Tile Shop (TTS) Misses Q4 EPS by 10c; Comps Fall 4.9%

Tile Shop (NASDAQ: TTS) reported Q4 EPS of ($0.05), $0.10 worse than the analyst estimate of $0.05. Revenue for the quarter came in at $78.6 million versus the consensus estimate of $84.22 million. Comparable Store Sales Declined 4.9% in Q4.

OUTLOOK

The Company’s return to its historical focus on product, service, and presentation, rather than price, will likely result in continued volatility of comparable store traffic and sales in the near term. As a result, the Company is limiting its outlook to the following:

• Three new store openings in 2018 including one store in Hartford, CT that opened on January 19, 2018 and one store in Austin, TX that opened on January 31, 2018.
• Capital investment of approximately $27 to $32 million, including remodeling approximately 30 stores to support our product presentation strategy.
• Inventory investment of approximately 25% to 35% year over year, over the next several quarters, to support our product assortment strategy.
• SG&A expense increase of approximately $5 to $7 million to support our service strategy, including increased expenses for (1) the addition of regional sales leader positions, (2) sales and warehouse staff compensation, and (3) customer relationship management and content management capabilities. The $5 to $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 2017 and the three new stores opening in 2018.

For earnings history and earnings-related data on Tile Shop (TTS) click here.

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