Lumber Liquidators 2Q 17 earnings were released before opening bell this morning. The flooring retailer reported earnings of 16 cents per share on $263.5 million in sales, while Wall Street had been expecting losses of 6 cents per share on $256.9 million in revenue. In last year’s second quarter, Lumber Liquidators reported losses of 45 cents per share on $238.1 million in sales.

Lumber Liquidators 2Q 17 earnings

Lumber Liquidators 2Q 17 earnings

Lumber Liquidators said the number of customers invoiced grew 5.3% year over year as it continued to recover from the news headlines about formaldehyde content in some of its Chinese-made laminate flooring products. The size of the average sale increased 3.5%, while merchandise sales in comparable sales rose 6.1%. Net sales in non-comparable sales grew $4.4 million.

“Customers have responded to the investments that we made to broaden and strengthen our assortment with innovative products, while also ensuring the right mix of those products were available in our stores,” CEO Dennis Knowles said in a statement. “Although we are pleased with the results in the quarter, we still have work to do.”

Lumber Liquidators records higher gross profits

Gross profits rose 38.1%, while the gross margin expanded to 37%. The company explained that its gross margin benefited from revisions in anti-dumping rates and lower reserves for its Air Quality Testing Program, which stemmed from the formaldehyde reports. Lumber Liquidators said its legal fees and regulatory and settlement expenses in connection with the lawsuits over the controversy were down year over year in the second quarter, although it added that these items will fluctuate over time as each of the legal matters is resolved.

Other than these two items, the 220-basis-point improvement year over year was due to a more favorable sales mix of manufactured products with higher gross margins, like vinyl and ancillary products. Transportation costs were also lower, although installation sales were higher on some products with gross margins that were slightly lower.

After Lumber Liquidator Q2 17 earnings were released, the flooring retailer’s stock skyrocketed in premarket trading, climbing by as much as 18.58% to $29.30.