FORT WORTH, Texas (AP) _ Tandy Leather Factory Inc. (TLF) on Thursday reported second-quarter net income of $1.4 million.
On a per-share basis, the Fort Worth-based company said it had net income of 15 cents.
The leather goods retailer posted revenue of $19.2 million in the period.
Tandy expects full-year earnings to be 63 cents to 68 cents per share, with revenue in the range of $82 million to $84 million.
Tandy shares have climbed nearly 1 percent since the beginning of the year. The stock has decreased 11 percent in the last 12 months.
Q2’18 net sales decreased 0.5% to $19.2 million, compared to prior year’s $19.3 million. New stores added $0.3 million of sales.
Q2’18 gross profit margin improved to 68.4% compared to prior year’s 66.9%.
Q2’18 operating income was approximately $1,981,000, a 19.7% improvement over prior year.
YTD’18 net sales increased 0.1% to $39.5 million, compared to prior year’s $39.4 million. North America reported SSS decline of 1.5% and International reported SSS improvement of 5.7%. New stores added $0.6 million of sales.
YTD’18 gross profit margin improved to 65.8% compared to prior year’s 63.9%.
YTD’18 operating income was approximately $3,750,000, a 10.5% improvement over prior year.
“Our second quarter results were encouraging and reflect that we are headed in the right direction,” said Shannon Greene, CEO. “While sales were tough this quarter, our success was on improving gross profit and operating margins which we did with customer and product mix and in controlling costs. As we look to the second half of 2018, we are excited about our product selections and line-up which we expect to drive some moderate top line expansion.”
Consolidated net income for the quarter ended June 30, 2018 was $1.4 million compared to $1 million for the second quarter of 2017, an increase of 40%. Fully diluted earnings per share (“EPS”) for the second quarter of 2018 were $0.15, compared to $0.11 in last year’s second quarter. Consolidated net income for the first half of 2018 increased to $2.7 million or EPS of $0.29 versus $2.3 million or $0.24 in the comparable period last year.
Sales from the North America segment, consisting of 115 stores in the US and Canada, decreased $150,000 in the second quarter, down 0.8% from last year’s second quarter sales. For the six months ended June 30, 2018, North America’s sales decreased $65,000 or 0.2% from prior year. The sales decline for our North America segment was primarily attributable to declines in sales to our non-retail customers who purchased lower quantities of leather, partially offset by fluctuations in the Canadian dollar exchange rate. Our International segment, consisting of four stores outside of North America, added sales of $901,000 for the quarter compared to last year’s second quarter sales of $853,000, an increase of 5.6%. For the six months ended June 30, 2018, International sales, totaling $1.9 million, were up 5.7%, or $101,000, over the same period last year. The improvement in our International segment sales was due to favorable foreign currency exchange rates and recent price increases.
Consolidated gross profit margin for the current quarter was 68.4%, compared to 66.9% for the second quarter of 2017. For the first half of 2018, consolidated gross profit margin was 65.8%, improving from last year’s gross profit margin of 63.9%. The improvement in gross profit margin was due to the shift in customer mix, with more retail than non-retail sales, as well as product mix, with more higher-margin items sold, as well as international price increases and the strengthening US dollar.
Consolidated operating expenses decreased approximately 0.9% or $103,000 for the current quarter compared to prior year, as we reduced advertising and marketing spend, partially offset by higher personnel and occupancy costs. Consolidated operating expenses for the six months ended June 30, 2018 increased 1.9% or $422,000 compared to the same period in 2017, primarily related to the three stores that have opened since the beginning of 2017, as well as increases in store associate wages and higher common area maintenance costs._____
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