Tile Shop Hldgs, Inc. (NASDAQ:TTS) is one of the few companies that faces the strength of the dollar not as a headwind, but rather as a tailwind, since almost 90% of its raw materials come from outside the U.S. That, coupled with a rise in the sales of tiles across the country thanks to a strong economy, has led several analysts to be bullish on the stock. On September 2, Piper Jaffray reiterated its ‘Overweight’ rating on the stock with a $18 price target, which represents an upside potential of over 40% from the current price. In July, Wedbush Securities reiterated its ‘Buy’ rating on the stock with a $17 price target just a day prior to the announcement of Tile Shop Hldgs, Inc. (NASDAQ:TTS)’s second quarter earnings.
For the second quarter, the company reported EPS of $0.09, which came in-line with analysts’ expectations. However, the revenue of $75.70 million was better than $73.54 million estimated and was 13.6% above the revenue reported for the same quarter last year. Though revenue increased, the gross margin for the quarter inched down to 67.8% from 69.8%. Tile Shop Hldgs, Inc. (NASDAQ:TTS) attributed this decline to the pricing tests it conducted in certain markets during the quarter, inventory transition activity and a higher mix of customer delivery sales. For the third quarter of fiscal year 2015, analysts expect the company to report EPS of $0.06.