Tile Shop Holdings Reports Third Quarter 2024 Results

Tile Shop Holdings, Inc., a specialty retailer of natural stone, man-made, and luxury vinyl tiles, has released its financial results for the third quarter ending September 30, 2024. The company, headquartered in Minneapolis, continues to navigate a challenging home improvement market.

Financial Highlights

For the third quarter of 2024, Tile Shop Holdings reported a decrease in net sales by 8.3% to $84.5 million compared to $92.1 million in the same period last year. Comparable store sales also saw a decline of 7.9%. The gross margin improved slightly to 66.5% from 64.7% in the previous year, primarily due to reduced product costs. Net income for the quarter was $41 thousand, a significant drop from $1.8 million in Q3 2023. Adjusted EBITDA stood at $5.0 million, down from $8.3 million in the same period last year.

Business and Operational Highlights

The company remains bank debt-free with $25 million in cash. Despite the sales decline, the company has been proactive in enhancing its e-commerce capabilities, expanding its product assortment, and maintaining strong customer service. The number of stores remained relatively stable, with 142 stores open at the end of the period compared to 143 stores in the previous year.

Strategic Initiatives and Corporate Developments

In response to industry challenges, Tile Shop Holdings has taken steps to close its distribution center in Dayton, New Jersey, reduce staffing levels at its corporate office, and close its trading company office in Beijing, China. These actions are expected to reduce SG&A expenses by $2.8 million to $4.1 million annually. The company is actively seeking to sublease the Dayton distribution center space, with the lease expiring in September 2026.

Management's Perspective

CEO Cabell Lolmaugh commented, "Despite continued headwinds impacting the home improvement industry and our near-term performance, we have continued to be proactive with driving connections with our professional customers, expanding our assortment for customers seeking products at lower price points, enhancing our e-commerce capabilities, and maintaining our unwavering commitment to provide exceptional service to our customers. Together with our strong balance sheet, we are in a great position to serve our professional and retail customers with any size of project, both in our stores or digitally."

Future Outlook

The company did not provide specific guidance for the next reporting period. However, the management's focus remains on leveraging its strong balance sheet and enhancing customer service to navigate the challenging market conditions.

SEC Filing: TILE SHOP HOLDINGS, INC. [ TTSH ] - 8-K - Nov. 07, 2024