Workflow
Tile Shop(TTSH)
icon
Search documents
Tile Shop: Focus On Channel And Product Growth Strategies
seekingalpha.com· 2024-05-26 17:47
Core Viewpoint - Tile Shop Holdings, Inc. (NASDAQ:TTSH) is rated as a Buy due to positive growth outlooks for its e-commerce channel and new product offerings [1] E-commerce Growth Potential - Tile Shop's e-commerce business shows significant growth potential, with online sales rising by +25% YoY in Q1 2024 [2][5] - The company currently operates 142 stores in the US and has decided not to open new stores in 2024, focusing instead on expanding its e-commerce capabilities [3] - Online sales are now roughly equivalent to the revenue contribution from one of its larger stores, indicating that there is substantial room for further expansion in this channel [4] Targeting Price-Conscious Clients - Tile Shop has launched competitively priced tile products aimed at homeowners looking to complete smaller remodel projects on a budget, targeting the "middle market customer" segment [7][8] - The company is also relaunching its private label line for professional clients, offering quality comparable to top brands at exceptional price points [10] - Existing loyalty programs for professional clients will support retention of budget-conscious customers [11] Financial Strength and Cost Discipline - Tile Shop is debt-free, with cash accounting for approximately 8% of its market capitalization as of Q1 2024 [13] - The company generated positive operating cash flow of $18.6 million and free cash flow of $15.9 million in Q1 2024 [13] - Cost optimization efforts have led to a -6% YoY reduction in SG&A costs for Q1 2024 [14] Valuation Perspective - The market currently values TTSH at a trailing twelve months' EV/EBITDA multiple of 12 times, which is lower than its historical midpoint of 18 times and peer Floor & Decor Holdings' 28 times [16] - There is a belief that Tile Shop deserves more demanding valuations due to its effective product and channel growth initiatives [17]
Tile Shop(TTSH) - 2024 Q1 - Earnings Call Transcript
2024-05-10 05:04
Financial Data and Key Metrics Changes - First quarter sales in comparable stores decreased by 10.2% due to lower levels of store traffic, with an estimated $1 million increase in sales attributed to an extra day in the leap year [22] - Gross margin rate during the first quarter was 65.8%, representing a 160 basis point increase compared to the first quarter of 2023 [16] - The company generated $18.6 million of operating cash flow and ended the quarter with a $24 million cash balance, carrying no debt [23] Business Line Data and Key Metrics Changes - The company is focused on growing sales of LVT and backshelf products, which have a lower gross margin rate profile compared to tile products [8] - E-commerce sales increased by over 25% during the first quarter of 2024 compared to the same period in 2023, with e-commerce sales now comparable to one of the larger stores [20] Market Data and Key Metrics Changes - The company observed weakness in existing home sales, which negatively impacted traffic in stores during the first quarter of 2024 [19] - International freight rates have recently increased due to reduced water levels in the Panama Canal and hostilities in the Red Sea, which may pressure gross margin rates in the coming quarters [16] Company Strategy and Development Direction - The company intends to enhance relationships with professional customers, expand product offerings for middle market customers, and invest in e-commerce capabilities [14] - The introduction of competitively priced tile products is aimed at appealing to customers completing smaller remodel projects on a budget [5] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic challenges have adversely affected top line results, but the strong relationships with professional customers have helped mitigate some impacts [19] - The company believes it is well-positioned to navigate industry challenges and achieve continued growth as macro pressures ease [14] Other Important Information - The company plans to relaunch its private label superior line of backshelf products, which includes in-house manufactured items [13] - SG&A expenses for the first quarter were $58 million, a decrease of $3.4 million compared to the first quarter of 2023 [8] Q&A Session Summary - No specific questions and answers were provided in the content, as the call concluded without a detailed Q&A segment [17][18]
Tile Shop(TTSH) - 2024 Q1 - Quarterly Report
2024-05-09 20:31
