manage our growth effectively could harm our business and operating results.

Our plans call forWe have made and continue to make technology investments, including in our selective approach in the addition of new stores over the next several years, and increasedCRM system, designed to increase orders from our digital platform, callcustomer contact center and catalogs.dedicated Pro sales team. Our existing management information systems, including our store management systems, enterprise reporting platform, compliance procedures and financial and reporting controls, may be unable to support our expansion. Managing our growth effectively will require us to continue to enhance these systems, procedures and controls and to hire, train and retain regional and store managers and personnel for our compliance, IT, human resources and financial and reporting departments. We may not respond quickly enough to the changing demands that our expansion will impose on us. Any failure to manage our growth effectively could harm our business and operating results.

Increased transportation costs could harmOur growth initiative to expand carpet to the product assortment in our resultsstores may not generate the projected revenues or may not deliver the desired level of operations.profitability.

The efficient transportationPart of our productsgrowth strategy is dependent upon our ability to attract and retain customers through our supply chain isthe offering of an expanded product assortment. Adding carpet as a critical component of our operations. If the cost of fuel or other costs, such as duties and international container rates rise it could result in increasesnew flooring option in our coststores was intended to enhance our overall product assortment, complement our existing product offerings and ultimately reach new areas of sales dueconsumer demand and preference. If customer acceptance of this new product offering fails to additional transportation charges and fees. Additionally, there are a limited number of delivery companies capable of efficiently transportingalign with our products from our suppliers. Consolidation within this industry could result in increased transportation costs. A reduction in the availability of qualified drivers and an increase in driver regulations could continue to increase our costs. Transportation costs, both international and domestic, may increase due to the global supply chain disruptions as a result of strong demand for inventory, which have been and may continue to be impacted by any changes in COVID-19 conditions. Weexpectations, we may be unable to increaserealize the priceadded revenues or profitability we projected from the investment in this diversified product offering. In addition, carpeting options may decrease sales of our hard surface products, to offset increased transportation charges, which could causeand our operatingfinancial position, liquidity, and results to deteriorate.of operations may be adversely affected.

Damage, destruction or disruption of our distribution centers could significantly impact our operations and impede our ability to distribute certain of our products.

We have twothree distribution centers whichthat house products for the direct shipment of flooring to our stores. If eitherany of our distribution centers or our inventory held in those locations were damaged or destroyed by fire, tornado, flooding, wood infestation or other causes, our distribution processes would be disrupted, whichdisrupted. If the major highways or railways leading to and from our distribution centers were shut down due to weather or infrastructure conditions, our distribution processes would also be disrupted. Competition for premium warehousing space could affect our operating costs and distribution strategy. Any of these disruptions to the distribution centers could cause significant delays in delivery. This could impede our ability to stock our stores and deliver products to our customers and cause our net sales and operating results to deteriorate.

Our representative office in China may present increased legal and operational risks.

We have a representative office in Shanghai, China to facilitate our product sourcing in Asia. We have limited experience with the legal and regulatory environments and market practices outside of the United States. We may incur increased costs in complying with applicable Chineselocal-country laws and regulations as they pertain to our products, operations and related activities. Further, if we fail to comply with applicable Chinese laws and regulations, we could be subject to, among other things, litigation and government and agency investigations. Our operational results and sourcing strategy could be adversely affected by a worsening of relations between the U.S. and China, increasing political tensions related to Taiwan, or changes in Chinese law related to our ability to operate a representative office.

We cannot predict the extent to which the U.S. or other countries will impose new or additional quotas, duties, tariffs, taxes or other similar restrictions upon the import or export of our products in the future, nor can we predict future trade policy or the terms of any renegotiated trade agreements and their impact on our business. Tariffs and the possibility of an escalation or further developments of current trade conflicts, particularly between the U.S. and China, could continue to negatively impact global trade and economic conditions in many of the regions where we do business. This could result in continued significant increases in our product costs. In addition, it may adversely impact demand for our products.

Failure to effectively manage our third-party installers may present increased legal and operational risks.

We manage third-party installersprofessional independent contractors who provide installation services to some of our customers. In some jurisdictions, we are subject to regulatory requirements and risks applicable to general contractors, which include management of licensing, permitting and quality of our third-party installers. We have established procedures designed to manage these

requirements and ensure customer satisfaction with the services provided by our third-party installers. If

we fail to manage these procedures effectively or provide proper oversight of these services, we may be subject to regulatory enforcement and litigation, and our net sales, and our profitability and our reputation could be harmed.

