Tandy Leather Factory, has released its financial results for the fourth quarter and full year of 2024. The company faced a slight decline in sales and a significant drop in profitability due to rising operational costs and weaker retail performance.
Key Financial Highlights:
- Total revenue for 2024 was $74.4 million, down 2.4% from 2023.
- Operating income stood at $0.6 million.
- Net income dropped sharply to $0.8 million from $3.8 million in 2023.
- Gross margins fell to 56.2%, compared to 59.2% in the previous year.
- Operating expenses rose slightly to $41.2 million, an increase of 1.0%.
- Adjusted EBITDA came in at $2.6 million.
- Year-end cash and cash equivalents increased to $13.3 million from $12.2 million in 2023.
The fourth quarter sales of $20.5 million showed a minor decline from $20.8 million in 2023. Gross profit for the quarter also fell to $10.8 million, down from $11.5 million. Inventory levels at the end of 2024 were $35.6 million, a decrease from $38.0 million a year earlier.
The company’s declining net income reflects the rising costs of labor and materials, coupled with weaker retail sales in the U.S. market.
“In 2024, against a backdrop of weaker retail sales in the U.S., Tandy was able to slow, but not fully stop, the trend of decreasing retail sales.”
Johan Hedberg, CEO
To combat these issues, Tandy Leather Factory focused on cost control and strategic asset management, including the recent sale of its corporate headquarters building.
The proceeds from this sale allowed the company to distribute a substantial dividend of $1.50 per share to stockholders.
Looking ahead, Tandy Leather Factory plans to focus on boosting sales in its physical stores and e-commerce channels.
However, the company anticipates short-term challenges in 2025 due to costs associated with moving its headquarters and flagship store in Fort Worth.
Hedberg noted that the shift from owning to leasing properties will likely impact profitability and cause some disruptions in sales.
Despite these temporary hurdles, the company aims to position itself for a strong recovery in 2026, with a more efficient operational structure and improved sales performance.
