After this morning’s earnings and revenue miss, shares of tile retailer and manufacturer Tile Shop (TTS 15.15, -5.10) trade 25.2% lower to near 15 month lows dating back to April of last year. However, the bad news didn’t stop at the top and bottom line, as a further look into the results showed a steep comparable store sale miss, fueled by a weak April.
Namely, TTS is being crushed on the Q2 miss, as earnings of $0.15 and revenues of $89.5 million failed to live up to street expectations.
The increase in net sales was due to a comparable store sales increase of 0.5%, or $0.5 million, and incremental net sales of $4.7 million from stores not included in the comparable store base. TTS noted that comparable store sales growth was mid-single digit over the two month period of May and June, but this was mostly offset by a decline in April. Comparable store sales growth for the second quarter of 2016 was 8.2%.
Pressuring shares further, TTS also tweaked FY17 guidance lower and now sees earnings per share for the period of $0.49-0.56, down from $0.50-0.57. Revenue guidance for the period was also lowered, on the high end, to $350-365 million from $350-370 million. The gross margin forecast remains about 70%.
So, in light of the weak April and lowered guidance, shares trade sharply lower today. Some on the street are calling this miss a fluke owing to the relative strength in the flooring market (and construction market in general) at this point.