Financial Performance - Net sales for the first quarter of 2024 were $91.7 million, a decrease of $10.3 million, or 10.1%, compared to the first quarter of 2023 [79]. - Net income for Q1 2024 was $1.7 million, representing 1.8% of sales, down from $2.5 million (2.5% of sales) in Q1 2023 [88]. - Adjusted EBITDA for Q1 2024 was $7.4 million (8.1% of sales), compared to $10.3 million (10.1% of sales) in Q1 2023 [88]. - Comparable store sales decreased by 10.2% during the three months ended March 31, 2024, attributed to lower traffic levels [69]. Profitability and Margins - Gross profit decreased by $5.2 million, or 8.0%, in the first quarter of 2024, with a gross margin rate of 65.8% compared to 64.2% in the first quarter of 2023 [80]. - Gross margin rate improved by 160 basis points from the first quarter of 2023 to 65.8% for the three months ended March 31, 2024 [71]. - Pretax return on capital employed decreased to 11.3% in Q1 2024 from 15.2% in Q1 2023 [89]. Expenses and Cash Flow - Selling, general and administrative expenses decreased by $3.4 million, or 5.5%, from $61.4 million in the first quarter of 2023 to $58.0 million in the first quarter of 2024 [81]. - Operating cash flow generated during the three months ended March 31, 2024, was $18.6 million, with cash and cash equivalents increasing to $24.0 million [73]. - Net cash provided by operating activities was $18.6 million in Q1 2024, a decrease from $25.8 million in Q1 2023, mainly due to a prior year tax refund [99]. Assets and Capital Expenditures - Total assets as of March 31, 2024, were $322.7 million, down from $346.7 million in 2023 [89]. - Capital expenditures for Q1 2024 were $2.7 million, down from $3.4 million in Q1 2023, primarily for new stores and technology investments [96]. - Working capital increased to $39.0 million as of March 31, 2024, compared to $35.8 million at December 31, 2023 [102]. Debt and Liquidity - The company had no borrowings outstanding on its line of credit as of March 31, 2024 [73]. - The company had no borrowings outstanding on its line of credit as of March 31, 2024, with $73.6 million available for borrowing [94]. - The company expects to use its liquidity for maintaining existing stores and purchasing additional merchandise inventory [90]. Tax and Interest - Interest expense decreased from $0.8 million in the first quarter of 2023 to $0.2 million in the first quarter of 2024 [82]. - The effective tax rate decreased to 20.2% in the first quarter of 2024 from 24.5% in the first quarter of 2023 [83]. Store Operations - The company operated 142 stores across 31 states and the District of Columbia as of March 31, 2024 [67].
Tile Shop(TTSH) - 2024 Q1 - Quarterly Results
2024-05-09 11:30
[Performance Summary and Management Commentary](index=1&type=section&id=Performance%20Summary%20and%20Management%20Commentary) The Tile Shop reported a 10.1% net sales decline and 10.2% comparable store sales decrease in Q1 2024, while improving gross margin to 65.8% and generating $18.6 million in operating cash flow | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Sales | $91.7 million | $102.0 million | | Net Sales Decline | (10.1)% | (0.4)% | | Comparable Store Sales Decline | (10.2)% | 0.1% (growth) | | Gross Margin Rate | 65.8% | 64.2% | | Net Income | $1.7 million | $2.5 million | | Diluted EPS | $0.04 | $0.06 | | Adjusted EBITDA | $7.4 million | $10.3 million | - Management stated that continued softness in existing home sales led to lower store traffic, adversely impacting comparable store sales[4](index=4&type=chunk) - The company highlighted strong operating cash flow generation of **$18.6 million** and an ending cash balance of **$24.0 million** with no long-term debt[3](index=3&type=chunk) [First Quarter 2024 Financial Performance](index=1&type=section&id=First%20Quarter%202024%20Financial%20Performance) The company's financial performance in Q1 2024 was characterized by a significant sales decline due to lower traffic, which was partially mitigated by an improved gross margin rate of 65.8% and a 5.5% reduction in SG&A expenses [Net Sales](index=1&type=section&id=Net%20Sales) Net sales for Q1 2024 decreased by 10.1% to $91.7 million from $102.0 million in Q1 2023, driven by a 10.2% decline in comparable store sales primarily due to decreased customer traffic | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Sales | $91.7 million | $102.0 million | | YoY Change | -10.1% | -0.4% | | Comparable Store Sales Change | -10.2% | +0.1% | - The decline in sales at comparable stores was principally due to a decrease in traffic[6](index=6&type=chunk) [Gross Profit](index=1&type=section&id=Gross%20Profit) Gross profit decreased by 8.0% to $60.3 million in Q1 2024, but the gross margin rate improved by 160 basis points to 65.8% due to lower international freight and product costs | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Gross Profit | $60.3 million | $65.5 million | | Gross Margin Rate | 65.8% | 64.2% | - The improvement in the gross margin rate was primarily attributed to lower levels of international freight and decreases in product costs[7](index=7&type=chunk) [Selling, General and Administrative