Tile Shop reports preliminary Q3 revenue roughly $84M, consensus $87.17M
Comparable store sales growth for the third quarter is expected to approximate 1%. Comparable store sales growth for the third quarter of 2016 was 5.7%. Gross margin for the third quarter of 2017 is expected to be approximately 66 to 67% compared with 70.2% for the third quarter of 2016. Selling, general and administrative costs for the third quarter of 2017 are expected to be approximately $52M compared with $47.4M for the third quarter of 2016. "A more competitive environment led to weaker than expected results in our third quarter," said CEO Chris Homeister. "Additionally, we are seeing increased demand for opening price point offerings, and are in the process of introducing new products to our assortment as a result. In response to these challenges, we increased our promotions, competitive pricing and advertising in the quarter. When we increased these items, we achieved better results in both sales and gross profit dollars. However, this activity in combination with product mix changes will result in a meaningfully lower gross margin percentage in the third quarter. We are focused on completing our annual product transition, adding more opening price point products to the assortment and making refinements to our approach on promotions."