Tile Shop Holdings Inc (TTSH) 2024 Q2 法說會逐字稿

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.

謝謝你的支持。我叫馬克斯，今天我將擔任你們的會議操作員。此時此刻，我歡迎大家參加 Tile Shop Holdings, Inc. 2024 年第二季財報電話會議。（操作員說明）謝謝。

Well, I would like to turn the call over to Ken Cooper, Investor Relations. Please go ahead.

好吧，我想把電話轉給投資者關係部的 Ken Cooper。請繼續。

Thank you, and good morning to everyone. Welcome to the Tile Shop's second-quarter earnings call. Joining me today are Cab Lolmaugh, our Chief Executive Officer; and Mark Davis, our Chief Financial Officer. Certain statements made during the call today constitute forward-looking statements made pursuant to and within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 as amended. Such forward-looking statements are subject to both known and unknown risks, and uncertainties that could cause actual results to differ materially from such statements.

謝謝大家，祝大家早安。歡迎參加 Tile Shop 第二季財報電話會議。今天加入我的是我們的執行長 Cab Lolmaugh；和我們的財務長馬克戴維斯。今天電話會議期間所做的某些聲明構成前瞻性聲明，這些聲明是根據經修訂的 1995 年《私人證券訴訟改革法案》的安全港條款並在其含義範圍內做出的。此類前瞻性陳述受到已知和未知風險以及不確定性的影響，可能導致實際結果與此類陳述有重大差異。

Those risks and uncertainties are described in our earnings press release issued earlier and in our filings with the SEC. The forward-looking statements made today are as of the date of this call, and we do not undertake any obligation to update these forward-looking statements. Today's call will also include certain non-GAAP measurements. Please see our earnings release for a reconciliation of those non-GAAP financial measures, which has been also posted on our company website.

這些風險和不確定性已在我們先前發布的收益新聞稿和向美國證券交易委員會提交的文件中進行了描述。今天所做的前瞻性陳述截至本次電話會議之日，我們不承擔更新這些前瞻性陳述的任何義務。今天的電話會議還將包括某些非公認會計準則衡量標準。請參閱我們的收益報告，以了解這些非公認會計準則財務指標的對賬，該報告也已發佈在我們公司的網站上。

With that, let me turn the call over to Cab.

接下來，讓我把電話轉給計程車。

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

謝謝你，肯。大家早安，感謝您今天加入我們，了解我們的業務最新情況。我對我們團隊在第二季的執行力感到自豪，這導致了可比商店銷售額的連續改善。儘管現有房屋銷售趨勢持續疲軟，這給家居裝修行業的許多人帶來了挑戰，並導致我們商店的客流量下降，但我們還是這樣做了。

While external headwinds persist, I'm encouraged by the progress we have made on several key initiatives. First, we rolled out our enhanced line of private label installation products sold under the superior brand name during the second quarter. This line includes products such as thinsets and levelers that are used by both pro and retail customers and virtually every type of tile project. Over the past 12 months, we have made significant strides advancing the performance of the superior line.

儘管外部阻力依然存在，但我對我們在幾項關鍵措施上的進展感到鼓舞。首先，我們在第二季推出了增強自有品牌安裝產品系列，以優質品牌進行銷售。該系列包括專業客戶和零售客戶以及幾乎所有類型的瓷磚項目都使用的薄板和矯平機等產品。在過去的 12 個月裡，我們在提升優質產品線的效能方面取得了重大進展。

After completing these steps to improve the product quality, we invested time training our sales teams and holding events for our pros to give everyone the opportunity to work with our new formulas. It's important to note that our superior initiative is also part of our strategy to deepen our relationships with our professional customers. As I noted earlier, pros use installation products in virtually every tile project they complete. We're looking to get a bigger piece of this business. We believe steps we have taken to improve product quality, combined with our ability to offer this line at a competitive price point has us in a position to expand our penetration into this important customer segment, as it relates to tile installation products.

完成這些提高產品品質的步驟後，我們投入時間培訓我們的銷售團隊並為我們的專業人士舉辦活動，讓每個人都有機會使用我們的新配方。值得注意的是，我們的卓越措施也是我們深化與專業客戶關係策略的一部分。正如我之前提到的，專業人士幾乎在他們完成的每個瓷磚專案中都使用安裝產品。我們希望在這項業務中獲得更大的份額。我們相信，我們為提高產品品質所採取的措施，加上我們以具有競爭力的價格提供該系列產品的能力，使我們能夠擴大對這一與瓷磚安裝產品相關的重要客戶群的滲透。

Over time, we believe this will create additional cross-selling opportunities from our tile assortment and further strengthen our relationships with our pro customers. We've also made significant headway building our assortment of entry-level competitively priced products. We believe the expansion of entry-level priced products will attract more middle-market customers seeking to complete smaller projects on a budget. Additionally, we believe our expanded assortment strengthens our competitive position with pros, seeking to complete cost-effective projects for their end customers. So far, sales of entry-level products are tracking in line with our goals, and we anticipate building on our success in the second half of the year.

