Tile Shop Holdings, Inc. (TTSH): Business Model Canvas [Dec-2025 Updated]

Key components of cost reduction include:

• A $1.0 million reduction in SG&A associated with the closure of the New Jersey and Wisconsin distribution centers (DCs) in Q3 2025.
• In Q2 2025, the company closed one distribution center and one retail store.
• The New Jersey DC closure in Q3 2024 contributed to a $0.7 million SG&A decrease in Q2 2025.
• The Q1 2025 closure of a New Jersey distribution center was noted to generate $2 million in income from subleasing space.
• The Board approved a plan to delist from Nasdaq, which is expected to result in annualized cost savings of approximately $2.4 million from ceasing SEC reporting.

Professional customer (Pro) program management

Managing the relationship and service delivery for professional contractors remains a stated focus area for the company, aiming to influence what they can control despite low housing turnover.

• The CEO noted in Q1 2025 that the focus remains on influencing what they can control, 'especially for our pro customers'.

Finance: draft 13-week cash view by Friday.

Tile Shop Holdings, Inc. (TTSH) - Canvas Business Model: Key Resources

You're looking at the core assets Tile Shop Holdings, Inc. (TTSH) relies on to run its business as of late 2025. These aren't just line items; they are the physical and financial foundations supporting their value proposition.

The physical footprint is substantial, giving them broad market access. As of early December 2025, the network stood at 140 retail stores operating across 31 states and the District of Columbia. This is down slightly from the 141 stores reported at the end of Q2 2025.

The inventory itself is a key resource, centered on high-quality, exclusive tile designs. This exclusivity is bolstered by collaborations with design partners. For instance, the company has exclusive collections with designers like Laura Park (launching summer 2025), and heritage brands like Laura Ashley and Morris & Co..

Another critical, though less tangible, resource is the knowledgeable sales and design staff. The company consistently highlights this expertise in its customer-facing materials, which supports the sale of complex, high-value tiling projects.

Financially, the company maintained a solid liquidity position heading into the end of 2025, which is vital for managing inventory and operations, especially while navigating market softness. Here's the quick math on their cash position at the end of the third quarter:

What this estimate hides is the impact of the planned delisting and stock split, which is a strategic move to save over $2.4 million annually in public company compliance costs.

The company also controls proprietary manufacturing capabilities for essential setting and maintenance materials. These are the necessary consumables that accompany the primary tile sales. The proprietary brands include the manufacture of:

• Thinset
• Grout
• Sealers

This vertical integration into setting materials helps secure a portion of the overall project spend. The company's focus on exclusive designs and in-house material production forms a defintely important part of its resource base.

Finance: draft 13-week cash view by Friday.

Tile Shop Holdings, Inc. (TTSH) - Canvas Business Model: Value Propositions

You're looking at the core reasons customers choose Tile Shop Holdings, Inc. over competitors right now, based on their late 2025 performance metrics. It's about the mix of product quality, price accessibility, and expert help you get when you walk into one of their locations.

Wide selection of exclusive, high-quality natural stone and tile

Tile Shop Holdings, Inc. offers a curated mix, though the sales mix in the third quarter of 2025 shows a clear leaning toward manufactured products. For the three months ended September 30, 2025, the revenue breakdown was:

The company also highlights specific product enhancements, such as expanding its exclusive collaboration with Designer Kelli Fontana, which added new patterned and porcelain tile designs as of December 2025.

Expert, personalized design assistance in-store

While direct revenue attribution for design services isn't public, the strategy involves expert consultation to guide customers through selections. The CEO noted that refinements to the assortment helped broaden appeal to a wider range of customers, suggesting the in-store experience is key to navigating product complexity.

Expanding assortment of entry-level, competitively priced products

This is a stated strategic focus that management believes is already having an effect. In the second quarter of 2025, the CEO stated that steps taken to expand the assortment of entry-level, competitively priced products contributed to a modest improvement in unit volumes compared to the prior year. However, this was offset by increased demand for products carrying lower average selling prices, which pressured the overall gross margin rate to 64.4% in Q2 2025. By the third quarter of 2025, the gross margin rate settled at 62.9%.

