Tile Shop (TTS) Prelim. Q3 Revenue Comes in Light

Tile Shop Holdings, Inc. (NASDAQ: TTS) (the “Company”), a specialty retailer of manufactured and natural stone tiles, setting and maintenance materials, and related accessories, today announced preliminary results for its third quarter ended September 30, 2017.

Net sales is expected to grow approximately 7% to approximately $84 million for the third quarter ended September 30, 2017 compared with $78.6 million for the third quarter ended September 30, 2016. Comparable store sales growth for the third quarter is expected to approximate 1%. Comparable store sales growth for the third quarter of 2016 was 5.7%. Gross margin for the third quarter of 2017 is expected to be approximately 66 to 67% compared with 70.2% for the third quarter of 2016. Selling, general and administrative costs for the third quarter of 2017 are expected to be approximately $52 million compared with $47.4 million for the third quarter of 2016.

(Street sees Q3 revenue of $87.17 million)

“A more competitive environment led to weaker than expected results in our third quarter,” said CEO Chris Homeister. “Additionally, we are seeing increased demand for opening price point offerings, and are in the process of introducing new products to our assortment as a result. In response to these challenges, we increased our promotions, competitive pricing and advertising in the quarter. When we increased these items, we achieved better results in both sales and gross profit dollars. However, this activity in combination with product mix changes will result in a meaningfully lower gross margin percentage in the third quarter. We are focused on completing our annual product transition, adding more opening price point products to the assortment and making refinements to our approach on promotions.”

The Company notes that its prior expectations for the full year ending December 31, 2017 provided on July 18, 2017 are no longer applicable.

The Company will release financial results for the third quarter ended September 30, 2017 at 8:00 a.m. Eastern Time on Tuesday, October 17, 2017. The Company will host a conference call via live webcast for investors and other interested parties beginning at 9:00 a.m. Eastern Time on Tuesday, October 17, 2017. Participants may access the live webcast by visiting the Company’s investor relations website at www.tileshop.com. The call can also be accessed by dialing (844) 421-0597, or (716) 247-5787 for international participants. A webcast replay of the call will be available on the Company’s Investor Relations website at www.tileshop.com

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