Tandy Leather Reports $12.7 Million Net Income in Q1 2025, Completes Sale of Headquarters

Tandy Leather Factory, Inc. reported its financial results for the first quarter of 2025, revealing a net income of $12.7 million, a significant increase from $525,000 in the same period last year. This translates to a basic earnings per share of $1.49, compared to $0.06 in the prior year. The company’s net sales for the quarter were $19.0 million, down 1.2% from $19.3 million in the first quarter of 2024. The decrease in sales was attributed to temporary store closures related to relocations and ongoing weak consumer demand amid global uncertainties.

The company’s gross profit for the quarter was $10.7 million, reflecting a slight decline of 1.8% from $10.9 million in the previous year. The gross margin percentage decreased by 40 basis points to 56.3%, primarily due to increased promotional activity. Operating expenses rose by 1.8% to $10.5 million, driven by higher employment costs and occupancy expenses associated with the new corporate headquarters. The income from operations fell to $262,000, a decrease of 59.6% compared to the previous year.

In a strategic move, Tandy Leather completed the sale of its corporate headquarters and distribution facilities in Fort Worth, Texas, for net proceeds of $24.9 million, resulting in a gain of $17.7 million. The company has signed a 10-year lease for new headquarters in Benbrook, Texas, effective September 1, 2025. Additionally, Johan Hedberg was appointed as the new Chief Executive Officer on January 6, 2025, following the resignation of Janet Carr.

As of March 31, 2025, Tandy Leather operated 101 retail stores, including 91 in the U.S., nine in Canada, and one in Spain. The company reported cash and cash equivalents of $23.6 million, an increase from $12.3 million a year earlier. The cash flow from investing activities was notably positive, with $23.6 million generated primarily from the sale of the headquarters. However, cash used in operating activities was negative at $536,000, contrasting with a positive cash flow of $1.1 million in the same quarter of 2024.

Looking ahead, Tandy Leather aims to focus on improving financial sustainability and profitability while managing operating expenses and gross margins. The company plans to continue investing selectively in profitable sales growth, despite potential economic headwinds. The management remains committed to rebuilding a durable and profitable business model, emphasizing the importance of their retail stores and online presence in fostering customer engagement and loyalty.