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TL

TANDY LEATHER FACTORY INC (TLF)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 was operationally soft: revenue was $17.3M (-0.5% YoY), gross margin rose to 58.9%, but operating loss widened to $0.7M and net loss increased to $1.4M as relocation and higher occupancy costs weighed on results .
  • Retail-store sales exceeded prior year, but online shipments were constrained by a limited web assortment during the headquarters/distribution center move; management said operations have restarted at the new location and signaled a “solid fourth quarter” setup .
  • Full-year 2025 outlook for operating losses was reiterated earlier in the year as leasing costs and move-related expenses elevate OpEx; the tone in Q3 was more constructive about Q4 once disruptions abate .
  • Wall Street consensus coverage appears limited; S&P Global showed no Q3 2025 EPS or revenue consensus available for TLF, so beat/miss cannot be determined with confidence (values retrieved from S&P Global).

What Went Well and What Went Wrong

What Went Well

  • Gross margin expanded YoY to 58.9% (from 57.8% in Q3 2024), lifting gross profit to $10.2M from $10.0M despite flat sales .
  • Retail performance: “Third quarter sales from our retail stores were actually ahead of last year,” highlighting resiliency in brick-and-mortar productivity .
  • Execution milestone: “The move of our headquarters and distribution center during the third quarter was a success… With our operations now running again from our new location, we believe we are well positioned for a solid fourth quarter in both our retail and online channels” .

What Went Wrong

  • Operating loss widened to $0.7M (vs. $0.3M YoY) and net loss rose to $1.4M (vs. $0.1M YoY) as OpEx grew 5.4% and move-related disruptions hit online fulfillment .
  • Sequential softness: revenue fell to $17.3M from $17.8M in Q2, with Adjusted EBITDA turning to a loss of ($0.4)M from $0.3M in Q2 .
  • Cost structure headwind: earlier commentary flagged higher occupancy/leasing costs and move-related expenses, contributing to expected full-year operating losses .

Financial Results

Quarterly progression (Q1 → Q2 → Q3 2025)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$19.0 $17.8 $17.3
Gross Profit ($USD Millions)$10.7 $10.6 $10.2
Gross Margin %56.3% 59.5% 58.9%
Operating Income (Loss) ($USD Millions)$0.3 $0.1 ($0.7)
GAAP Net Income (Loss) ($USD Millions)$12.7 (includes HQ sale gain) ($0.2) ($1.4)
Diluted EPS ($USD)$1.47 ($0.02) ($0.17)
Operating Expenses ($USD Millions)$10.5 $10.5 $10.8
Adjusted Net Income ($USD Millions)$0.4 $0.2 ($0.6)
Adjusted EBITDA ($USD Millions)$0.6 $0.3 ($0.4)
Cash And Equivalents ($USD Millions)$23.6 $16.4 $12.0
Inventory ($USD Millions)$34.4 $36.2 $35.9

Notes:

  • Adjusted net income represents income from operations plus interest income .
  • Q1 GAAP net and EPS reflect the gain from the January HQ sale and a special dividend; management also disclosed adjusted operating figures .

Q3 2025 vs Q3 2024 (YoY)

MetricQ3 2024Q3 2025
Revenue ($USD Millions)$17.4 $17.3
Gross Profit ($USD Millions)$10.0 $10.2
Gross Margin %57.8% 58.9%
Operating Income (Loss) ($USD Millions)($0.3) ($0.7)
Net Income (Loss) ($USD Millions)($0.1) ($1.4)
Diluted EPS ($USD)($0.02) ($0.17)
Operating Expenses ($USD Millions)n/a$10.8 (up 5.4% YoY)

KPIs

KPIQ1 2025Q2 2025Q3 2025
Store Count (total locations)101 (100 North America + 1 Spain) 101 (US + Canada + Spain) 101 (US + Canada + Spain)
Retail vs Online Commentaryn/a“U.S. retail stores” drove gains Retail sales ahead YoY; online limited during move

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Operating ProfitabilityFY 2025“Likely operating losses for full year 2025” due to move and leasing costs “Expect those costs to lead to operating losses for full year 2025” reiterated in Q2 Maintained
Q4 Operating OutlookQ4 2025“Hope to continue sales momentum through the third quarter” “Well positioned for a solid fourth quarter in both retail and online channels” More constructive tone
Tariff ImpactFY 2025If tariffs remain at announced levels, price increases likely and sales/profits could decline Newly-announced tariffs may impact sales and profits going forward Risk maintained
OpEx/Occupancy CostsFY 2025Shift to leasing HQ/DC raises OpEx; move-related costs expected OpEx up 5.4% YoY; relocation disrupted online shipments Maintained higher run-rate

Earnings Call Themes & Trends

No Q3 2025 earnings call transcript was located; the company directed questions to its investor relations email channel .