Our success dependsupon the retention of our personnel.

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We believe that our success has depended and continues to depend on the efforts and capabilities of our employees. The loss of the services of employees if we are unable to provide competitive compensation and benefits, an engaging work experience for an inclusive, diverse team and culture or due to any negative market or industry perception, our stock price, and/or litigation may prevent us from achieving operational goals and harm our reputation.

Unfavorable allegations, government investigations and legal actions surrounding our products or us could harm our reputation and impair our ability to grow or sustain our business.

We have beenhistorically were involved in a number of government investigations and legal actions, many of which have resulted from unfavorable allegations regarding our products and us. Negative publicity surrounding these government investigations and legal actions could continue to harm our reputation and the demand for our products. Additional unfavorable allegations, government investigations and legal actions involving our products and us could also affect our perception in the market and our brands and negatively impact our business and financial condition. For instance, unfavorable allegations with certain regulators surrounding the compliance of our laminates that had previously been sourced from China has negatively affected and could continue to negatively affect our operations. If this negative impact is significant, our ability to maintain our liquidity and grow or sustain our business could be jeopardized. The cost to defend ourselves and our former employees has been and could continue to be significant.

We are involved in a number of legal proceedings and, while we cannot predict the outcomes of these proceedings and other contingencies with certainty, some of the outcomes of theseFuture litigation or governmental proceedings could adversely affectresult in material adverse consequences, including judgments or settlements, negatively affecting our business, financial condition and financial condition.results of operations.

We are, orhave been in the past, and in the future may become, involved in legal proceedings, government and agency investigations, andlawsuits, including consumer, commercial, employment, tort and other litigation, (see discussionregulatory inquiries, and governmental and other legal proceedings arising out of Legal Proceedings in Item 8. Note 10 to the consolidated financial statements). While we have accrued for material liabilities in connection with certainordinary course of our business. Some of these proceedings we cannot predict with certaintymay raise difficult and complicated factual and legal issues and can be subject to uncertainties and complexities. The timing of the ultimate outcomes. The outcome of some of thesefinal resolutions to lawsuits, regulatory inquiries and governmental and other legal proceedings is typically uncertain. Additionally, the possible outcomes of, or resolutions to, these proceedings could include adverse judgments or settlements, either of which could require us to take actions which could be costly to implement or otherwise negatively affect our operations or could require us to pay substantial amounts of money that could have a material adverse effect on our liquidity, financial condition and results of operations and could affect our ability to obtain capital or access our revolving loan and continue as a going concern. Additionally, defending against lawsuits and legal proceedings involves significant expense and diversion of management’s attention and resources.payments.

Our overall compliance program, including the Lacey Compliance Plan, is complex and costly to maintain. A failureFailure to manage theseour compliance programs could adversely affect our ability to conduct business, result in significant fines and other penalties, damage our brand and reputation, and consequently negatively impact our financial position and results of operations.

As disclosed in October 2015,The nature of our products and business is such that we reachedhave to comply with a settlement with the United States Departmentcomplex set of Justice (“DOJ”) regarding our compliance withstandards, including but not limited to the Lacey Act. In connectionAct, consumer and product safety, environmental regulations. We operate our business in accordance with that settlement, we agreedstandards and procedures designed to implement the Lacey Compliance Plan, and we were subject to a probation period of five years. Our implementation of the Lacey Compliance Plan, together with requirements resulting from other settlement agreements we have entered into over the past few years (including the Deferred Prosecution Agreement (the “DPA”) with the United States Attorney’s Office for the Eastern District of Virginia (the “U.S. Attorney”) and the DOJ entered into on March 12, 2019), was costly. In the event we breach the DPA, there is a risk the U.S. Attorney and the DOJ would seek to impose remedies provided for in the DPA, including criminal prosecution. Further, the failure to properly manage our overall compliance program and fully comply with the obligations imposed upon us byapplicable laws and regulations in these various settlement agreementsareas and work closely with our suppliers in order to comply with such laws and regulations. Compliance can require timely and costly procedures including but not limited to tracing raw materials, testing against emission standards, and maintaining vigorous quality assurance standards. If we violate or implementare alleged to have violated these laws, we could incur significant costs, be liable for damages, experience delays in shipments of our products, be subject to fines, penalties, criminal charges or other legal risks, or suffer reputational harm, any of the compliance requirements arising from these obligationswhich could reduce demand for our products and adversely affect our abilitybusiness, financial condition and operating results. In addition, there can be no assurance that such laws or regulations will not become more stringent in the future or that we will not incur additional costs in the future in order to conduct business, result in significant

fines and other penalties, damage our brand and reputation and negatively impact our financial position and results of operations.

