Please ensure Javascript is enabled for purposes of website accessibility

Why Tile Shop Holdings, Inc. Stock Popped Today

By Steve Symington - Apr 19, 2016 at 12:24PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The specialty flooring retailer is enjoying a strong start to the year. Here's what investors need to know.


What: Shares of Tile Shop Holdings (TTSH 1.20%) 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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Tile Shop Holdings, Inc. Stock Quote
Tile Shop Holdings, Inc.
$4.23 (1.20%) $0.05

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.