Core Viewpoint - Tile Shop Holdings, Inc. (TTSH) reported a decline in net sales and profitability for the second quarter of 2025, reflecting challenges in store traffic and pricing pressures, while the stock underperformed compared to the S&P 500 Index [1][2][3]. Financial Performance - TTSH's net sales for Q2 2025 were $88.3 million, a decrease of 3.4% from $91.4 million in the same quarter last year [2]. - Gross profit fell 5.8% year-over-year to $56.8 million, with gross margin contracting 160 basis points to 64.4% due to higher discounting and increased product costs [2]. - Net income dropped to $0.4 million, or $0.01 per diluted share, down from $1.2 million, or $0.03 per diluted share, a year ago [3]. - Adjusted EBITDA decreased by 26.7% to $4.9 million, with a margin decline from 7.4% to 5.6% [3]. Operational Metrics - The operating income margin fell to 0.5% from 2% a year earlier, reflecting sales decline and margin compression [4]. - Selling, general and administrative (SG&A) expenses were $56.4 million, down 3.6% from $58.5 million the previous year, driven by cost savings from prior distribution center closures and reduced marketing spend [4]. - The store count decreased to 141 at the end of the quarter, down from 142 last year [3]. Capital Structure - TTSH maintained a conservative capital structure with no outstanding debt and a cash balance of $27.8 million, up from $20.9 million at the end of 2024 [5]. - Operating cash flow in the first half of 2025 totaled $13.5 million, compared to $23.5 million in the same period last year [5]. - The pretax return on capital employed over the trailing 12 months fell to 0.0% from 6.8% the previous year [5]. Management Insights - CEO Cabell Lolmaugh noted that product assortment refinements, particularly in entry-level and competitively priced products, helped improve unit volumes, although this was offset by increased sales of lower-priced products and heavier discounting [6]. - New product categories introduced include luxury vinyl tile, laminate, engineered wood flooring, and large-format tiles, aimed at capturing additional project scope per customer [6]. Market Challenges - Key challenges included persistently low housing turnover, which reduced customer traffic, and pricing pressure from discounting [7]. - Gross margins faced challenges from lower average selling prices and higher product costs, although a leaner cost structure helped mitigate some impacts [7]. Strategic Guidance - Management indicated a focus on continued expense control, limiting capital expenditures, and identifying operational efficiencies, without providing formal numerical guidance [8]. - TTSH emphasized its diversified sourcing from over 20 countries as a strategic advantage in navigating potential tariff volatility [8]. Recent Developments - The closure of the Spring Valley, WI, distribution center is expected to generate approximately $1 million in annualized SG&A savings [7]. - TTSH has implemented a broader cost-cutting strategy, including the closure of one retail store and significant corporate workforce reductions in response to ongoing demand pressures [9].

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PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements, including balance sheets, income, comprehensive income, stockholders' equity, and cash flow statements, for periods ended June 30, 2025, and December 31, 2024 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) This table provides a snapshot of the company's assets, liabilities, and stockholders' equity as of June 30, 2025, and December 31, 2024 | Metric | June 30, 2025 (unaudited) | December 31, 2024 (audited) | Change (vs. Dec 31, 2024) | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | **Assets (in thousands)** | | | | | Cash and cash equivalents | $27,758 | $20,957 | +$6,801 | | Total Current Assets | $126,270 | $119,822 | +$6,448 | | Total Assets | $324,110 | $319,603 | +$4,507 | | **Liabilities (in thousands)** | | | | | Total Current Liabilities | $82,780 | $78,394 | +$4,386 | | Total Liabilities | $200,233 | $196,691 | +$3,542 | | **Stockholders' Equity (in thousands)** | | | | | Total Stockholders' Equity | $123,877 | $122,912 | +$965 | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) This table details the company's net sales, gross profit, operating income, and net income for the three and six months ended June 30, 2025 and 2024 | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (YoY) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (YoY) | | :-------------------- | :------------------------------- | :------------------------------- | :----------- | :----------------------------- | :----------------------------- | :----------- | | Net sales | $88,260 | $91,384 | -3.4% | $176,269 | $183,112 | -3.7% | | Gross profit | $56,841 | $60,331 | -5.8% | $114,911 | $120,650 | -4.8% | | Income from operations | $440 | $1,851 | -76.2% | $623 | $4,134 | -84.9% | | Net income | $392 | $1,219 | -67.8% | $564 | $2,908 | -80.6% | | Basic EPS | $0.01 | $0.03 | -66.7% | $0.01 | $0.07 | -85.7% | | Diluted EPS | $0.01 | $0.03 | -66.7% | $0.01 | $0.07 | -85.7% | [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This table presents the company's net income and other comprehensive income components for the three and six months ended June 30, 2025 and 2024 | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $392 | $1,219 | $564 | $2,908 | | Currency translation adjustment | - | (3) | - | (12) | | Other comprehensive loss | - | (3) | - | (12) | | Comprehensive income | $392 | $1,216 | $564 | $2,896 | [Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) This table outlines changes in the company's stockholders' equity, including common stock, additional paid-in capital, and accumulated deficit, for the six months ended June 30, 2025 | Metric (in thousands) | Balance at Dec 31, 2024 | Net Income (6M 2025) | Stock Based Compensation (6M 2025) | Tax Withholdings (6M 2025) | Balance at June 30, 2025 | | :-------------------- | :---------------------- | :------------------- | :--------------------------------- | :------------------------- | :----------------------- | | Common stock (shares) | 44,657,898 | - | - | - | 44,779,230 | | Common stock (amount) | $4 | - | - | - | $4 | | Additional paid-in capital | $129,696 | - | $685 | $(284) | $130,097 | | Accumulated deficit | $(6,788) | $564 | - | - | $(6,224) | | Total Stockholders' Equity | $122,912 | $564 | $685 | $(284) | $123,877 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This table summarizes the company's cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (YoY) | | :-------------------- | :----------------------------- | :----------------------------- | :----------- | | Net cash provided by operating activities | $13,487 | $23,452 | -42.5% | | Net cash used in investing activities | $(6,402) | $(6,257) | +2.3% | | Net cash used in financing activities | $(284) | $(463) | -38.7% | | Net change in cash and cash equivalents | $6,801 | $16,721 | -59.3% | | Cash and cash equivalents end of period | $27,758 | $25,341 | +9.5% | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanatory notes supporting the consolidated financial statements, offering context on accounting policies and specific financial items [Note 1: Background](index=9&type=section&id=Note%201%3A%20Background) This note provides an overview of Tile Shop Holdings, Inc.'s business as a specialty retailer and its operational footprint - Tile Shop Holdings, Inc. is a specialty retailer of man-made and natural stone tiles, luxury vinyl tiles, setting and maintenance materials, and related accessories in the United States[27](index=27&type=chunk) - As of June 30, 2025, the Company operated **141 stores** in 31 states and the District of Columbia[27](index=27&type=chunk) - The Company is evaluating the impact of new accounting pronouncements: ASU No. 2023-09 (Income Taxes) effective December 31, 2025, and ASU No. 2024-03 (Expense Disaggregation Disclosures) effective for fiscal years beginning after December 15, 2026[30](index=30&type=chunk)[31](index=31&type=chunk) [Note 2: Revenues](index=9&type=section&id=Note%202%3A%20Revenues) This note details the company's revenue recognition policies and provides a breakdown of net sales by product category | Product Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Man-made tiles | 56 % | 54 % | 55 % | 54 % | | Natural stone tiles | 20 % | 21 % | 20 % | 21 % | | Setting and maintenance materials | 14 % | 15 % | 15 % | 15 % | | Accessories | 7 % | 7 % | 8 % | 8 % | | Delivery service | 3 % | 3 % | 2 % | 2 % | | Total | 100 % | 100 % | 100 % | 100 % | - Revenue recognition occurs when control of goods/services is transferred, either when an order is placed and available, when a customer picks up an order from a distribution center, or when an order is delivered[34](index=34&type=chunk)[37](index=37&type=chunk) - Customer