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Our insurance coverage and self-insurance reserves may not cover existing or future claims.

WithIn the large numberordinary course of recent cases and government investigations,business, we may be required to defend ourselves andincur property, casualty or other losses not covered by our officers, directors and former employees and we may be subject to financial harm in the event such cases or investigations are adversely determined and insurance coverage will not, or is not sufficient to, cover any related losses.insurance. We maintain various insurance policies, including directorsdirectors' and officersofficers' insurance, as well as the following:

For policies under which we are responsible for losses, we record a liability that represents our estimated cost of claims incurred and unpaid as of the balance sheet date. Unanticipated changes may produce materially different amounts of expense than those recorded, which could adversely impact our operating results. Additionally, our experience could limit our ability to obtain satisfactory insurance coverage, subjecting us to further loss, or could require significantly increased premiums.

The cost of our employee health care benefit program may increase in the future.

We maintain an employee benefits program that provides self-insured and insured coverage to employees that meet the applicable requirements under the program. Employees can elect to enroll dependents that meet eligibility criteria. Coverage includes health, dental, vision, short- and long-term disability, life insurance and other voluntary ancillary benefits. Employees share in the cost of other coverage at varying levels. The Company has historically funded a majority of the cost of health benefits.

The Company routinely reviews its health benefit plans to assure conformity with government regulations and competitiveness within our industry. Approximately 75% of eligible employees elect to participate in our health benefit plans. In the future,

proportionately more employees may elect to participate in our health benefit plans. We are unable to reliably predict to what extent, if any, the percentage of eligible employees who elect health care coverage will increase in the future. Because we fund a majority of the cost of health benefits, our financial accounting expense will increase to the extent that additional employees elect to participate in the Company’s health benefit plans.

Also, medical inflation has historically tended to outpace general inflation. We are unable to reliably predict the extent to which future medical inflation will outpace general inflation. Additionally, because our medical benefit program is self-insured, an unusual incidence of large claims may cause our costs to unexpectedly increase.

Federal, provincial, state or local laws and regulations, including tariffs, or our failure to comply with such laws and regulations and our obligations under certain settlement agreements related to our products could increase our expenses, restrict our ability to conduct our business and expose us to legal risks.

We are subject to a wide range of general and industry-specific laws and regulations imposed by federal, provincial, state and local authorities in the countries in which we operate, including those related to tariffs, customs, foreign operations (such as the Foreign Corrupt Practices Act), truth-in-advertising, consumer protection, privacy, zoning and occupancy matters as well as the operation of retail stores and warehouse,warehouses, production and distribution facilities and provision of installation services. In addition, various federal, provincial and state laws govern our relationship with and other matters pertaining to our employees,associates, including wage and hour-related laws. If we fail to comply with these laws and regulations, we could be subject to legal risk, our operations could be impacted negatively, and our reputation could be damaged. Likewise, if such laws and regulations should change, our costs of compliance may increase, thereby impacting our results and our profitability.

Certain portions of our operations are subject to laws and regulations governing hazardous materials and wastes, the remediation of contaminated soil and groundwater, and the health and safety of employees.associates. If we are unable to comply with, extend or renew a material approval, license or permit required by such laws, or if there is a delay in renewing any material approval, license or permit, our net sales and operating results could deteriorate or otherwise cause harm to our business.

With regard to our products, we spend significant resources in order to comply with applicable advertising, importation, exportation, environmental and health and safety laws and regulations. If we should violateViolations of these laws and regulations, we could experiencehave in the past and may in the future result in delays in receipt of shipments of our goods, be subject to fines, penalties, criminal charges, or other legal risks, be liableliability for costs and damages, or suffer reputational harm, which could reduce demand for our merchandise and hurt our business and results of operations. Further, if such laws, regulations, and regulationstariffs should change, including those relating to antidumping and countervailing duties, we may experience increased costs in order to adhere to the new standards.

Actions of activist or dissident shareholders could impact the pursuit of our business strategies and adversely affect our results of operations, financial condition, or share price.

