Tile Shop Holdings, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, revealing a decline in both revenue and profitability compared to the same periods in 2023.
For the three months ended September 30, 2024, net sales totaled $84.5 million, down from $92.1 million in the prior year, marking an 8.3% decrease. Similarly, net sales for the nine months were $267.6 million, a decline of 8.6% from $292.7 million in 2023. The decrease in sales was attributed to lower customer traffic, with comparable store sales down 7.9% for the quarter and 8.4% for the nine months.
Gross profit for the third quarter was $56.2 million, representing a gross margin rate of 66.5%, an improvement from 64.7% in the same quarter of 2023. However, gross profit for the nine months decreased to $176.9 million from $188.4 million in the previous year. Income from operations fell significantly, with only $250,000 reported for the third quarter compared to $2.8 million in 2023, and $4.4 million for the nine months, down from $14.7 million.
Net income also saw a substantial decline, with only $41,000 for the third quarter compared to $1.8 million in the same period last year. For the nine months, net income was $2.9 million, down from $9.4 million in 2023. Basic earnings per share reflected this downturn, with $0.00 for the third quarter and $0.07 for the nine months, compared to $0.04 and $0.22, respectively, in the prior year.
Despite these challenges, Tile Shop Holdings reported an increase in cash and cash equivalents, which rose to $25.1 million as of September 30, 2024, up from $8.6 million at the end of 2023. The company also noted a reduction in selling, general, and administrative expenses, which decreased by 1.2% to $56.0 million in the third quarter, driven by lower variable compensation and advertising costs.
Strategically, the company anticipates annualized reductions in SG&A expenses of $2.8 million to $4.1 million due to operational changes, including the closure of its Dayton, New Jersey distribution center. Additionally, Tile Shop Holdings is addressing a material weakness identified in its IT General Controls, implementing remediation plans to enhance financial reporting and transaction cycles.
As of September 30, 2024, the company operated 142 stores across 31 states and the District of Columbia, with an average store size of approximately 20,000 square feet. The overall market conditions, including high interest rates and a slowdown in home turnover, have impacted demand for home improvement products, contributing to the company's performance challenges.
About TILE SHOP HOLDINGS, INC.
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