Immediate availability from in-stock inventory

The value proposition of immediate availability is supported by the scale of their physical footprint. As of September 30, 2025, Tile Shop Holdings, Inc. operated 140 stores across 31 states and the District of Columbia. This network supports the ability to fulfill orders directly from local stock, a critical factor in renovation projects.

A refined, inspiring showroom experience

The physical environment is central to the offering. The company operates these showrooms with an average size of approximately 20,000 square feet as of September 30, 2025. The overall net sales for the third quarter of 2025 were $83.1 million.

• The company ended Q2 2025 with $27.8 million in cash and no debt outstanding on its $75.0 million line of credit.
• Selling, General and Administrative expenses decreased by $2.1 million in Q2 2025 versus Q2 2024, partly due to reduced marketing costs.

Finance: draft 13-week cash view by Friday.

Tile Shop Holdings, Inc. (TTSH) - Canvas Business Model: Customer Relationships

Dedicated, high-touch, in-store design consultation

Tile Shop Holdings, Inc. maintains an extensive showroom environment as a core part of its customer relationship strategy. As of September 30, 2025, the company operated 140 stores across 31 states and the District of Columbia. This physical presence supports the offering of design consultation, which is a key component of their high-touch approach. The company also offers free design services through its Design Concierge, aiming to help bring clients' dream spaces to life.

Specialized programs and services for Pro customers

Tile Shop Holdings, Inc. focuses on building success into every Pro relationship through its Pro Rewards program. This program is free to join starting with the first purchase or referred order. Benefits are structured across tiers based on annual spend.

The Pro Referral Program rewards members with a 5% Referral Bonus in cash when someone uses their Tile Shop Customer ID number (CID) on a purchase, with no limit to earnings. Pros can also access specialized services like In-House Credit, an interest-free credit account.

Transactional relationship for setting and maintenance materials

The relationship for setting and maintenance materials is primarily transactional, though it is integrated with the overall service model. An increase in customer delivery expenses contributed to a decrease in gross profit in the third quarter of 2025. For Pro customers, the Diamond tier benefit includes free delivery on orders over $100. The company also provides installation tools from trusted brands, positioning itself as a one-stop shop for tile installation needs.

Digital engagement via social media (Instagram, Pinterest)

Tile Shop Holdings, Inc. encourages monitoring its website for updates and engages customers via social media platforms.

• Join The Tile Shop on Instagram, Pinterest and YouTube.
• The company uses social media and digital advertising to connect with applicants, as 63% of construction companies use these channels.

Customer service for delivery and product support

The company emphasizes providing exceptional customer service in its extensive showroom environment. Investment in staff training is evident, with Selling, General and Administrative expenses in the first quarter of 2025 including a $0.3 million increase in training costs. The company reported a customer satisfaction rate of 85% based on post-purchase surveys and feedback in 2024. The focus on customer experience is a core component of the company's mission. The company is also focused on reducing expenses, with plans to delist from Nasdaq to potentially save over $2.4 million annually in costs associated with being a public company.

Tile Shop Holdings, Inc. (TTSH) - Canvas Business Model: Channels

You're mapping out the distribution arteries for Tile Shop Holdings, Inc. as of late 2025. The core of their model still leans heavily on physical presence, but the digital side and professional segment are critical focus areas, especially given the recent cost pressures.

Physical retail showrooms remain the primary touchpoint. As of the third quarter of 2025, Tile Shop Holdings operated exactly 140 stores spread across 31 states and the District of Columbia. This physical footprint is where they offer their extensive showroom environment for customers to view natural stone, man-made, and luxury vinyl tiles. It's worth noting that the store count has seen slight contraction; one store closed in Q2 2025 and another in Q3 2025, as part of operational optimization efforts.

