Tile Shop Holdings reported a 10.1% decrease in net sales for the first quarter of 2024, which ended on March 31. The decrease in net sales was accompanied by a 10.2% drop in comparable store sales.
The specialty retailer, which offers natural stone, tile, LVT, installation and maintenance materials, reported net income for the quarter of $1.7 million, with a gross margin of 65.8%.
Tile Shop attributes this decline to lower levels of traffic in its stores, which was in part driven by continued softness in existing home sales. The company’s management noted that the decrease in store traffic had an adverse impact on its financial performance for the quarter. In addition to the decrease in sales, Tile Shop also saw its gross profit decrease by 8.0% to $65.8 million. The company was able to improve its gross margin rate by 160 basis points, citing lower levels of international freight and a decrease in product costs as contributing factors. Tile Shop did see a slight decrease in selling, general, and administrative expenses, which dropped by 5.5% to $58.0 million for the quarter. The company’s provision for income taxes also decreased from $0.8 million in the first quarter of 2023 to $0.4 million in the first quarter of 2024.
Despite the decrease in sales, Tile Shop’s CEO Cabell Lolmaugh expressed optimism about the company’s performance in the first quarter.
“Despite these challenges, we saw an improvement in our gross margin rate and were able to generate strong operating cash flow,” Lolmaugh said. “Additionally, we were able to make significant inroads executing our key strategies and controlling costs.”
Looking ahead, Tile Shop remains focused on executing its key strategic initiatives and driving long-term growth. The company currently operates 142 stores across 31 states and the District of Columbia. Tile Shop plans to host a webcast and conference call on May 9, 2024 to discuss its first quarter financial results in more detail. The company will also make the call available for replay on its website. Based in Minneapolis, Tile Shop is a specialty retailer that offers a variety of natural stone, man-made, and luxury vinyl tiles, as well as setting and maintenance materials. The company is a leading tile retailer in the United States, known for its extensive product selection and customer service.
