Tile Shop (TTSH) 8 Aug 242024 Q2 Earnings call transcript

Thank you for standing by. My name is Max, and I will be your conference operator for today. At this time, I would like to welcome everyone to the Second Quarter 2024 Tile Shop Holdings, Inc. Earnings Conference Call. [Operator Instructions] Thank you. Well, I would like to turn the call over to Ken Cooper, Investor Relations. Please go ahead.

morning good and you, to everyone. Thank the to Tile Shop's call. earnings quarter second Welcome

obligation are Chief provisions during Lolmaugh, Mark me of pursuant Cab Joining today the within our constitute statements release non-GAAP earlier website. With this update Chief meaning SEC. to Officer. Certain to and of are call statements. Today's also today press safe Davis, Financial Executive earnings which our statements these financial call with non-GAAP measurements. made harbor made see of the the forward-looking made of our of our filings and as Officer; a to posted let unknown in Such differ described measures, company call, the cause subject to are the the that, Litigation Act and Reform statements in will statements. Those could forward-looking such Private forward-looking me for from that today of known materially include over forward-looking to risks, and risks on Securities statements Please issued earnings actual any reconciliation are Cab. uncertainties and we results XXXX release call date as our amended. our uncertainties and those also has do both and been certain turn the The undertake not

and lower of despite stores. which has created across comparable Good our improvement the a many in proud our resulted team's continued in trends, contributed of in levels you Thank for the We update I'm sales business. quarter, joining challenges store softness improvement to morning, which thank Ken. sales. everyone, in and an execution you, did our industry existing us today on for sequential second traffic this during for home home

I'm we persist, by headwinds key several made have initiatives. external progress on the While encouraged

of by Pro levelers second as customers installation during and are line used and virtually includes label First, sold This Superior of the name both tile quarter. that enhanced such thinsets private products and the brand every type under out line our we rolled products retail project.

made to have the strides completing to to of quality, formulas. It's these new give Superior note initiative Over everyone and the the to customers. that sales improve we line. Superior for invested our the our performance strategy significant our events advancing product holding our we XX past the After time training teams months, part is of opportunity our relationships work professional our with Pros important to deepen with our also steps

steps Pros product attract relates it tile has to of believe important of building further position earlier, with our products. to penetration additional priced to noted expansion budget. smaller at I price projects middle-market use the products. our will piece complete on create believe complete. headway our virtually to assortment to competitively installation line they We're in significant relationships will this cross-selling us this this we As business. We customers Over opportunities as segment, customer in assortment priced We more from Pro and we project believe looking bigger taken this into products our have a expand our point to competitive every get offer a ability improve combined a strengthen installation time, also tile entry-level entry-level made products customers. We've a of our quality, with tile seeking

end seeking strengthens complete to Additionally, Pros, customers. we competitive with assortment projects believe our expanded position their cost-effective our for

line the building anticipate and are in our with So success the on year. we of goals, entry-level tracking far, half our of in sales second products

hand to the of XXXX made for when increase our investments continued second date we to attention same runway have our continued in our grow on the I'll to XX% capabilities rates period during helped over website. The have and sites the traffic e-commerce orders in We've by both to a call see now us XXXX. compared Mark. conversion online long in Turning our to over believe an growth. With quarter and that,

everyone. morning, Good Cab. Thanks,

comparable Second compared That when saw second levels sales stores X.X% a compared comparable to quarter XXX store said, sales point lower last decreased store to XXXX by in improvement. of the traffic. due quarter to quarter of basis

had benefited facing the the teams, this not an of our we Easter, the in been result shift timing While of easier would our and sales compare have execution without possible industry. given from strong headwinds

from gross the to XXX point compared rate the XX%, to and a a basis point margin increased the second which quarter basis increase first XXXX. quarter during Our when represents XX quarter, second of improvement

and have quarters, freight lower secure helped have successfully international points, costs. products to able price our As rates offered inventory in at which we reduce recent we've been outlined our fallen, in assortment

million that $X.X were million SG&A in Second to second quarter in increase attributable XXXX. a was higher incentive quarter was bonus XXXX. XXXX primarily and $XX.X partially expenses release expense of expenses accruals of was than to quarter due quarter second in $X.X repeated expense SG&A not increase second that the our of million of SG&A certain in during the bonus a The long-term

in $XXX,XXX to expenses with increased $XXX,XXX due in digital compensation by a and in and a occupancy and year. increase an offset increases $XXX,XXX increased Additionally, by expenses. These in partially $XXX,XXX costs, expenses leases variable expense rent to marketing the increased advertising licensing that due in IT-related by decrease associated costs software last were depreciation expense increase decrease were due extended expenses. to over an $XXX,XXX by increase

of asset of the the related quarter, charges certain write-down $XXX,XXX impairment to recorded we assets. store During

to of generated Cab balance of of as the debt. great to to sheet a enhancements our the ended flow $XX.X strong our positioned no XXXX, sheet making challenges any customers. With environment the believe We team, with the million Turning balance and quarter take information. XX, we and of flow serve navigate and we're million June the with happy current cash $XX.X are bank well cash to and I we're questions. operating attention We cash that,

the back turn will questions. Instructions] over now to closing for I Cooper conference [Operator There Ken no remarks. are

conference to you call. you Thank Form day. XX-Q Shop, Thank listening filing and our great today. later a your anticipate earnings We have for Tile in interest for our

conference This call. concludes today's

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