UPDATE 2-Lumber Liquidators Q3 tops Street, raises 2009 view

* Q3 EPS $0.28 vs est $0.24

* Q3 sales $140.5 mln vs est $137.1 mln

* Sees FY EPS $0.90 to $0.95

* Sees FY sales $535 mln to $543 mln

* Shares pare early gains (Adds conference call details, analysts' comments, updates stock activity)

By Vidya Lakshmi

BANGALORE, Nov 4 (Reuters) - Hardwood flooring retailer Lumber Liquidators Inc (LL.N) posted a better-than-expected quarterly profit as gross margins continued to benefit from changes in sales mix, and raised its outlook for the full year.

The Toano, Virginia-based company now sees full-year earnings of 90 cents to 95 cents a share. In August, it had forecast a profit of 85 cents to 91 cents a share for the period.

The company also raised its full-year revenue outlook to $535 million to $543 million and said it looks to open 34 to 36 new store locations in 2009. It had earlier forecast revenue of $528 million to $538 million.

Analysts were expecting a profit of 90 cents a share, on revenue of $537.1 million for the full year.

"The guidance seems conservative and beatable," Stephens Inc analyst Rick Nelson told Reuters.

Lumber Liquidators also said it sees a 1.8 percent fall in comparable store sales for the full year.

"The hardwood buyer may be coming back off the sideline, that may cause the average sales to increase a bit and we hope to hang on to traffic trends that we have seen," a company executive said on a conference call with analysts.

"We don't really anticipate traffic trends accelerating from where we were in the third quarter," he added.

For the third quarter, the company earned $7.8 million, or 28 cents a share, compared with $5.5 million, or 20 cents a share, a year ago.

Revenue grew 14 percent to $140.5 Million.

Analysts on average were looking for a profit of 24 cents a share, on revenue of $137.1 million, according to Thomson Reuters I/B/E/S.

Selling general and administrative expenses were 27.6 percent of net sales, compared with 28.1 percent of net sales a year ago.

Lumber Liquidators -- which competes with independent U.S. retailers and much bigger chains like Home Depot Inc (HD.N) and Lowe's Cos Inc (LOW.N) -- has been able to attract consumers even in a difficult economy due to its lower prices.

Shares of the company, which gained as much as 7 percent to touch $24.46, gave up their gains and were trading down 49 cents at $22.32 Wednesday afternoon on the New York Stock Exchange.

"It has been a the case for a lot of stocks over the last three or four weeks where we have seen companies beat, raise guidance, and we haven't seen too much upside," Keybanc Captal Markets analyst Bradley Thomas said. (Reporting by Vidya Lakshmi in Bangalore; Editing by Vinu Pilakkott, Unnikrishnan Nair)