New store activity pushed Tile Shop Holdings net sales growth up into double digits in the first quarter, even though comp-store sales declined.
Minneapolis-based Tile Shop Holdings, a specialty retailer of manufactured and natural stone tiles, setting and maintenance materials, saw net sales grow 13.3% to $64.4 million for the period ended March 31. Comparable-store sales declined 2.3%.
Sales results were impacted by harsh winter weather conditions in important Midwest, Mid-Atlantic and East Coast markets, where the majority of its stores are located.
The company said comparable-store sales improved sequentially throughout the quarter as weather challenges subsided, including positive comparable-store sales growth in March. Additionally, stores located in more southern geographies delivered high single-digit comparable-store sales growth for the quarter.
“We were very encouraged by the meaningful improvement in sales that our stores delivered as the quarter progressed and we worked to overcome customer traffic and sales levels that were below our expectations given the extremely harsh winter weather conditions in our critical markets,” said Robert Rucker, CEO. “We continue to focus on the execution of our growth strategy and the implementation of operational improvements to the business. In that regard, we are pleased with the pace of new store openings, the sequential improvement in gross profit margins in the quarter and the meaningful reduction in inventory levels. As we move forward and the large number of stores that were opened over the past two years mature, we firmly expect a return to our prior levels of profitability.”
The company opened five new stores in the first quarter, four in new markets (Austin and Southlake, Texas; Albuquerque, New Mexico; and Scottsdale, Arizona) and one store in an existing market (Lincoln Park, Illinois). With the opening of the Fort Wayne, Indiana, and Tempe, Arizona, stores in April, the company now has 95 locations in 30 states.