Tile Shop Holdings, Inc. reported its financial results for the second quarter and first half of 2025, revealing a decline in both revenue and profitability compared to the same periods in 2024. For the three months ended June 30, 2025, the company generated net sales of $88.3 million, a decrease of 3.4% from $91.4 million in the prior year. The six-month figures also reflected a decline, with net sales totaling $176.3 million, down 3.7% from $183.1 million. The company's net income for the second quarter was $392,000, significantly lower than the $1.2 million reported in the same quarter of 2024, while the six-month net income fell to $564,000 from $2.9 million.
The decrease in revenue was attributed to a decline in customer traffic, which led to a 3.5% drop in comparable store sales for the second quarter and a 3.8% decline for the first half of 2025. The gross margin rate also decreased, falling to 64.4% in the second quarter from 66.0% in the previous year, primarily due to increased discounting and rising product costs. Selling, general, and administrative expenses decreased by 3.6% to $56.4 million in the second quarter, driven by reduced marketing costs and the closure of a distribution center.
In terms of operational changes, Tile Shop Holdings closed its distribution center in Spring Valley, Wisconsin, during the second quarter, which is expected to yield annual savings of approximately $1 million. The company also closed one store at the end of its lease term and plans to close another in the third quarter. As of June 30, 2025, the company operated 141 stores across 31 states and the District of Columbia, maintaining an average store size of about 20,000 square feet.
The company’s balance sheet showed total assets of $324.1 million as of June 30, 2025, a slight increase from $319.6 million at the end of 2024. Cash and cash equivalents rose to $27.8 million from $21.0 million, while total liabilities increased to $200.2 million from $196.7 million. Tile Shop Holdings had no outstanding borrowings on its revolving line of credit, which has a capacity of $75 million, and reported $73.8 million available for future borrowing.
Looking ahead, Tile Shop Holdings faces challenges from ongoing macroeconomic factors, including inflation and supply chain disruptions, which may impact consumer spending and product availability. The company is evaluating strategic options to manage these cost pressures, including potential sourcing adjustments. Despite the current challenges, management remains focused on leveraging its supplier relationships and product offerings to navigate the evolving market landscape.
About TILE SHOP HOLDINGS, INC.
The Tile Shop is a specialty retailer offering a broad selection of natural stone, man-made, and luxury vinyl tiles, along with installation and maintenance materials. Serving homeowners and professionals across the U.S., it emphasizes product variety, proprietary brands, customer service, and efficient distribution. The company leverages global sourcing, in-store showrooms, and an integrated online platform to deliver high-quality products at competitive prices.
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