Expenses](index=3&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses) Selling, general and administrative (SG&A) expenses decreased by 5.5% to $58.0 million in Q1 2024, primarily driven by reductions in variable costs and depreciation expense - SG&A expenses decreased by **$3.4 million (5.5%)** from **$61.4 million** in Q1 2023 to **$58.0 million** in Q1 2024[8](index=8&type=chunk) - The decrease was mainly due to a **$2.9 million** reduction in variable costs and a **$1.0 million** decrease in depreciation expense, partially offset by a **$0.6 million** increase in rent[8](index=8&type=chunk) [Provision for Income Taxes](index=3&type=section&id=Provision%20for%20Income%20Taxes) The provision for income taxes decreased to $0.4 million in Q1 2024 due to lower pretax income, with the effective tax rate falling to 20.2% primarily from increased tax benefits on employee equity awards | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Provision for Income Taxes | $0.4 million | $0.8 million | | Effective Tax Rate | 20.2% | 24.5% | - The decrease in the effective tax rate was largely due to an increase in the tax benefit associated with employee equity award vestings[9](index=9&type=chunk) [Capital Structure and Liquidity](index=3&type=section&id=Capital%20Structure%20and%20Liquidity) As of March 31, 2024, the company maintained a strong liquidity position with no outstanding borrowings on its $75.0 million line of credit and a substantial increase in cash to $24.0 million - The company had no borrowings outstanding on its **$75.0 million** line of credit as of March 31, 2024[10](index=10&type=chunk) - Cash and cash equivalents increased by **$15.4 million**, from **$8.6 million** on December 31, 2023, to **$24.0 million** on March 31, 2024[10](index=10&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=NON-GAAP%20INFORMATION) The company's non-GAAP metrics showed a decline in profitability, with Adjusted EBITDA for Q1 2024 at $7.4 million and Pretax Return on Capital Employed for the trailing twelve months at 11.3% Adjusted EBITDA Reconciliation | ($ in millions) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | GAAP net income | $1.7 | $2.5 | | Interest expense | $0.2 | $0.8 | | Provision for income taxes | $0.4 | $0.8 | | Depreciation and amortization | $4.7 | $5.8 | | Stock-based compensation | $0.4 | $0.4 | | **Adjusted EBITDA** | **$7.4** | **$10.3** | Pretax Return on Capital Employed (TTM) | ($ in millions) | As of Mar 31, 2024 | As of Mar 31, 2023 | | :--- | :--- | :--- | | Income from Operations (TTM) | $14.3 | $22.0 | | Capital Employed | $126.6 | $145.1 | | **Pretax Return on Capital Employed** | **11.3%** | **15.2%** | [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements detail the company's financial position and performance, showing total assets of $325.9 million, net income of $1.7 million, and $18.6 million in net cash from operating activities [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2024, total assets increased to $325.9 million, driven by a rise in cash to $24.0 million, with total liabilities at $204.6 million and stockholders' equity at $121.3 million, and no long-term debt | ($ in millions) | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $24.0 | $8.6 | | Total Current Assets | $126.7 | $114.6 | | Total Assets | $325.9 | $316.7 | | Total Current Liabilities | $87.7 | $78.7 | | Long-term debt, net | $0 | $0 | | Total Liabilities | $204.6 | $197.0 | | Total Stockholders' Equity | $121.3 | $119.7 | [Consolidated Statements of Income](index=7&type=section&id=Consolidated%20Statements%20of%20Income) For Q1 2024, net sales were $91.7 million, resulting in income from operations of $2.3 million and net income of $1.7 million, or $0.04 per diluted share, compared to $2.5 million net income in Q1 2023 | ($ in millions, except per share) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net sales | $91.7 | $102.0 | | Gross profit | $60.3 | $65.5 | | Income from operations | $2.3 | $4.1 | | Net income | $1.7 | $2.5 | | Diluted EPS | $0.04 | $0.06 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2024, the company generated $18.6 million in net cash from operating activities, used $2.7 million in investing activities, and $0.5 million in financing activities, leading to a net cash increase of $15.4 million | ($ in millions) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $18.6 | $25.8 | | Net cash used in investing activities | ($2.7) | ($3.4) | | Net cash used in financing activities | ($0.5) | ($20.8) | | **Net change in cash** | **$15.4** | **$1.6** |
Tile Shop(TTSH) - 2023 Q4 - Annual Report
2024-02-29 22:25
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2023 or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number: 001-35629 TILE SHOP HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 45-5538095 (State or other jur ...