The e-commerce platform, tileshop.com, serves as the digital storefront. While the search results don't give a direct e-commerce revenue split, the overall financial performance gives context to the scale of their sales activity. For the third quarter ending September 30, 2025, Tile Shop Holdings reported net sales of $83.06 million. The trailing twelve months revenue ending September 30, 2025, totaled $338.79 million.

For getting product to the customer, third-party delivery services are clearly a factor, though not explicitly named. The Q3 2025 results showed a decrease in gross profit, which management attributed in part to an increase in customer delivery expenses. This cost pressure highlights the operational reality of moving heavy tile products to the end-user, whether for in-store pickup or direct delivery.

The focus on direct sales to Pro customers is a stated strategic priority. In Q1 2025, CEO Cabell Lolmaugh specifically mentioned emphasizing innovation and customer experience, particularly for professional customers. This segment is targeted for growth, even as overall comparable store sales declined by 1.4% in Q3 2025.

Here's a quick look at the hard numbers tied to these channels as of the latest reported period:

The company is clearly managing a dual-channel reality: maintaining a large physical footprint while navigating the cost implications of fulfillment. You can see the pressure points in the gross margin, which fell to 62.9% in Q3 2025 from 66.5% in Q3 2024, partly due to those delivery costs and discounting.

The strategic emphasis on the Pro segment suggests they are trying to drive higher-value, potentially more predictable volume through their existing physical locations and sales force. Still, the overall environment shows traffic challenges, with comparable store sales declining for the period.

The key takeaways for channel performance are:

• Store Count Stability: Maintained at 140 locations despite recent closures.
• Revenue Base: Total TTM revenue stands at $338.79 million as of September 30, 2025.
• Cost Headwind: Increased customer delivery expenses are directly impacting gross profitability.
• Pro Focus: Direct sales efforts are specifically aimed at the Professional customer segment.

Finance: draft 13-week cash view by Friday.

Tile Shop Holdings, Inc. (TTSH) - Canvas Business Model: Customer Segments

You're looking at the core groups Tile Shop Holdings, Inc. serves as of late 2025. Honestly, while direct revenue splits by customer type aren't always public, we can map their product focus directly to the segments they target.

The company operates 140 stores across 31 states and the District of Columbia as of September 30, 2025. Management commentary in Q1 2025 specifically highlighted driving innovation for their pro customers.

The mix of products sold gives us a strong hint about what the market is buying, which directly reflects the needs of these segments, from high-end design to basic remodel needs. For the three months ended September 30, 2025, the sales breakdown by product type was:

This product mix shows a clear leaning toward manufactured products, which often serve a broader base including remodelers and value-conscious buyers, while still maintaining a significant natural stone offering for luxury projects.

The focus on customers seeking both luxury and entry-level solutions is supported by operational commentary. For instance, unit volumes increased modestly in Q3 2025, driven by steps to expand the assortment of entry level, competitively priced products. This contrasts with the high-end appeal of their natural stone selection.

Key operational metrics relevant to serving these segments include:

• Net Sales for Q3 2025: $83.1 million.
• Trailing Twelve Months Revenue ending September 30, 2025: $338.79 million.
• Comparable Store Sales decline for Q3 2025: 1.4%.
• Gross Margin Rate for Q3 2025: 62.9%.

Interior designers and architects, along with commercial project buyers, are served through the curated showroom experience and the availability of premium and large-format materials, though specific sales figures tied to these B2B channels aren't itemized in the latest reports. The Pro segment is a key focus area for management innovation.

Tile Shop Holdings, Inc. (TTSH) - Canvas Business Model: Cost Structure

You're looking at the core expenses that drive Tile Shop Holdings, Inc.'s operations as of late 2025, right after their Q3 reporting and as they move toward going private. Understanding this cost base is key to seeing where they are redirecting focus.

