A. Lee Graham
Tandy Leather Factory Inc. has lowered its 2014 earnings guidance while maintaining its 2014 revenue guidance, the Fort Worth company announced on Monday.
Prompting the revision was a higher ratio of leather sales to non-leather sales, according to the company.
“Our 2014 sales are on track with our internal targets,” said president and CEO Jon Thompson in a news release.
“However, as a result of sales of leather in October being stronger than we originally expected and our November sales suggesting the same, we expect gross profit margins to decrease by several basis points in the fourth quarter, compared to last year’s fourth quarter,” Thompson said.
Because leather is the lowest margin item it sells, Thompson said the more leather the company sells, the lower the gross profit margin it achieves.
“With that said, the higher-than-expected leather sales and resulting lower gross profit margin is not due to significant discounting. It’s strictly a function of the product mix,” Thompson said.
The company said it expects estimated consolidated net sales for 2014 to be in the range of $82 million-$83 million. Earnings per share for 2014 are expected to be in the range of $0.75-$0.78, down from $0.80-$0.83. Average shares outstanding, both basic and diluted, for the year are estimated to reach about 10.2 million.
Tandy Leather Factory Inc. sells and distributes leather, leatherworking tools, do-it-yourself-kits and many other products. Its products are distributed through its 28 Leather Factory stores, located in 18 states and three Canadian provinces; 80 Tandy Leather retail stores, located in 37 states and six Canadian provinces; and three combination wholesale-retail stores in the United Kingdom, Australia and Spain.
More information is available at www.tandyleatherfactory.com.