deposit balance was **$11.0 million** as of June 30, 2025, up from **$10.9 million** at December 31, 2024, with **$10.0 million** from beginning-of-period deposits recognized in the first six months of 2025[34](index=34&type=chunk) [Note 3: Inventories](index=10&type=section&id=Note%203%3A%20Inventories) This note outlines the company's inventory valuation methods and provides a breakdown of inventory by category | Inventory Category (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Finished goods | $84,062 | $84,255 | | Raw materials | $1,903 | $2,012 | | Total | $85,965 | $86,267 | - Inventories are stated at the lower of cost (moving average cost method) or net realizable value, with provisions for shrinkage and other losses at **$0.9 million** at June 30, 2025, down from **$1.2 million** at December 31, 2024[37](index=37&type=chunk)[39](index=39&type=chunk) [Note 4: Income Taxes](index=11&type=section&id=Note%204%3A%20Income%20Taxes) This note explains the company's effective tax rates and discusses the impact of recent tax legislation | Period | Effective Tax Rate 2025 | Effective Tax Rate 2024 | | :----- | :---------------------- | :---------------------- | | Q2 | 16.4% | 32.1% | | YTD Q2 | 15.8% | 25.6% | - The effective tax rate decreased primarily due to a decrease in pretax earnings and the impact of certain permanent differences[40](index=40&type=chunk) - The One Big Beautiful Bill Act (OBBBA) was enacted on July 4, 2025, making permanent certain Tax Cuts and Jobs Act provisions and changing corporate tax provisions, with the Company assessing its impact but not adjusting its tax provision for changes effective after June 30, 2025[42](index=42&type=chunk) [Note 5: Earnings Per Share](index=11&type=section&id=Note%205%3A%20Earnings%20Per%20Share) This note presents the calculation of basic and diluted earnings per share for the reported periods | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (in thousands) | $392 | $1,219 | $564 | $2,908 | | Basic EPS | $0.01 | $0.03 | $0.01 | $0.07 | | Diluted EPS | $0.01 | $0.03 | $0.01 | $0.07 | - Basic and diluted EPS decreased significantly year-over-year for both the three and six months ended June 30, 2025, reflecting the decline in net income[43](index=43&type=chunk) [Note 6: Other Accrued Liabilities](index=12&type=section&id=Note%206%3A%20Other%20Accrued%20Liabilities) This note provides a detailed breakdown of the company's other accrued liabilities as of June 30, 2025, and December 31, 2024 | Liability (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Customer deposits | $10,960 | $10,882 | | Sales returns reserve | $3,284 | $2,886 | | Accrued wages and salaries | $5,187 | $4,585 | | Payroll and sales taxes | $2,262 | $2,107 | | Other current liabilities | $6,162 | $5,184 | | Total other accrued liabilities | $27,855 | $25,644 | [Note 7: Long-term Debt](index=12&type=section&id=Note%207%3A%20Long-term%20Debt) This note describes the company's revolving line of credit and its compliance with associated covenants - The Company has a **$75.0 million** revolving line of credit through September 30, 2027, secured by virtually all assets[46](index=46&type=chunk)[47](index=47&type=chunk) - As of June 30, 2025, there were no borrowings outstanding on the line of credit, with **$73.8 million** available for borrowing[48](index=48&type=chunk) - The Company was in compliance with all financial and other covenants of the Credit Agreement as of June 30, 2025[47](index=47&type=chunk) [Note 8: Leases](index=12&type=section&id=Note%208%3A%20Leases) This note details the company's lease assets and liabilities, including right-of-use assets and lease costs | Lease Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Right of use asset | $132,332 | $132,861 | | Current portion of lease liability | $29,315 | $28,880 | | Long-term lease liability, net | $112,403 | $113,700 | | Total lease liabilities | $141,718 | $142,580 | | Lease Cost (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating lease cost | $9,451 | $9,378 | $18,947 | $18,915 | | Variable lease cost | $3,922 | $3,791 | $7,801 | $7,549 | | Short term lease cost | $22 | $21 | $82 | $98 | | Net lease cost | $13,395 | $13,190 | $26,830 | $26,562 | - The Company entered into two sublease agreements for its closed New Jersey distribution center, expected to generate approximately **$1.0 million** of sublease income in 2025 and an additional **$1.0 million** in 2026[53](index=53&type=chunk) [Note 