The Tile Shop Reports Fourth Quarter and Full-Year 2024 Results

Core Insights - Tile Shop Holdings, Inc. reported a decline in net sales and comparable store sales for both the fourth quarter and full year of 2024, reflecting ongoing challenges in the home improvement sector [2][3][6] - The company maintained a strong gross margin, with a slight decrease in the fourth quarter compared to the previous year, but an overall improvement for the full year [7][30] - The management expressed optimism about future performance, citing strategic enhancements to product lines and customer service initiatives [3] Fourth Quarter 2024 Summary - Net sales decreased by 5.9% to $79.5 million compared to the fourth quarter of 2023 [2][6] - Comparable store sales also fell by 5.8% during the same period [2][6] - Gross margin was reported at 64.2%, down from 64.7% in the previous year [7][30] - The company incurred a net loss of $0.6 million, translating to a net loss per share of $0.01 [2][3] - Adjusted EBITDA for the quarter was $3.4 million, down from $6.6 million in the fourth quarter of 2023 [11][30] Full-Year 2024 Summary - For the full year, net sales decreased by 8.0% to $347.1 million compared to 2023 [3][6] - Comparable store sales declined by 7.8% year-over-year [3][6] - Gross margin improved to 65.7% from 64.4% in 2023, attributed to lower international freight rates and supplier price reductions [7][30] - The company reported a net income of $2.3 million for the year, down from $10.1 million in 2023 [3][29] - Adjusted EBITDA for the year was $22.6 million, compared to $38.8 million in the previous year [11][30] Management Commentary - CEO Cabell Lolmaugh highlighted the team's execution and strategic initiatives aimed at enhancing product offerings and customer service as key factors for potential recovery in 2025 [3] Capital Structure and Liquidity - As of December 31, 2024, the company had no debt and $21.0 million in cash [10][27] - The company maintained a stable number of stores, with 142 locations at year-end [2][3] Tax Provision - The benefit from income taxes was $0.2 million in the fourth quarter of 2024, compared to a provision of $0.6 million in the same quarter of 2023 [9] - The effective tax rate decreased to 25.9% in the fourth quarter of 2024 from 48.1% in the previous year [9] Return on Capital Employed - The pretax return on capital employed was reported at 2.9% for the trailing twelve months ending December 31, 2024, a significant decrease from 12.4% in the prior year [14]