Executive Summary

Q1 2025 revenue was $19.0M (-1.2% YoY), gross margin 56.3%, and operating income $0.3M, with diluted GAAP EPS at $1.47 primarily reflecting the one-time corporate headquarters sale; adjusted EPS from operations was $0.05 .
Cash rose to $23.6M post-HQ sale and a special dividend of $1.50/share; inventory decreased to $34.4M from $35.6M at year-end .
Management reiterated that the HQ move expected in Q3 2025 will drive “significantly increased costs” and “likely operating losses” for full-year 2025; tariffs on imported products could necessitate price increases and pressure sales/profits .
Sell-side coverage appears limited; S&P Global consensus for EPS and revenue was unavailable for Q1 2025, so beat/miss vs estimates cannot be determined.*

What Went Well and What Went Wrong

“We were pleased to still achieve first quarter sales and operating income that were somewhat ahead of our internal forecasts” (CEO Johan Hedberg) .
Liquidity strengthened: cash and equivalents rose to $23.6M, aided by HQ sale; inventory declined to $34.4M, improving working capital positioning .
Gross margin remained resilient at 56.3% despite promotional activity and input cost pressures .

Operating expenses increased 1.8% YoY to $10.5M, reflecting inflationary pressures and move-related efforts .
Net income from operations declined to $0.3M (from $0.7M YoY), signaling weaker underlying profitability .
Management expects FY2025 operating losses linked to HQ relocation and lease transition; tariff risk could force price increases and depress demand .

Metric	Q3 2024	Q4 2024	Q1 2025
Revenues ($USD Millions)	$17.4	$20.5	$19.0
Gross Profit ($USD Millions)	$10.0	$10.8	$10.7
Gross Margin %	57.8%	—	56.3%
Operating Income (Loss) ($USD Millions)	($0.3)	—	$0.3
Net Income from Operations ($USD Millions)	—	—	$0.3
Diluted EPS (GAAP)	($0.02)	$0.04	$1.47
Adjusted EPS from Operations	—	—	$0.05
Operating Expenses ($USD Millions)	$10.3	—	$10.5
Adjusted EBITDA ($USD Millions)	$0.2	—	$0.6
Cash & Equivalents ($USD Millions)	$10.1	$13.3	$23.6
Inventory ($USD Millions)	$38.1	$35.6	$34.4

Notes: Q4 2024 margin and operating income were not disclosed in the press release .

KPIs

Store count: 99 North American stores at Q3; 100 North American stores at Q1 (plus Spain) .
Special dividend: $1.50 per share paid in Q1 following HQ sale .

Metric	Period	Previous Guidance	Current Guidance	Change
Profitability	FY 2025	“Will negatively impact our ability to be profitable in 2025” (HQ move, lease transition)	“Significantly increased costs and likely operating losses for full year 2025”	Lowered
Costs (HQ move)	FY 2025	Significant costs expected from HQ/flagship move; shifting from owning to leasing	Costs remain significant with move expected in Q3 2025; operating losses likely	Maintained/clarified timing
Pricing	FY 2025	—	Tariffs on imported products may force retail price increases	New risk disclosed
Sales	FY 2025	Expect some unavoidable disruption to sales during transition	Tariff-driven price increases likely to reduce sales/profits	Lowered risk profile
Dividends	N/A	No recurring dividend guidance; value return via asset sale contemplated	Special dividend of $1.50/share paid in Q1 2025 (post-HQ sale)	One-time action

No Q1 2025 earnings call transcript was available; themes below reflect press release narratives.

Topic	Previous Mentions (Q-2 = Q3 2024; Q-1 = Q4 2024)	Current Period (Q1 2025)	Trend
Macro/Consumer demand	Q3: Traffic down; promotions up; cash strong despite higher capex	Sales and operating income slightly ahead of internal forecasts	Stabilizing near-term, but cautious
Gross margin	Q3: 57.8%, impacted by promotions and accounting differences YoY	56.3%, modest decline YoY	Slight compression
Operating expenses	Q3: Up 2.3% YoY from inflation (employment costs)	Up 1.8% YoY; move-related efforts underway	Elevated, persistent inflation
HQ relocation and lease shift	Q4: Transition expected to hurt profitability in 2025	Move expected Q3 2025; “likely operating losses”	Worsening near term
Tariffs	—	“Products are nearly all imported”; tariffs may force price hikes, reduce sales/profits	Emerging headwind
Capital returns/liquidity	Q4: HQ sale closed in Jan; cash up; special dividend declared	Cash $23.6M; special dividend ($1.50/share) paid	Liquidity improved; one-time return

“In the first quarter, we completed the sale of our corporate headquarters building, which allowed us to pay our stockholders a substantial dividend of $1.50 per share.” — Johan Hedberg, CEO .
“Our move to a new headquarters in Q3 of this year is still expected to lead to significantly increased costs and likely operating losses for full year 2025.” — Johan Hedberg, CEO .
“We have not yet felt the full impact of the coming tariffs on the U.S. economy and our products, which are nearly all imported… this will necessarily require us to increase our retail prices and likely lead to unavoidable declines in our sales and profits.” — Johan Hedberg, CEO .

No formal earnings call or transcript located for Q1 2025; the company invites investor questions via [email protected] .
No additional Q&A clarifications were available in primary documents .

Metric	Q1 2025 Actual	Q1 2025 Consensus	Beat/Miss
Revenue ($USD Millions)	$19.0	N/A*	N/A
Diluted EPS ($USD)	$1.47	N/A*	N/A
Adjusted EPS from Operations ($USD)	$0.05	N/A*	N/A

Notes: Sell-side consensus was unavailable for TLF for Q1 2025; cannot determine beat/miss vs estimates.*
*Values retrieved from S&P Global.

Near-term profitability risk: management explicitly anticipates FY2025 operating losses due to HQ relocation and leasing shift; expect elevated OpEx and transitional disruption .
Tariff sensitivity: with “nearly all” products imported, tariff-driven pricing actions could pressure demand and margins; monitor tariff developments and company pricing strategy .
Underlying operations modest: Adjusted EBITDA of $0.6M and adjusted EPS of $0.05 point to modest core profitability in Q1 despite strong GAAP EPS from one-time gain .
Liquidity cushion: cash increased to $23.6M even after a $1.50/share special dividend, providing flexibility to navigate relocation and tariff headwinds .
Inventory progress: inventory fell to $34.4M from $35.6M at year-end, indicating tighter working capital discipline .
Limited analyst coverage: lack of consensus estimates complicates expectations management; traders should focus on operational KPIs (sales cadence, margin trajectory, OpEx run-rate) and tariff updates.*
Watch catalysts: clarity on tariff implementation, HQ move milestones/costs, and any pace change in store relocations or promotions will likely drive stock narrative near-term .