The Tile Shop Holdings, Inc. announced its financial results for the second quarter ended June 30, 2025, on August 7, 2025. Net sales for the quarter decreased by 3.4% compared to the second quarter of 2024, with comparable store sales declining by 3.5%.
The gross margin rate decreased by 160 basis points to 64.4% in the second quarter of 2025, compared to 66.0% in the prior year. This decrease was attributed to higher levels of discounting combined with increases in product costs.
The company reported net income of $0.4 million and Adjusted EBITDA of $4.9 million for the quarter. Selling, general, and administrative (SG&A) expenses decreased by 3.6% to $56.4 million, driven by a $0.8 million decrease in asset impairment, a $0.7 million reduction from the New Jersey distribution center closure in Q3 2024, a $0.7 million decrease in marketing costs, and a $0.4 million decrease in depreciation.
In response to industry challenges, The Tile Shop closed its distribution center in Spring Valley, Wisconsin, during the second quarter of 2025. This closure is anticipated to provide an annualized benefit of approximately $1.0 million in SG&A reductions. The company also closed one store during the second quarter and a second store during the third quarter at the end of their lease terms.
As of June 30, 2025, The Tile Shop had no outstanding borrowings on its $75.0 million line of credit and reported $27.8 million in cash and cash equivalents. Management noted a modest improvement in unit volumes due to expanded entry-level products, which was offset by increased demand for lower average selling price products and higher discounting.
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