LONDON, UK / ACCESSWIRE / July 25, 2018 / If you want access to our free earnings report on Tile Shop Holdings, Inc. (NASDAQ: TTS), all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=TTS. Tile Shop reported its second quarter fiscal 2018 operating and financial results on July 19, 2018. The stone tile retailer's revenue grew 3.9% on a y-o-y basis. Additionally, the Company provided guidance for FY18. Register today and get access to over 1,000 Free Research Reports by joining our site below:
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Earnings Highlights and Summary
Tile Shop's net sales increased 3.9% from $89.5 million in Q2 2017 to $92.9 million in Q2 2018, the increase was due to $5.0 million in net sales generated by stores not included in the comparable store base, partially offset by a comparable store sales decrease of 1.8%, or $1.6 million. The Company's reported numbers exceeded analysts' estimates of $90.2 million.
During Q2 2018, Tile Shop's gross profit rose 4.8% to $65.3 million to $62.3 million in Q2 2017 of 2018. The gross margin rate was 70.3% for the reported quarter, and 69.7% for the prior year's corresponding quarter. The improvement in the gross margin was primarily due to decreased promotional activity.
For Q2 2018, Tile Shop's selling, general, and administrative (SG&A) expenses increased 14.2% to $57.9 million from $50.7 million in Q2 2017, driven primarily by investments in store and warehouse staff compensation, the addition of regional sales leader positions, costs associated with opening and operating ten new stores over the past twelve months, and increased shipping costs. The Company's SG&A expenses fpr the reported quarter results had approximately $2.0 million of planned strategic investments in store compensation, regional sales leadership, website design, and customer relationship management capabilities.
Tile Shop reported net income of $4.96 million, or $0.10 per diluted share, in Q2 2018 compared to $7.72 million, or $0.15 per diluted share, in Q2 2017. The Company's reported numbers beat Wall Street's estimates of $0.09 per share.
Reflecting Tile Shop's continued strengthening of its product assortment, inventory increased to $100.4 million from $88.3 million at the end of Q1 2018. The increase in the reported quarter was higher than expected, as the Company was able to work with suppliers to accelerate the shipment of certain new products.
Tile Shop's long-term debt increased $4.3 million from $25.2 million in Q1 2018 to $29.5 million in Q2 2018. The increase was attributable to the expansion of the Company's product assortment resulting in an increase in inventory and capital investments associated with store remodels and merchandising.
Tile Shop's Board of Directors has declared a quarterly dividend of $0.05 per common share. The dividend is payable August 10, 2018, to shareholders of record at the close of business on July 30, 2018.
As of June 30, 2018, Tile Shop operated 140 stores in 31 states and the District of Columbia. The Company also remodeled three stores in the reported quarter.
For full year 2018, Tile Shop is forecasting capital investment of approximately $32 million, including remodeling and store display investment to support its product presentation strategy. The Company is expecting inventory investment of approximately 10% to 20% on a y-o-y basis.
For FY18, Tile Shop expects SG&A expense increase of approximately $7 million to support its service strategy. The approximately $7 million increase in SG&A expense is incremental to the expected SG&A expense increases associated with a full year of operations for the fifteen stores opened in FY17 and the three new stores opening in FY18.
Tile Shop noted that on longer term, it is committed to achieving both adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) margin and pretax return on capital employed of greater than 20%.
Stock Performance Snapshot
July 24, 2018 - At Tuesday's closing bell, Tile Shop's stock declined 1.69%, ending the trading session at $8.70.
Volume traded for the day: 882.42 thousand shares, which was above the 3-month average volume of 668.10 thousand shares.
Stock performance in the last month - up 10.13%; and previous three-month period - up 29.85%
After yesterday's close, Tile Shop's market cap was at $430.65 million.
Price to Earnings (P/E) ratio was at 39.73.
The stock has a dividend yield of 2.30%.
The stock is part of the Services sector, categorized under the Home Improvement Stores industry.
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