Tandy Leather Reports Q2 2025 Financial Results with Net Loss Despite Sales Increase

Tandy Leather Factory, Inc. reported its financial results for the second quarter of 2025, revealing a modest increase in net sales and a net loss for the quarter. For the three months ended June 30, 2025, the company generated net sales of $17.8 million, a 2.8% increase from $17.3 million in the same period last year. Gross profit also rose to $10.6 million, up 5.5% from $10.0 million, resulting in a gross margin of 59.5%. However, operating expenses increased by 5.5% to $10.5 million, leading to a slight income from operations of $66,000, compared to $63,000 in the prior year. The company reported a net loss of $199,000 for the quarter, contrasting with a net income of $101,000 in the same period of 2024.

In the first half of 2025, Tandy Leather's net sales reached $36.8 million, a 0.7% increase from $36.6 million in the first half of 2024. Gross profit for this period was $21.3 million, reflecting a 1.7% increase year-over-year. However, operating expenses also rose, leading to a significant decline in income from operations, which fell to $328,000 from $712,000 in the previous year. The effective income tax rate for the first half of 2025 was 32.7%, compared to 27.0% in 2024, primarily due to tax benefits from the sale of corporate property.

Strategically, Tandy Leather has made significant organizational changes, including the sale of its corporate headquarters in Fort Worth, Texas, for $24.9 million, which resulted in a gain of $17.7 million recorded as other income. 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 CEO in January 2025, succeeding Janet Carr, who resigned earlier that month.

Operationally, Tandy Leather maintained a total of 101 retail stores as of June 30, 2025, with 91 in the U.S., nine in Canada, and one in Spain. The company continues to focus on enhancing its customer engagement through its retail and online platforms, which serve as critical channels for sales and community building among leathercraft enthusiasts. The company reported cash and cash equivalents of $16.4 million at the end of the quarter, an increase from $13.3 million at the end of 2024.

Looking ahead, Tandy Leather aims to improve its financial sustainability and profitability by managing operating expenses and gross margins while selectively investing in growth opportunities. The company remains cautious about potential economic headwinds but is committed to rebuilding a durable and profitable business model. The management's outlook reflects a focus on leveraging its brand strength and customer loyalty to navigate the evolving market landscape.