Tandy Leather 2025 Q2 Earnings Misses Targets with Net Income Down 300%

Tandy Leather reported its fiscal 2025 Q2 earnings on August 12, 2025. The company posted a net loss of $0.02 per share, a sharp reversal from a $0.01 per share profit in the prior-year period. Tandy Leather missed expectations and did not raise or lower guidance for the full year, as it anticipates ongoing operating challenges linked to facility transitions and tariffs.

Revenue
Tandy Leather’s total revenue rose 2.8% year-over-year to $17.77 million in Q2 2025, compared to $17.29 million in Q2 2024.

Earnings/Net Income
Tandy Leather swung to a loss of $0.02 per share in Q2 2025, a 300.0% negative change from the prior year. The company recorded a net loss of $199,000, representing a 297.0% deterioration from a net income of $101,000 in the same quarter the previous year. Notably, the loss marks a record high for fiscal Q2 net income in 19 years, underscoring the severity of the downturn.

Price Action
The stock of Tandy Leather fell 3.69% in the latest trading day and 5.04% over the past week, though it managed a 2.85% gain month-to-date.

Post Earnings Price Action Review
A strategy of buying Tandy Leather shares following the Q2 earnings report, which showed a revenue increase quarter-over-quarter, proved highly ineffective. Over a 30-day holding period, the strategy returned -47.41%, significantly underperforming the 54.75% benchmark. The negative compound annual growth rate of -20.29% and an excess return of -102.16% highlight the strategy’s failure. A Sharpe ratio of -0.47 and a maximum drawdown of 0.00% further underscore the poor risk-adjusted performance.

CEO Commentary
Johan Hedberg, CEO of Tandy Leather, noted improved sales productivity in U.S. retail stores as a key factor driving the modest revenue growth. However, he acknowledged the broader economic headwinds and forecast operating losses for the full year of 2025, citing increased costs from facility relocations and lease transitions. Hedberg also warned that newly-announced tariffs could pose a threat to future sales and profits.

Guidance
Tandy Leather expects operating losses for full-year 2025, primarily due to the costs associated with facility transitions. The CEO reiterated continued sales momentum into the third quarter but refrained from providing specific revenue or earnings forecasts.

Additional News
Tandy Leather completed the sale of its corporate headquarters in July 2025, marking a significant step in its strategic cost optimization efforts. The company announced a leadership reorganization, with Johan Hedberg taking on expanded responsibilities across operations and finance. In early August, Tandy Leather also revealed plans to streamline its supply chain operations through a partnership with a new logistics provider, aiming to enhance delivery efficiency.