The Tile Shop Reports First Quarter 2025 Results

Financial Performance - Net sales for the first quarter of 2025 decreased by $3.7 million, or 4.1%, compared to the first quarter of 2024, with comparable store sales also declining by 4.0% due to decreased traffic [2][5] - Gross profit decreased by $2.2 million, or 3.7%, but the gross margin rate improved by 20 basis points to 66.0% compared to 65.8% in the prior year, attributed to lower inventory write-offs [6] - Net income for the first quarter of 2025 was $0.2 million, a significant decrease from $1.7 million in the same period of 2024, with adjusted EBITDA falling to $4.6 million from $7.4 million [2][10][27] Operational Insights - The company maintained a gross margin of 66.0% and reported income from operations as a percentage of net sales at 0.2%, down from 2.5% in the previous year [2][28] - Selling, general, and administrative expenses slightly decreased by $0.1 million, primarily due to reductions in depreciation and costs associated with the closure of a distribution center [7] - The company had no debt outstanding and reported cash and cash equivalents of $27.1 million at the end of the quarter, an increase from $21.0 million at the end of 2024 [9][25] Management Strategy - The CEO emphasized the focus on innovation and customer experience, particularly for professional customers, while also addressing cost pressures from recent U.S. trade policy changes, including increased tariffs [3] - The company is evaluating multiple options to manage anticipated cost pressures, including sourcing adjustments and pricing strategies, leveraging a diversified supplier base [3] Market Position - As of March 31, 2025, the company operated 142 stores across 31 states and the District of Columbia, maintaining the same number of stores as the previous year [22] - The company continues to be a specialty retailer of natural stone, man-made, and luxury vinyl tiles, with a commitment to high-quality products and exceptional customer service [22]