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TTSH Stock Gains Despite Y/Y Q3 Earnings Decline, Gross Margin Expands
Tile Shop Holdings, Inc. (TTSH - Free Report) reported breakeven earnings per share (EPS) in the third quarter of 2024 compared with the year-ago quarter’s EPS of 4 cents.
TTSH’s Revenues in Detail
Tile Shop registered revenues of $84.5 million in the third quarter, down 8.3% year over year.
Comparable stores sales decreased 7.9% year over year in the third quarter of 2024, primarily due to a decrease in traffic.
Shares of this company gained nearly 0.1% in today’s pre-market trading.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Tile Shop’s Gross Margin
In the quarter under review, Tile Shop’s gross profit declined 5.6% year over year to $56.2 million.
However, the gross margin increased to 66.5% in the third quarter of 2024 from 64.7% in the year-ago period. The 187 basis points (bps) expansion in the gross margin was primarily due to decreases in product costs.
Tile Shop Holdings, Inc. Price, Consensus and EPS Surprise
Tile Shop Holdings, Inc. price-consensus-eps-surprise-chart | Tile Shop Holdings, Inc. Quote
TTSH’s Operating Expenses Analysis
Selling, general and administrative expenses decreased 1.3% year over year to $55.9 million.
Tile Shop’s Profitability
The operating income totaled $0.3 million, which decreased 91.2% from the prior-year quarter. The operating margin in the third quarter contracted 278 bps to 0.3%.
In the third quarter, Tile Shop’s net income was $0.04 million compared with the year-ago quarter’s $1.8 million.
Adjusted EBITDA during the reported quarter was $5 million, down 38.9% from the year-ago quarter.
TTSH’s Liquidity & Debt Management
Tile Shop exited third-quarter 2024 with cash and cash equivalents of $25.1 million compared with $25.3 million at the second-quarter end.
Cumulative net cash provided by operating activities at the end of third-quarter 2024 was $28.5 million compared with $56.2 million a year ago.
Our Take
Tile Shop exited the third quarter of 2024 with dismal top-line and bottom-line results. The decline in comparable stores sales was also discouraging. The operating margin contraction during the quarter did not bode well.
On a positive note, the gross margin expansion during the quarter bodes well. Per management, despite continued headwinds impacting the home improvement industry, TTSH continued to enhance its e-commerce capabilities. This raises our optimism.