Shares of Tile Shop Holdings, Inc. TTSH have gained 14.8% since the company reported its earnings for the quarter ended March 31, 2025, outperforming the S&P 500 Index’s modest 0.5% rise during the same period. Over the past month, TTSH stock has risen 11.1%, while the broader index has gained 4.3%.
Q1 Performance Snapshot
For the first quarter of 2025, Tile Shop reported net sales of $88 million, a decline of 4.1% year over year from $91.7 million. Comparable store sales dropped 4% year over year, which management attributed to a decrease in store traffic. Net income fell sharply to $172,000 from $1.7 million in the prior-year period, translating to diluted earnings per share of $0.00 compared with $0.04 in the prior year.
Adjusted EBITDA also declined 38.4% to $4.6 million, or 5.2% of net sales, from $7.4 million, or 8.1% of net sales, a year ago. Despite the revenue decline, gross margin improved 20 basis points to 66% from 65.8%, driven by lower inventory write-offs, partially offset by higher delivery costs.
Tile Shop Holdings, Inc. Price, Consensus and EPS Surprise
Tile Shop Holdings, Inc. price-consensus-eps-surprise-chart | Tile Shop Holdings, Inc. Quote
Other Key Business Metrics
Total operating income declined sharply to $183,000 from $2.3 million, compressing the operating margin to 0.2% from 2.5%. Selling, general, and administrative (SG&A) expenses declined 0.3% year over year to $57.9 million from $58 million. The decrease was primarily due to a $0.7 million decrease in depreciation, a $0.4 million decrease associated with the closure of one distribution center in the third quarter of 2024 and a $0.4 million decrease in benefits. These factors were partially offset by a $0.7 million increase in advertising costs, a $0.3 million increase in training and a $0.3 million uptick in IT expenses.
Tile Shop ended the quarter with $27.1 million in cash and no outstanding debt, up from $20.9 million in cash at the end of 2024. Operating cash flow totaled $9.9 million in the quarter compared with $18.6 million in the year-ago period.
Pretax Return on Capital Employed fell to 1.2% on a trailing 12-month basis, down from 11.3% a year earlier, reflecting ongoing margin and profitability pressures.
Management Commentary
CEO Cabell Lolmaugh acknowledged the continuing impact of low housing turnover and macro headwinds such as tariffs and cautious consumer sentiment. Still, management emphasized their strategy of focusing on controllable factors — improving customer experience and managing costs. A key highlight was the increase in tile volume sold during the quarter, which the company attributed to an expanded product assortment, particularly entry-level options and the Arbour collection of luxury vinyl tile. This volume growth occurred despite lower average selling prices, suggesting that new offerings are resonating with value-conscious consumers.