Tile Shop Hldgs, Inc. (NASDAQ:TTS) released preliminary report for its third quarter closed September 30, 2017. Net sales is anticipated to grow around 7% to nearly $84 million for the third quarter closed September 30, 2017 versus $78.6 million for the third quarter closed September 30, 2016.
For Q3 2017, comparable store sales growth is anticipated to approximate 1% compared to 5.7% in the Q3 2016. Gross margin is anticipated to be approximately 66% to 67% versus 70.2% for the Q3 2016. S,G&A costs for the Q3 2017 is projected to be around $52 million as against $47.4 million for the same period, a year ago.
Chris Homeister, the CEO of Tile Shop Hldgs, expressed that a more competitive environment resulted in weaker than anticipated results in their third quarter. Additionally, they are witnessing growing demand for opening price point offerings. The company is in the process of launching new products to their assortment.
In response to the open challenges, the company had increased promotions, advertising and competitive pricing in the quarter. As a result, there was an increase in both gross profit and sales. However, these measures coupled with product mix changes will lead in a meaningfully lower gross margin fraction in the third quarter. The company is focused on completing its yearly product transition, including more opening price point offerings to the assortment and making refinements to its approach on promotions.
Tile Shop Hldgs stated that its prior projections for the full year closing December 31, 2017 issued on July 18, 2017 are no longer relevant. The firm will release financial report for the third quarter closed September 30, 2017 on Tuesday, October 17, 2017. It will host a conference call through live webcast for shareholders and other interested parties on same day. Participants may access the live conference call webcast by visiting the firm’s investor relations website.