Tile Shop Holdings, Inc. Q1 FY2025 earnings call

• Cabell Lolmaugh noted navigating challenges from lower housing turnover, market volatility, etc., focusing on customer experience and expense management. Mentioned increase in tile volume due to entry-level products, Arbor collection, large format tiles, diversified supplier base (over 25 countries), partnerships with US tile manufacturers, and collaborations with designers like Alison Victoria.
• Mark Davis discussed comparable store sales decrease due to lower traffic, tile volume improvement driven by added products, gross margin increase from lower inventory write-offs and partially offset by customer delivery mix, SG&A details including subleasing of NJ distribution center and expected subleasing income.

Comparable store sales decreased by 4% during the quarter. Tile volume sold increased due to initiatives like expansion of entry-level competitively priced products, addition of Arbor collection of luxury vinyl tile, and growth in large format tiles. Gross margin rate was 66% in the first quarter, a 20 basis point increase compared to first quarter 2024. SG&A expense in the first quarter was $57.9 million, basically in line with prior year but with changes like $700k decrease in depreciation, $400k savings from closing NJ distribution center, $400k reduction in benefits costs, offset by $700k increase in marketing, $300k in training, and $300k in IT expenses.

Mark Davis stated the company believes it is well positioned to navigate challenges with a great assortment, strong balance sheet, and talented team. Also mentioned anticipating $2 million of subleasing income from the NJ distribution center, with half of the benefit reflected in 2025 SG&A and the rest in 2026.

Risks include known and unknown risks from the Private Securities Litigation Reform Act, and external factors such as lower housing turnover, market volatility, consumer confidence concerns, and tariff noise.

Q: A: Q: A: There are no questions at this time.