9: Fair Value of Financial Instruments](index=13&type=section&id=Note%209%3A%20Fair%20Value%20of%20Financial%20Instruments) This note discusses the fair value measurement of financial instruments and asset impairment charges - Cash and cash equivalents are classified as Level 1 fair value assets, measured using quoted market prices in active markets[59](index=59&type=chunk) - The Company recorded **$0.1 million** in asset impairment charges for property, plant and equipment during the three and six months ended June 30, 2025, down from **$0.9 million** in the prior year[59](index=59&type=chunk) - An adjustment of **$0.8 million** was recorded to increase the fair value of the asset retirement obligation for leased property, resulting in a **$0.8 million** increase in other long-term liabilities[60](index=60&type=chunk) [Note 10: Equity Incentive Plans](index=14&type=section&id=Note%2010%3A%20Equity%20Incentive%20Plans) This note outlines the company's equity compensation plans, including shares available for awards and stock-based compensation expense - The 2021 Omnibus Equity Compensation Plan allows for a maximum of **3,500,000 shares** for awards[61](index=61&type=chunk) - As of June 30, 2025, the Company had **295,367 fully vested outstanding stock options** at a weighted average exercise price of **$7.07 per share**[63](index=63&type=chunk) - Total stock-based compensation expense related to restricted stock was **$0.3 million** for the three months ended June 30, 2025 and 2024, and **$0.7 million** for the six months ended June 30, 2025 and 2024[65](index=65&type=chunk) [Note 11: Segments](index=15&type=section&id=Note%2011%3A%20Segments) This note clarifies that the company operates as a single reportable segment, with all operations primarily in the United States - The Company operates as a single reportable segment, with the Chief Executive Officer acting as the Chief Operating Decision Maker (CODM) who evaluates financial performance on a total Company basis[67](index=67&type=chunk) - All long-lived assets and the majority of revenue are located/earned in the United States[67](index=67&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and operational results, highlighting declining sales and profitability due to lower traffic and increased costs, alongside expense management efforts and macroeconomic uncertainties [Introduction](index=16&type=section&id=Introduction) This introduction outlines the company's strategic responses to cost pressures from tariffs and acknowledges macroeconomic uncertainties - The Company is evaluating strategic options, including sourcing adjustments and pricing strategies, to manage anticipated cost pressures from elevated tariffs on imported goods[75](index=75&type=chunk) - There is significant uncertainty regarding macroeconomic factors, with an expectation that these factors will moderate, though timing is uncertain[76](index=76&type=chunk) [Overview and Recent Trends](index=17&type=section&id=Overview%20and%20Recent%20Trends) This section provides an overview of the company's business, recent sales performance, gross margin changes, and expense management initiatives - The Company is a specialty retailer of man-made and natural stone tiles, luxury vinyl tiles, setting and maintenance materials, and related accessories, operating **141 stores** in 31 states as of June 30, 2025[77](index=77&type=chunk) - Comparable store sales decreased by **3.5%** for the three months and **3.8%** for the six months ended June 30, 2025, primarily due to lower store traffic, influenced by moderated existing home sales[79](index=79&type=chunk) - Gross margin rate decreased by **160 basis points** to **64.4%** in Q2 2025 (vs. 66.0% in Q2 2024) due to higher discounting and increased product costs[80](index=80&type=chunk) - Selling, general and administrative (SG&A) expenses decreased by **$2.1 million (3.6%)** in Q2 2025, driven by lower asset impairment, reduced SG&A from the New Jersey distribution center closure, decreased marketing costs, and lower depreciation, partially offset by a write-off of display supplies[82](index=82&type=chunk) - The Company closed its Spring Valley, WI distribution center in Q2 2025, anticipating an annualized benefit of approximately **$1.0 million**, and closed two stores at the end of their lease terms in Q2 and Q3 2025[83](index=83&type=chunk)[84](index=84&type=chunk) [Key Components of our Consolidated Statements of