What: Shares of Tile Shop Holdings (NASDAQ:TTS) were up 14.2% as of 12:30 p.m. Tuesday after the specialty flooring retailer announced better-than-expected third-quarter results.

So what: Quarterly revenue rose 15.3% year over year to $72.4 million, driven by a combination of new locations and 9.7% comparable-store sales growth. Meanwhile, adjusted net income jumped 143.8% over the same period to $3.9 million, or $0.08 per share. Adjusted earnings before interest, taxes, depreciation and amortization also climbed 40% to $13.9 million. Analysts, on average, were anticipating adjusted earnings of just $0.06 per share on revenue of $69.4 million.

"The progress made on our key initiatives continues to yield positive returns," explained Tile Shop CEO Chris Homeister, "and our third quarter represented an important milestone in delivering improved operating leverage and significant earnings growth versus last year. Meaningful sequential improvements in both comparable store sales growth and gross margin were key to our results."

Now what: Tile Shop also increased full-year guidance. As it stands, Tile Shop now anticipates 2015 net sales of $289 million to $292 million (compared to $280 million to $290 million previously), Adjusted EBITDA of $57 million to $60 million (up from $55 million to $60 million previously), and adjusted earnings per share of $0.31 to $0.33 (an increase from the prior range of $0.28 to $0.33). Tile Shop also continues to expect comps to increase in the mid-single-digit range this year. By contrast, consensus estimates predicted Tile Shop would achieve lower 2015 revenue of $288 million, and earnings at the bottom end of its new expected range.

In the end, this was a marked improvement -- at least relative to analysts' expectations -- over Tile Shop's more modest guidance raise in Q2, which disappointed Wall Street three months ago. Keeping in mind shares were still down more than 10% between then and yesterday's close, it's hard the blame the market for so aggressively bidding up Tile Shop stock today.

Steve Symington has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Tile Shop Holdings. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.