Tile Shop (TTSH) investor relations material

Executive summary

• Net sales for Q2 2025 decreased 3.4% year-over-year to $88.3 million, with comparable store sales down 3.5% due to lower store traffic and industry headwinds.

• Gross margin declined by 160 basis points to 64.4%, impacted by higher discounting and increased product costs.

• Net income for Q2 2025 was $0.4 million, down from $1.2 million in Q2 2024; adjusted EBITDA fell to $4.9 million from $6.7 million.

• Expanded product assortment, including LVT, laminate, engineered wood, and large format tile, to broaden customer appeal.

• Continued focus on cost control, including distribution center and store closures, workforce reduction, and expense cuts.

Financial highlights

• Six-month net sales fell 3.7% year-over-year to $176.3 million; comparable store sales declined 3.8%.

• Gross profit for Q2 2025 was $56.8 million, down from $60.3 million in Q2 2024.

• Adjusted EBITDA margin for Q2 2025 was 5.6%, compared to 7.4% in Q2 2024.

• Operating cash flow for the first half of 2025 was $13.5 million, funding $6.5 million in capital expenditures.

• Cash and cash equivalents rose to $27.8 million at quarter end, with no outstanding borrowings on the $75 million credit facility.

Outlook and guidance

• Management expects continued pressure from low existing home sales and macroeconomic uncertainty.

• Ongoing evaluation of sourcing and pricing strategies to mitigate tariff and cost pressures.

• Near-term focus on further expense reduction, limiting capital spending, and identifying efficiencies.

• Cash flow, liquidity, and available credit are expected to be sufficient for at least the next twelve months.

• Annualized benefit from closing the Spring Valley, WI distribution center estimated at $1.0 million.