Income](index=17&type=section&id=Key%20Components%20of%20our%20Consolidated%20Statements%20of%20Income) This section defines the key components of the consolidated statements of income, including net sales, cost of sales, and SG&A expenses - Net sales are recognized when customers take control of merchandise or upon final delivery, net of returns and excluding sales taxes[87](index=87&type=chunk)[88](index=88&type=chunk) - Comparable store sales growth is a key metric, calculated for stores operating for at least 13 full months, excluding relocated stores[89](index=89&type=chunk) - Cost of sales includes material costs, freight, customs, duties, storage, delivery, inventory losses, and manufacturing costs for setting and maintenance materials[90](index=90&type=chunk) - Selling, general, and administrative expenses primarily consist of compensation, occupancy, utilities, maintenance, advertising, shipping, and depreciation/amortization[91](index=91&type=chunk) [Results of Operations](index=18&type=section&id=Results%20of%20Operations) This section provides a detailed comparison of the company's financial performance for the three and six months ended June 30, 2025, versus 2024 [Comparison of the three months ended June 30, 2025 to the three months ended June 30, 2024](index=18&type=section&id=Comparison%20of%20the%20three%20months%20ended%20June%2030%2C%202025%20to%20the%20three%20months%20ended%20June%2030%2C%202024) This section compares the company's net sales, gross profit, SG&A, and net income for the second quarter of 2025 against the same period in 2024 | Metric (in thousands) | Q2 2025 | % of sales 2025 | Q2 2024 | % of sales 2024 | Change (YoY) | | :-------------------- | :----------- | :-------------- | :----------- | :-------------- | :----------- | | Net sales | $88,260 | 100.0 % | $91,384 | 100.0 % | -3.4% | | Gross profit | $56,841 | 64.4 % | $60,331 | 66.0 % | -5.8% | | SG&A expenses | $56,401 | 63.9 % | $58,480 | 64.0 % | -3.6% | | Income from operations | $440 | 0.5 % | $1,851 | 2.0 % | -76.2% | | Net income | $392 | 0.4 % | $1,219 | 1.3 % | -67.8% | | Provision for income taxes | $(77) | (0.1)% | $(575) | (0.6)% | -86.6% | - Net sales decreased by **$3.1 million (3.4%)** due to a **3.5%** decline in comparable store sales, primarily from decreased traffic[92](index=92&type=chunk) - Gross margin rate declined by **1.6 percentage points** to **64.4%** due to higher discounting and increased product costs[93](index=93&type=chunk) - The effective tax rate decreased to **16.4%** in Q2 2025 from **32.1%** in Q2 2024, mainly due to lower pretax income and permanent differences[95](index=95&type=chunk) [Comparison of the six months ended June 30, 2025 to the six months ended June 30, 2024](index=19&type=section&id=Comparison%20of%20the%20six%20months%20ended%20June%2030%2C%202025%20to%20the%20six%20months%20ended%20June%2030%2C%202024) This section compares the company's year-to-date net sales, gross profit, SG&A, and net income for the first half of 2025 against the same period in 2024 | Metric (in thousands) | YTD Q2 2025 | % of sales 2025 | YTD Q2 2024 | % of sales 2024 | Change (YoY) | | :-------------------- | :----------- | :-------------- | :----------- | :-------------- | :----------- | | Net sales | $176,269 | 100.0 % | $183,112 | 100.0 % | -3.7% | | Gross profit | $114,911 | 65.2 % | $120,650 | 65.9 % | -4.8% | | SG&A expenses | $114,288 | 64.8 % | $116,516 | 63.6 % | -1.9% | | Income from operations | $623 | 0.4 % | $4,134 | 2.3 % | -84.9% | | Net income | $564 | 0.3 % | $2,908 | 1.6 % | -80.6% | | Provision for income taxes | $(106) | (0.1)% | $(1,003) | (0.5)% | -89.4% | - Net sales decreased by **$6.8 million (3.7%)** due to a **3.8%** decline in comparable store sales, primarily from decreased store traffic[96](index=96&type=chunk) - Gross margin rate decreased by **0.7 percentage points** to **65.2%** due to increased product costs and higher discounting[97](index=97&type=chunk) - SG&A expenses decreased by **$2.2 million (1.9%)**, mainly due to the New Jersey distribution center closure, lower depreciation, and reduced asset impairment, partially offset by increased IT costs and display supply write-offs[98](index=98&type=chunk) - The effective tax rate for the six months ended June 30, 2025, was **15.8%**, down from **25.6%** in the prior year, primarily due to decreased pre-tax income and permanent differences[99](index=99&type=chunk) [Non-GAAP Measures](index=19&type=section&id=Non-GAAP%20Measures) This