Tile Shop(TTSH) - 2023 Q4 - Earnings Call Transcript
2024-02-29 18:05
Tile Shop Holdings, Inc. (NASDAQ:TTSH) Q4 2023 Earnings Conference Call February 29, 2024 9:00 AM ET Company Participants Mark Davis - Vice President, Investor Relations and Chief Accounting Officer Cabell Lolmaugh - President and Chief Executive Officer Karla Lunan - Senior Vice President and Chief Financial Officer Conference Call Participants Operator Good day, and thank you for standing by. Welcome to the Fourth Quarter 2023 Tile Shop Holdings, Inc. Earnings Conference Call. [Operator Instructions] Plea ...
Tile Shop(TTSH) - 2023 Q4 - Annual Results
2024-02-29 12:30
Exhibit 99.1 THE TILE SHOP REPORTS FOURTH QUARTER AND FULL-YEAR 2023 RESULTS MINNEAPOLIS – February 29, 2024 – 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 fourth quarter and full-year ended December 31, 2023. Fourth Quarter 2023 Summary Net Sales Decreased 3.4% Comparable Store Sales Decreased 3.2% Gross Margin of 64.7% Net Income of $0.6 Million; Adjusted EBITDA of $6.6 Million Diluted Earni ...
Tile Shop(TTSH) - 2023 Q3 - Earnings Call Transcript
2023-11-05 08:22
Tile Shop Holdings, Inc. (NASDAQ:TTSH) Q3 2023 Earnings Conference Call November 2, 2023 9:00 AM ET Company Participants Mark Davis - Vice President, Investor Relations and Chief Accounting Officer Cabell Lolmaugh - President and Chief Executive Officer Karla Lunan - Senior Vice President and Chief Financial Officer Conference Call Participants Maxwell Michaelis - Lake Street Capital Markets Operator Good day. And thank you for standing by. Welcome to the Quarter Three 2023 Tile Shop Holdings, Inc. Earnings ...
Tile Shop(TTSH) - 2023 Q3 - Quarterly Report
2023-11-03 20:50
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________ FORM 10-Q _____________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from – to – Commission file number: 001-35629 _____________________________ TILE SHOP HOLDINGS, INC ...
Tile Shop(TTSH) - 2023 Q2 - Earnings Call Transcript
2023-08-07 05:50
Tile Shop Holdings, Inc. (NASDAQ:TTSH) Q2 2023 Results Earnings Conference Call August 7, 2023 9:00 AM ET Company Participants Mark Davis - Vice President, Investor Relations and Chief Accounting Officer Cabell Lolmaugh - President and Chief Executive Officer Karla Lunan - Senior Vice President and Chief Financial Officer Conference Call Participants Mark Smith - Lake Street Capital Markets Operator Good day. And thank you for standing by. Welcome to the Second Quarter 2023 Tile Shop Holdings, Inc. Earnings ...