We value constructive input from investors and regularly engage in dialogue with our shareholders regarding strategy and performance. Our board of directors and management team are also subjectcommitted to acting in the best interests of all shareholders. The actions taken by our board of directors and management in seeking to maintain constructive engagement with certain shareholders, however, may not be successful.

We strive to maintain constructive, ongoing communications with all shareholders and we welcome constructive input from all shareholders toward the shared goal of enhancing stakeholder value. Nonetheless, we may not be successful in engaging constructively with one or more shareholders, and any resulting activist campaign that contests, or seeks to change, our strategic direction or business mix could have an adverse effect on us because: (i) responding to a numberproxy contest or other actions by activist or dissident shareholders could disrupt our business and operations, be costly or time-consuming, or divert the attention of settlement agreements that impose certain obligations on us with respectour board of directors or senior management from the pursuit of business strategies, which could adversely affect our results of operations or financial condition; (ii) perceived uncertainties as to our future direction may lead to the operationperception of a change in the direction of the business, instability, or lack of continuity, any of which may be exploited by our competitors, cause concern to our current or potential customers, cause concern in the minds of our business. If we failemployees and lead to comply withthe departure of critical employees, result in the loss of potential business opportunities, or make it more difficult to attract and retain qualified personnel and business partners; and (iii) these obligations, we may experience additional coststypes of actions could cause significant fluctuations in our share price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and expenses and could be subject to additional legal risks.prospects of our business.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Overview

Lumber Liquidators (“LL Flooring” or “Company”)Flooring is one of North America’sthe leading specialty retailers of hard-surface flooring in the U.S. with 410437 stores as of December 31, 2020. We seek2023. Our Company seeks to offer the best customer experience online and in stores, with more than 400500 varieties of hard-surfacehard and soft-surface floors featuring a range of quality styles and on-trend designs. Our online tools also help empower customers to find the right solution for the space they’ve envisioned. Our extensive selection includes water-resistantwaterproof hybrid resilient, waterproof vinyl plank, solid and engineered hardwood, laminate, bamboo, porcelain tile, and cork, with a wide range of flooring enhancements and accessories to complement. In addition, the Company also began offering carpet during 2023, with 84 store locations offering carpet as of the end of the fourth quarter and plan to rollout carpet to a majority of ours stores by the end of 2024. Our stores are staffed with flooring experts who provide advice, proPro partnership services, and installation options for all of LL Flooring’sour products, the majority of which isare in stock and ready for delivery. We offer delivery and in-home installation services through third-party independent contractors for customers who purchase our floors.

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Our vision is to be the customer’scustomers' first choice in hard-surfacehard and soft surface flooring by providing the best experience, from start to finish. We offer a wide selection of high-quality, stocked products and the accessible flooring expertise and high-touch service of a local store, combined with the scale, omni-channelvalue, omnichannel convenience and value

product availability of a national chain.brand. We plan to leverage this advantage to differentiate ourselves in the highly fragmented flooring market.We launched our new digital platform, LLFlooring.com, in December 2020. This mobile-friendly site features inspirational content, highlights our digital tools like Picture It! and Floor Finder and promotes our services such as installation, free flooring samples and delivery.

To supplement the financial measures prepared in accordance with GAAP, we useU.S. generally accepted accounting principles (GAAP), the Company uses the following non-GAAP financial measures: (i) Adjusted Gross Profit; (ii) Adjusted Gross Margin; (iii) Adjusted SG&A; (iv) Adjusted SG&A as a percentagePercentage of sales;Net Sales; (v) Adjusted Operating (Loss) Income; (vi) Adjusted Operating Margin; (vii) Adjusted EarningsOther Expense; (viii) Adjusted Other Expense as a Percentage of Net Sales; (ix) Adjusted (Loss) Earnings; and (viii)(x) Adjusted (Loss) Earnings per Diluted Share. TheThese non-GAAP financial measures should be viewed in addition to, and not in lieu of, financial measures calculated in accordance with GAAP. These supplemental measures may vary from, and may not be comparable to, similarly titled measures by other companies.