section presents and reconciles non-GAAP financial measures, including Adjusted EBITDA and Pretax Return on Capital Employed - Adjusted EBITDA is calculated by adjusting net income for interest expense, income taxes, depreciation and amortization, and stock-based compensation expense[100](index=100&type=chunk) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $392 | $1,219 | $564 | $2,908 | | Adjusted EBITDA | $4,937 | $6,733 | $9,503 | $14,150 | | Adjusted EBITDA margin | 5.6 % | 7.4 % | 5.4 % | 7.7 % | - Pretax Return on Capital Employed decreased significantly to **0.0%** for the trailing twelve months ended June 30, 2025, from **6.8%** for the same period in 2024, reflecting a substantial drop in Income from Operations[104](index=104&type=chunk) [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's sources of liquidity, capital expenditures, and cash flow activities - Principal liquidity sources include **$27.8 million** in cash and cash equivalents, cash flow from operations, and a **$75.0 million** revolving line of credit[105](index=105&type=chunk)[106](index=106&type=chunk) - As of June 30, 2025, the Company had no outstanding borrowings on its line of credit and **$73.8 million** available for borrowing[109](index=109&type=chunk) - Management believes current liquidity sources are sufficient to fund operations and capital expenditures for at least the next twelve months and long-term liquidity requirements[110](index=110&type=chunk) [Capital Expenditures](index=21&type=section&id=Capital%20Expenditures) This section details the company's capital expenditures for the first six months of 2025 and 2024, primarily for store remodels and IT assets | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Capital expenditures | $6,473 | $6,257 | - Capital expenditures in 2025 were primarily directed towards store remodels, merchandising, distribution, and information technology assets[111](index=111&type=chunk) [Cash Flows](index=21&type=section&id=Cash%20Flows) This section analyzes the company's cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $13,487 | $23,452 | | Net cash used in investing activities | $(6,402) | $(6,257) | | Net cash used in financing activities | $(284) | $(463) | - Net cash provided by operating activities decreased by **$10.0 million (42.5%)** year-over-year, primarily due to a decrease in net income and other working capital changes[114](index=114&type=chunk) - Net cash used in financing activities decreased due to the impact of employee shares withheld for employee stock award vestings[116](index=116&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=22&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there have been no material changes in the Company's primary risk exposures or management of market risks compared to those disclosed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - No material changes in primary risk exposures or market risk management have occurred since the December 31, 2024 Annual Report on Form 10-K[118](index=118&type=chunk) [Item 4. Controls and Procedures](index=22&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the Company's disclosure controls and procedures as of June 30, 2025, and reports no material changes in internal control over financial reporting during the quarter [Disclosure Controls and Procedures](index=22&type=section&id=Disclosure%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures as of June 30, 2025 - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[119](index=119&type=chunk) [Changes in Internal Control Over Financial Reporting](index=22&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section reports no material changes in internal control over financial reporting during the quarter ended June 30, 2025 - There were no changes in internal control over financial reporting during the quarter ended June 30, 2025, that materially affected or are reasonably likely to materially affect internal control over financial reporting[120](index=120&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=22&type=section&id=Item%201.