The biggest chunk of cost, naturally, is what it takes to acquire the product itself. For the third quarter ended September 30, 2025, Tile Shop Holdings, Inc. reported Net Sales of $83.064 million. With a reported Gross Margin of 62.9% for that period, the implied Cost of Goods Sold (COGS) for tile and materials was approximately $30.816 million, calculated as Net Sales multiplied by (1 minus the Gross Margin percentage).

Next up is the overhead required to run the business day-to-day. Selling, General, and Administrative (SG&A) expenses for Q3 2025 were reported at $54.2 million. This represented a year-over-year reduction of 3.1% compared to Q3 2024's $56.0 million. This reduction is a direct result of targeted cost-cutting efforts you asked about.

Store operating costs-rent, utilities, and payroll-are embedded within the SG&A structure. As of September 30, 2025, Tile Shop Holdings, Inc. operated 140 stores across 31 states. The reduction in SG&A was partly driven by lower wages following corporate staffing reductions.

Supply chain costs are being actively managed through facility consolidation. The closure of the Spring Valley, Wisconsin distribution center is expected to generate an annualized SG&A saving of approximately $1.0 million. This, combined with savings from the earlier New Jersey distribution center closure, contributed to the overall SG&A decrease in Q3 2025.

The move to terminate public reporting is a significant structural cost change. Tile Shop Holdings, Inc. anticipates saving over $2.4 million annually by delisting from the Nasdaq and ending SEC reporting obligations. This planned savings is a key driver for the strategic shift.

Here's a quick look at the key Q3 2025 cost and margin structure points:

• Gross Margin Rate (Q3 2025): 62.9%
• SG&A Expense Rate (Q3 2025): 65.3% of Net Sales
• Annualized Savings from Delisting: Over $2.4 million
• Annualized Savings from DC Closure (WI): Approximately $1.0 million
• Store Count (as of 9/30/2025): 140

To put the Q3 2025 performance into context, here is a table summarizing the key financial metrics that define the cost structure:

The reduction in SG&A by $1.7 million year-over-year was driven by several factors, including the DC closures and lower variable compensation expenses. Finance: draft 13-week cash view by Friday.

Tile Shop Holdings, Inc. (TTSH) - Canvas Business Model: Revenue Streams

You're looking at how Tile Shop Holdings, Inc. (TTSH) brings in its money, which is almost entirely from selling physical goods and related services. Honestly, the breakdown shows a heavy reliance on the core product categories, even as they try to manage costs.

The Trailing Twelve Months (TTM) Revenue, as of late 2025, sits at $0.33 Billion USD. This figure reflects a challenging period, as the Q3 2025 Net Sales were $83.064 Million, a 1.7% decrease year-over-year from Q3 2024's $84.505 Million. This sales performance contributed to a Q3 Gross Margin of 62.9%, down from 66.5% the prior year.

Here's a look at the composition of those Q3 2025 sales, showing where the dollars actually came from:

The primary revenue drivers are clearly the tile products themselves. Man-made tiles are the single largest component, making up well over half of the revenue stream. The supporting materials are also a significant, though smaller, piece of the pie.

You can see the concentration of revenue streams in the breakdown below:

• Sales of man-made tiles accounted for 56% of Q3 2025 sales.
• Sales of natural stone tiles were 19% of Q3 2025 sales.
• Sales of setting and maintenance materials represented 14% of Q3 2025 sales.
• Sales of accessories and tools brought in 8% of Q3 2025 sales.
• Delivery service fees made up the final 3% of Q3 2025 sales.

The delivery service fees, while small at 3% of the quarterly total, are interesting because management noted that increased delivery expenses contributed to the margin compression during the quarter. So, while it's a revenue line, it comes with associated costs that impact profitability.

For context on the overall sales performance leading up to this point, here are some historical revenue snapshots:

• Revenue in 2024 was $0.34 Billion USD.
• Revenue in 2023 was $0.37 Billion USD.
• The TTM Revenue as of Q3 2025 is reported as $0.33 Billion USD.

The company is clearly focused on selling the finished tile product. Finance: draft 13-week cash view by Friday.