Tile Shop(US:TTSH) ZACKSยท2024-11-07 17:35Core Insights - Tile Shop Holdings, Inc. (TTSH) reported breakeven earnings per share (EPS) in Q3 2024, compared to an EPS of 4 cents in the same quarter last year [1] Revenue Performance - TTSH registered revenues of $84.5 million in Q3 2024, reflecting an 8.3% decline year over year [2] - Comparable store sales decreased by 7.9% year over year, primarily due to reduced customer traffic [2] Gross Margin Analysis - Gross profit for Tile Shop declined by 5.6% year over year to $56.2 million [3] - The gross margin improved to 66.5% in Q3 2024 from 64.7% in the prior year, marking a 187 basis points expansion attributed to lower product costs [3] Operating Expenses - Selling, general, and administrative expenses decreased by 1.3% year over year to $55.9 million [4] Profitability Metrics - Operating income totaled $0.3 million, a significant decrease of 91.2% from the previous year [5] - The operating margin contracted by 278 basis points to 0.3% [5] - Net income was $0.04 million compared to $1.8 million in the same quarter last year [5] - Adjusted EBITDA for the quarter was $5 million, down 38.9% year over year [5] Liquidity and Cash Flow - Tile Shop ended Q3 2024 with cash and cash equivalents of $25.1 million, slightly down from $25.3 million at the end of Q2 [6] - Cumulative net cash provided by operating activities was $28.5 million, down from $56.2 million a year ago [6] Overall Assessment - The company experienced disappointing top-line and bottom-line results in Q3 2024, with a concerning decline in comparable store sales and operating margin contraction [7] - However, the expansion in gross margin is a positive sign, and management is enhancing e-commerce capabilities despite ongoing challenges in the home improvement industry [7]