%20Legal%20Proceedings) The Company is involved in various lawsuits and claims in the normal course of business, with management assessing potential liabilities and accruing for probable and estimable losses - The Company records liabilities for legal proceedings where a loss is probable and estimable[121](index=121&type=chunk) - Management does not expect the ultimate liability from current legal matters to have a material adverse effect on the Company's financial results[121](index=121&type=chunk) [Item 1A. Risk Factors](index=22&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, highlighting the company's vulnerability to political and economic changes, particularly tariffs and international trade policies, which may increase costs and impact profitability - The Company is vulnerable to changes in political and economic conditions, including tariffs and international trade wars, which may increase costs and affect sales and profitability[123](index=123&type=chunk) - The Company has historically shifted sourcing away from countries with higher tariffs but acknowledges the difficulty in predicting tariff rates and the potential ineffectiveness of countermeasures[123](index=123&type=chunk) - Failure to mitigate tariff-related risks through supply chain adjustments or pricing strategies could negatively impact financial performance[123](index=123&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=23&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details equity security activities, focusing on shares withheld for tax obligations related to restricted stock grants and shares forfeited due to unfulfilled vesting conditions, with no cash repurchases | Period | Total Shares Purchased | Average Price Paid per Share | | :-------------------------- | :--------------------- | :--------------------------- | | May 1, 2025 - May 31, 2025 | 9,692 | $1.01 | | June 1, 2025 - June 30, 2025 | 29,598 | $0.24 | | Total (Q2 2025) | 39,290 | $0.43 | - The shares purchased were primarily due to tax withholdings for restricted stock grants (**1,560 shares** in April, **1,184 shares** in May) and forfeitures when vesting conditions were not met (**8,132 shares** in April, **28,414 shares** in May)[124](index=124&type=chunk)[125](index=125&type=chunk) - No cash was paid to repurchase these shares, and they were not part of a publicly announced plan or program[124](index=124&type=chunk)[125](index=125&type=chunk) [Item 3. Defaults Upon Senior Securities](index=23&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item states that there are no defaults upon senior securities to report [Item 4. Mine Safety Disclosures](index=23&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item indicates that mine safety disclosures are not applicable to the Company [Item 5. Other Information](index=23&type=section&id=Item%205.%20Other%20Information) This section reports that no directors or executive officers adopted, modified, or terminated any Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements during Q2 2025 - No Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or executive officers during Q2 2025[128](index=128&type=chunk) [Item 6. Exhibits](index=24&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including organizational documents, certifications, and financial statements formatted in iXBRL - Exhibits include Certificate of Incorporation, By-Laws, CEO and CFO certifications (Sarbanes Oxley Act Sections 302 and 906), and iXBRL formatted financial statements[129](index=129&type=chunk) [Signatures](index=25&type=section&id=Signatures) This section contains the official signatures of the Chief Executive Officer and Chief Financial Officer, certifying the filing of the Quarterly Report on Form 10-Q - The report is signed by Cabell H. Lolmaugh, Chief Executive Officer, and Mark B. Davis, Chief Financial Officer, on August 7, 2025[134](index=134&type=chunk)

Tile Shop (TTSH) Q2 2025 Earnings Call August 07, 2025 09:00 AM ET Speaker0Good day, everyone, and thank you for standing by. My name is Argy, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q2 twenty twenty five Tile Shop Holdings, Inc. Earnings Conference Call. All lines have been placed on mute to prevent any background noise.After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during this time, s ...

THE TILE SHOP REPORTS SECOND QUARTER 2025 RESULTS Exhibit 99.1 MINNEAPOLIS – August 7, 2025 – Tile Shop Holdings, Inc. (Nasdaq: TTSH) (the "Company"), a specialty retailer of natural stone, man-made and luxury vinyl tiles, today announced results for its second quarter ended June 30, 2025. Second Quarter 2025 Summary Net Sales Decreased 3.4% Comparable Store Sales Decreased 3.5% Gross Margin of 64.4% Net Income of $0.4 Million and Adjusted EBITDA of $4.9 Million No Debt Outstanding and $27.8 million of Cash ...

