Tile Shop(US:TTSH)2024-11-07 12:30Financial Performance - Net sales for Q3 2024 decreased by $7.6 million, or 8.3%, compared to Q3 2023, with comparable store sales down 7.9% due to decreased traffic[5] - Net income for Q3 2024 was $41 thousand, a significant decline from $1.8 million in Q3 2023[3] - Adjusted EBITDA for Q3 2024 was $5.0 million, down from $8.3 million in Q3 2023, representing 6.0% of net sales[10] - Net sales for the three months ended September 30, 2024, were $84.5 million, a decrease of 8.7% compared to $92.1 million for the same period in 2023[25] - Net income for the nine months ended September 30, 2024, was $2.9 million, a significant decrease from $9.4 million in the same period of 2023[25][27] Cost and Margin Analysis - Gross margin improved to 66.5% in Q3 2024 from 64.7% in Q3 2023, primarily due to decreases in product costs[6] - Selling, general, and administrative expenses decreased by $0.7 million, or 1.2%, from $56.7 million in Q3 2023 to $56.0 million in Q3 2024[6] - Gross profit for the nine months ended September 30, 2024, was $176.9 million, down from $188.4 million in the same period of 2023, reflecting a gross margin rate of 66.1% compared to 64.4%[25][26] - Selling, general and administrative expenses for the nine months ended September 30, 2024, were $172.5 million, slightly down from $173.7 million in the same period of 2023[25] Operational Efficiency - The company anticipates annualized SG&A expense reductions of $2.8 million to $4.1 million from recent operational adjustments, including closing a distribution center[7] - The company plans to continue focusing on operational efficiency and cost management to improve profitability in the upcoming quarters[25] Cash and Assets - The company remains debt-free with $25.1 million in cash and no borrowings on its $75 million line of credit as of September 30, 2024[9] - Cash and cash equivalents rose to $25.1 million as of September 30, 2024, from $8.6 million at December 31, 2023[24][27] - Total current assets increased to $123.2 million as of September 30, 2024, compared to $114.6 million at December 31, 2023[24] Tax and Liabilities - The effective tax rate increased to 77.0% in Q3 2024 from 22.4% in Q3 2023, largely due to a decrease in pre-tax income[8] - Total liabilities increased slightly to $197.5 million as of September 30, 2024, compared to $197.0 million at December 31, 2023[24] Store Operations - The number of stores open at the end of Q3 2024 was 142, unchanged from the previous year[3] - Pretax Return on Capital Employed was 4.8% for the trailing twelve months as of Q3 2024, down from 12.4% in the prior year[13]