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The non-GAAP financial measures are presented because management and analysts use thesewe believe the non-GAAP financial measures provide useful information to evaluatemanagement and investors regarding certain financial and business trends related to our financial condition and results of operations, These measures provide an additional tool for investors to use in evaluating our ongoing operating performance, and management, in certain cases, uses them to determine incentive compensation and/or to address questions it receives. Therefore, we believe that the presentation of non-GAAP financial measures provides useful supplementary information to, and facilitates additional analysis by, investors.compensation. The presented non-GAAP financial measures exclude items that management does not believe reflect our core operating performance, which include regulatory and legal settlementsincremental costs of sales and associated legal costs related to disruptions to supply chain and operating costs,other trade regulations and changes in antidumping and countervailing duties, from prior periods, as such items are outside of our control or due to their inherent unusual, non-operating, unpredictable, non-recurring,non-routine, or non-cash nature.

Reconciliations of these non-GAAP financial measures are provided on the pages that follow (certain numbers may not sum due to rounding).​

Executive Summary

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Fiscal 2020 was a dynamic and challenging year

Executive Summary

We continue to navigate uncertainty in the macroeconomic environment due to low consumer confidence, inflation, an elevated interest and mortgage rate environment and lower existing home sales. Despite external headwinds, we remain confident in our ability to deliver the uncertainties aroundhigh-touch service of an independent flooring retailer combined with the COVID-19 pandemic. Despite COVID-19,value, assortment, and convenience of a national brand.

Our results for the fourth quarter 2023 continued to be negatively impacted by the macroeconomic environment, as well as internal challenges that we were ableare focused on as we execute against our strategic initiatives. To that end, we remain committed and continue to progressexecute on our brand transformation plan to elevatestrategy and our five strategic initiatives, which include: growing our Pro business; driving customer engagement through our CRM system; increasing our brand awareness; driving product innovation and the experience for allexpansion of our customers which positioned us to take advantage ofcarpet; and ensuring a robust home improvement spending environment in the second half of the year. Our transformation plan includes the four strategic pillars of people and culture, improving theconsistent customer experience driving traffic and transactions inacross all our stores and online,our omnichannel network. We believe each initiative will improve sales productivity and improving profitability.profitability long term.

​First, we are focusing investments on our top growth priorities to drive sales, including further harnessing the capabilities of our CRM system which now implemented creates repeatable daily ongoing retail processes that will generate more sales opportunities, expanding our carpet offering across our store portfolio, and delivering exceptional service to the Pro customer.

HighlightsWe continue enhancing our omnichannel brand campaign as we continue to focus on growing our brand awareness. Further, we believe brands that are innovating and creating new products will win in the long term, and we continuously build on the strengths of our merchandising and sourcing teams to enhance our product offerings.

We remain focused on identifying further efficiencies and further improving our inventory management practices to yield continued improvements in our overall working capital. We regularly review our store portfolio for profitability and cash flow, which resulted in the decision to close 8 underperforming stores in 2023. The Company incurred approximately $2.0 million in expense to close these stores for the year ended December 31, 2020 were as follows:2023 related to lease, property and equipment, and inventory write-downs, employee termination benefits, and accelerated depreciation of property and equipment.

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Other Items

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Impact of COVID-19 Pandemic

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In March 2020,We mitigated the World Health Organization announceddisruptions by featuring alternative products in our current assortment and leveraging our sourcing capabilities to look at alternative flooring categories and sourcing geographies. We rebuilt stock keeping units ("SKUs") in the vinyl category and returned to normal levels of inventory in that infectionscategory by the end of COVID-19 had become2023. While we work to mitigate the associated risks of sourcing vinyl flooring from importers subject to UFLPA, we expect to recover some of the costs incurred to date from them.

Despite our robust compliance program and mitigation efforts, it is possible that future shipments of vinyl flooring could be impacted by UFLPA holds. We are unable to predict whether other product shipments will be impacted in the future and, whether this issue could have further material impacts on sales and margins as we progress throughout 2024. See "Risk Factors – The Company and third-party suppliers on whom we rely source a pandemic andsignificant portion of the U.S. President announced a National Emergency relatingmerchandise we sell from Asia, which exposes us to the COVID-19 pandemic. Starting asrisk of the weeksupply chain disruptions" in Item 1A of March 22, 2020 the Company closed as many as 56 stores for a period of time while all other stores operated under reduced hours and/or warehouse only conditions, offering curbside pickup and job site delivery for our Pro and DIY customers. During the third and fourth quarters of 2020 the Company’s stores remained open except for temporary closures necessitated by local market conditions. Net sales for the first half of 2020 were substantially impacted in a negative way by COVID-19 due to the store closures and general uncertainty. The progress on the Company’sthis report.