MINNEAPOLIS, July 31, 2025 (GLOBE NEWSWIRE) -- Tile Shop Holdings, Inc. (Nasdaq: TTSH) (the "Company"), a specialty retailer of natural stone tiles, man-made and luxury vinyl tiles, setting and maintenance materials, and related accessories, today announced that the Company will release financial results for the second quarter ended June 30, 2025, at 7:00 a.m. Eastern Time on Thursday, August 7, 2025. The Company will host a conference call via webcast for investors and other interested parties beginning at ...

The new collaboration brings Park’s vibrant, painterly aesthetic to tile for the first time MINNEAPOLIS, July 30, 2025 (GLOBE NEWSWIRE) -- The Tile Shop (Nasdaq: TTSH), a specialty retailer of natural stone and man-made tiles, is proud to announce the launch of an exclusive new collaboration with acclaimed artist and designer Laura Park. The Tile Shop x Laura Park, available now, showcases Park’s signature bold brushwork, joyful color palettes, and modern abstract style across a fresh, artistic range of ti ...

Core Insights - The Tile Shop is expanding its exclusive Jeffrey Alan Marks Collection with two new tile designs: Natural Zen Birchwood and Sand Dollar [1][6] - The new designs embody a California-casual aesthetic, featuring soft blue, sand, and white tones that evoke a coastal-inspired ambiance [3][4] Product Details - **Natural Zen Birchwood**: A 4" x 16" ceramic tile available in White, Sea Blue, and Ash, inspired by Japanese spa design, ideal for serene spaces [5] - **Sand Dollar**: A 6" x 6" matte porcelain tile available in Ocean and Ash, featuring intricate motifs that reflect coastal living [6] Designer Collaboration - The expanded collection is part of The Tile Shop's strategy to enhance its exclusive designer collaborations, which include partnerships with other notable designers and brands [7] Company Overview - Tile Shop Holdings, Inc. operates 141 stores across 31 states and the District of Columbia, specializing in natural stone, man-made, and luxury vinyl tiles [9]

Financial Data and Key Metrics Changes - The company reported a total of 44,729,924 shares of common stock outstanding as of April 8, 2025, with 30,433,597 shares represented at the meeting, indicating a quorum for decision-making [6][10]. Business Line Data and Key Metrics Changes - No specific financial data or key metrics for individual business lines were discussed during the meeting [12]. Market Data and Key Metrics Changes - No specific market data or key metrics were provided in the meeting [12]. Company Strategy and Development Direction and Industry Competition - The company ratified the appointment of RSM US LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025, indicating a focus on maintaining strong governance and compliance [11]. Management's Comments on Operating Environment and Future Outlook - Management did not provide specific comments on the operating environment or future outlook during the meeting [12]. Other Important Information - The meeting included the election of directors and the approval of executive compensation proposals, reflecting the company's governance practices [11]. Q&A Session All Questions and Answers Question: Were there any stockholder questions during the meeting? - There were no questions submitted by stockholders during the meeting [12].

Core Insights - The Tile Shop is launching a new collaboration with designer Nate Berkus, set to debut in fall 2026, featuring a collection of floor and wall tiles in various materials and classic colors [1][2][3] Company Overview - Tile Shop Holdings, Inc. is a leading specialty retailer in the U.S. for natural stone, man-made, and luxury vinyl tiles, along with related accessories, operating 142 stores across 31 states and the District of Columbia [4] Collaboration Details - The Tile Shop x Nate Berkus collection aims to provide a blend of contemporary and classic styling, allowing customers to mix and match tiles for a modern, classic, and refined look at an accessible price point [2][3] - The collection is designed to be timeless and thoughtful, featuring colorways and patterns that are intended to be anti-trend [3] Designer Background - Nate Berkus is recognized as one of the world's most influential interior designers, with a career spanning over thirty years, including numerous television shows and award-winning interior designs [6]