TopicQ1 2025Q2 2025Q3 2025Trend
HQ Relocation & DC MovePlanned move in Q3; sale completed; dividend paid Move in progress; costs elevating Move completed; operations restarted at new location Transition completed; normalization expected
Retail Store Productivityn/aGains driven by U.S. retail stores Retail stores ahead YoY Improving retail
Online Fulfillment/Web Assortmentn/an/aLimited assortment during move constrained online shipments Temporary disruption, easing post-move
Tariffs/MacroPrice increases likely if tariffs persist; potential sales/profit declines Tariffs may impact sales/profits going forward No incremental update in Q3 press Ongoing risk
OpEx/Occupancy Costsn/aLeasing and move costs increased OpEx OpEx +5.4% YoY; contributed to losses Elevated cost base

Management Commentary

  • “The move of our headquarters and distribution center during the third quarter was a success… we believe we are well positioned for a solid fourth quarter in both our retail and online channels” — Johan Hedberg, CEO .
  • “We were pleased to have grown our sales and margin dollars in the second quarter… Our operating expenses increased as expected, driven largely by the shift to leasing our headquarters and distribution center spaces… we still expect those costs to lead to operating losses for full year 2025” .
  • “Our move to a new headquarters in Q3… is still expected to lead to significantly increased costs and likely operating losses for full year 2025… If tariffs remain at the currently-announced levels, this will… likely lead to unavoidable declines in our sales and profits” .

Q&A Highlights

  • No formal Q3 call transcript was available; the company invited investor questions via [email protected] .
  • Key areas investors are likely to probe based on disclosures: operational normalization timeline post-move and re-acceleration of online assortment ; magnitude and duration of elevated occupancy/lease costs and associated OpEx run-rate ; tariff pass-through strategy and elasticity of demand under potential price increases .
  • Management tone: constructive toward Q4 as operations restart at the new facility, while maintaining caution on full-year losses due to structural cost changes .

Estimates Context

  • S&P Global consensus for Q3 2025 appears unavailable for EPS and revenue; we cannot determine a beat/miss versus Wall Street expectations with confidence (values retrieved from S&P Global).
  • Actuals reported: Revenue $17.3M and diluted EPS ($0.17); use these as anchors for any future estimate revisions if coverage increases .
MetricQ3 2025 ActualQ3 2025 Consensus
Revenue ($USD Millions)$17.3 n/a (S&P Global coverage unavailable)
Diluted EPS ($USD)($0.17) n/a (S&P Global coverage unavailable)

Key Takeaways for Investors

  • Near-term setup: with the HQ/DC move complete and operations restarted, Q4 could show sequential improvement, particularly in online fulfillment; monitor holiday-quarter sell-through and assortment normalization .
  • Cost structure watch: leasing and relocation have elevated OpEx; quantify the new occupancy run-rate and look for cost offsets to defend margins in 2026 .
  • Margin resilience: gross margin expanded YoY to 58.9% despite flat sales; track whether this holds as online re-accelerates and price actions (if tariffs bite) flow through .
  • Demand elasticity risk: management flagged potential price increases if tariffs persist; watch for volume impacts in retail and online channels under higher ticket prices .
  • Liquidity/cash trajectory: cash declined sequentially (Q1 $23.6M → Q2 $16.4M → Q3 $12.0M) after special dividend and move costs; monitor working capital and inventory stability ($35.9M in Q3) .
  • Stock catalysts: evidence of online recovery and steadier store productivity, margin preservation amid cost headwinds, and clarity on tariff impacts could drive sentiment; absence of consensus coverage may heighten volatility around prints .