隨著時間的推移，我們相信這將為我們的瓷磚品種創造更多的交叉銷售機會，並進一步加強我們與專業客戶的關係。我們還在建立具有價格競爭力的入門級產品系列方面取得了重大進展。我們相信，入門級產品的擴展將吸引更多尋求在預算內完成較小專案的中階市場客戶。此外，我們相信，我們擴大的產品種類可以增強我們與專業人士的競爭地位，尋求為最終客戶完成具有成本效益的專案。到目前為止，入門級產品的銷售正符合我們的目標，我們預計下半年將會成功。

Turning our attention to our website, the investments made to date in our e-commerce capabilities have helped us grow online orders by over 25% during the second quarter of 2024 when compared to the same period in 2023. We've continued to see an increase in both traffic and conversion rates on our sites and believe we have a long runway for continued growth.

將注意力轉向我們的網站，迄今為止對電子商務能力的投資幫助我們在 2024 年第二季度的線上訂單量與 2023 年同期相比增長了 25% 以上。我們的網站流量和轉換率持續成長，並相信我們的持續成長還有很長的路要走。

With that, I'll now hand the call over to Mark.

現在，我將把電話轉給馬克。

Thanks, Cab. Good morning, everyone. Second-quarter sales in comparable stores decreased by 6.9% compared to the second quarter of 2023 due to lower levels of store traffic. That said, comparable store sales when compared to last quarter saw a 330 basis point improvement. While we had an easier compare and benefited from the timing shift of Easter, this result would not have been possible without the strong execution of our sales teams, given the headwinds facing in our industry.

謝謝，計程車。大家早安。由於商店客流量較低，與 2023 年第二季相比，第二季可比商店銷售額下降了 6.9%。也就是說，與上季相比，可比商店銷售額成長了 330 個基點。雖然我們可以更輕鬆地進行比較，並受益於復活節的時間轉變，但鑑於我們行業面臨的逆風，如果沒有我們銷售團隊的強大執行力，這一結果是不可能實現的。

Our gross margin rate during the second quarter increased to 66%, which represents a 20 basis point improvement from the first quarter, and a 180 basis point increase when compared to the second quarter of 2023. As we've outlined in recent quarters, international freight rates have fallen, and we have been able to successfully secure products offered in our assortment at lower price points, which helped reduce our inventory costs.

第二季毛利率增加至66%，較第一季提高20個基點，較2023年第二季增加180個基點。正如我們在最近幾個季度所概述的那樣，國際運費有所下降，我們能夠成功地以較低的價格獲得我們品種中的產品，這有助於降低我們的庫存成本。

Second-quarter SG&A expenses of $58.5 million were $2.9 million higher than our second quarter SG&A expenses in 2023. The increase in SG&A expense was partially due to a $1.3 million increase in bonus expense that was primarily attributable to a release of certain bonus and long-term incentive accruals during the second quarter of 2023 that was not repeated in the second quarter of 2024.

第二季的 SG&A 費用為 5,850 萬美元，比 2023 年第二季的 SG&A 費用高出 290 萬美元。SG&A 費用增加的部分原因是獎金費用增加了 130 萬美元，這主要是由於 2023 年第二季度發放了某些獎金和長期應計獎勵，但 2024 年第二季度沒有重複發放。

Additionally, occupancy costs increased by $700,000 due to an increase in rent expense associated with leases that were extended over the last year. IT-related expenses increased by $700,000 due to an increase in software and licensing costs, and marketing expenses increased by $400,000 due to increase in digital advertising expenses. These increases were partially offset by a $900,000 decrease in depreciation expense and a $700,000 decrease in variable compensation expenses. During the quarter, we recorded $900,000 of asset impairment charges related to the write-down of certain store assets.

此外，由於與去年延長租約相關的租金費用增加，佔用成本增加了 70 萬美元。由於軟體和授權成本增加，IT 相關費用增加了 70 萬美元，由於數位廣告費用增加，行銷費用增加了 40 萬美元。這些增長被折舊費用減少 900,000 美元和可變補償費用減少 700,000 美元部分抵消。本季度，我們記錄了與某些商店資產減記相關的 900,000 美元資產減損費用。

Turning our attention to the balance sheet and cash flow information. We ended the quarter with $25.3 million of cash and no bank debt. We generated $23.5 million of operating cash flow as of June 30, 2024, we believe we're well positioned to navigate the challenges of the current environment with a great team, strong balance sheet and the enhancements we're making to serve our customers.

將我們的注意力轉向資產負債表和現金流量資訊。本季結束時，我們擁有 2,530 萬美元現金，沒有銀行債務。截至2024 年6 月30 日，我們產生了2,350 萬美元的營運現金流，我們相信，憑藉優秀的團隊、強大的資產負債表以及我們為客戶服務所做的改進，我們有能力應對當前環境的挑戰。

With that, Cab and I are happy to take any questions.

因此，Cab 和我很樂意回答任何問題。

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

（操作員說明）沒有問題。現在我將把會議轉交肯·庫柏致閉幕詞。

Thank you for listening to our earnings conference call. We anticipate filing our Form 10-Q later today. Thank you for your interest in Tile Shop, and have a great day.

感謝您收聽我們的財報電話會議。我們預計今天稍後提交 10-Q 表格。感謝您對磁磚店的興趣，祝您有個愉快的一天。

This concludes today's conference call. You may now disconnect.

今天的電話會議到此結束。您現在可以斷開連線。