FORT WORTH, Texas, Dec. 1, 2014 (GLOBE NEWSWIRE) -- Tandy Leather Factory, Inc. (Nasdaq:TLF) announced today that it is lowering its 2014 earnings guidance while maintaining its 2014 revenue guidance. The company states a higher ratio of leather sales to non-leather sales as the reason for the earnings revision.
Chief Executive Officer and President, Jon Thompson, commented, "Our 2014 sales are on track with our internal targets. However, as a result of sales of leather in October being stronger than we originally expected and our November sales suggesting the same, we expect gross profit margins to decrease by several basis points in the fourth quarter, compared to last year's fourth quarter. Leather is the lowest margin item we sell. Therefore, the more leather we sell, the lower the gross profit margin we achieve. With that said, the higher than expected leather sales and resulting lower gross profit margin is not due to significant discounting. It's strictly a function of the product mix."
Shannon L. Greene, Chief Financial Officer and Treasurer, added, "We can predict somewhat the mix of product our customers are going to buy based on our targeted advertising campaigns and our fourth quarter campaigns are featuring our large supply of leather. If the customers purchase enough other product when they buy leather, our gross profit margins and operating margin could be better than we are estimating now. Regardless, even though we are revising our earnings estimate downward, we still expect our 2014 earnings to be higher than our 2013 earnings."
Financial Outlook:
The following statements are based on TLF's current expectations as of December 1, 2014. These statements are forward-looking statements and should be read in conjunction with the cautionary information about these statements that appears below.
Estimated consolidated net sales for 2014 are expected to be in the range of $82-83 million. EPS for 2014 are expected to be in the range of $0.75-$0.78, down from $0.80-$0.83. Average shares outstanding, both basic and diluted, in 2014 are estimated to be approximately 10.2 million. The Company assumes an effective tax rate for the year between 36% and 37%.
Tandy Leather Factory, Inc., (http://www.tandyleatherfactory.com), headquartered in Fort Worth, Texas, is a specialty retailer and wholesale distributor of a broad product line including leather, leatherworking tools, buckles and adornments for belts, leather dyes and finishes, saddle and tack hardware, and do-it-yourself kits. The Company distributes its products through its 28 Leather Factory stores, located in 18 states and 3 Canadian provinces, 80 Tandy Leather retail stores, located in 37 states and 6 Canadian provinces, and three combination wholesale/retail stores located in the United Kingdom, Australia and Spain. Its common stock trades on the Nasdaq with the symbol "TLF". To be included on Tandy Leather Factory's email distribution list, go to http://www.b2i.us/irpass.asp?BzID=1625&to=ea&s=0.
This news release may contain statements regarding future events, occurrences, circumstances, activities, performance, outcomes and results that are considered "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Actual results and events may differ from those projected as a result of certain risks and uncertainties. These risks and uncertainties include but are not limited to: changes in general economic conditions, negative trends in general consumer-spending levels, failure to realize the anticipated benefits of opening retail stores; availability of hides and leathers and resultant price fluctuations; change in customer preferences for our product, and other factors disclosed in our filings with the Securities and Exchange Commission. These forward-looking statements are made only as of the date hereof, and except as required by law, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.