Tandy Leather Factory (TLF) investor relations material

Executive summary

• Net sales for Q2 2026 increased 1.5% year-over-year to $18.0 million, with gross profit up 10.6% and gross margin improving by 530 basis points to 64.8%.

• Operating income rose to $0.5 million, up 722.9% from Q2 2025.

• Net income for Q2 2026 was $0.4 million, reversing a net loss of $0.2 million in Q2 2025.

• Sales growth was achieved across both retail and e-commerce channels.

• For the six months ended June 30, 2026, net sales grew 2.4% to $37.7 million, with gross profit up 11.3% and net income at $0.6 million.

Financial highlights

• Q2 2026 net sales: $18.0 million (up 1.5% year-over-year); six months: $37.7 million (up 2.4%).

• Q2 2026 gross profit: $11.7 million (up 10.6%); gross margin: 64.8% (up from 59.5%).

• Q2 2026 operating income: $0.5 million (up from $0.07 million); six months: $0.9 million (up from $0.3 million).

• EBITDA from operations was $0.9 million for the quarter.

• Basic and diluted EPS was $0.05, compared to a loss of $0.02 per share last year.

Outlook and guidance

• Focus remains on managing operating expenses and gross margin to deliver free operating cash and operating income amid economic headwinds.

• Selective investment in profitable sales growth continues, with priority on rebuilding a durable, profitable business model.

• Management highlighted continued investment in customer experience and infrastructure, including a new POS system and loyalty program.