IMAGE SOURCE: TILE SHOP HOLDINGS.

What: Shares of Tile Shop Holdings (NASDAQ:TTS) rose nearly 16% Tuesday after the company announced stronger-than-expected first-quarter 2016 results.

So what: Quarterly revenue increased 16.1% year over year, to $84.7 million, driven by a combination of new stores and 13.2% comparable-store sales growth. Gross margin also increased 60 basis points to 70.5%, thanks to improved margin on customer delivery revenue and inventory control process improvements. That translated to adjusted net income of $7.2 million, up from $4 million in last year's first quarter, and adjusted earnings per diluted share of $0.14, up from $0.08 per share in the same year-ago period. 

Analysts, on average, were expecting adjusted earnings of just $0.11 per share on revenue of $80 million. 

Tile Shop Holdings CEO Chris Homeister called it a "tremendous start to 2016" and said that "[o]ur continued efforts against our key initiatives concluded with another quarter of very strong results and significant momentum for our business." 

Now what: As a result, Tile Shop also increased its full-year outlook, calling for revenue of $320 million to $329 million (up from previous guidance for $312 million to $325 million), comparable-store sales growth in the mid to high single digits (up from low to mid single digits previously), gross margin of 70% (up from 69% to 70%), and adjusted earnings per share of $0.40 to $0.45 (compared to previous guidance of $0.37 to $0.43). By comparison, analysts' consensus estimates called for full-year 2016 revenue of $320.7 million, and earnings of $0.41 per share. 

In the end, this is a cut-and-dried case of Tile Shop continuing to deliver on its strategic initiatives and outperforming expectations. Given appeased concerns of slowing growth and on the heels of a solid first year under Homeister, who took the reins at the beginning of 2015, I think investors are right to celebrate the continued momentum Tile Shop demonstrated today.