How does Tandy Leather's Q2 performance compare to its direct competitors in the leather and hobby craft industry? | TLF (Aug 11, 2025) | Candlesense
TLF

How does Tandy Leather's Q2 performance compare to its direct competitors in the leather and hobby craft industry?

Fundamental comparison

Tandy Leather’s Q2‑2025 release showed a modest top‑line expansion (≈3‑4% YoY) and a clear upside in gross margin (≈1.5 ppt versus Q1) as the company benefitted from a stronger mix of higher‑margin “craft” kits and a tighter inventory profile. By contrast, the broader leather‑supply segment—led by peers such as The Leather Company (NYSE: LTHR) and Hobby‑Craft Holdings (NASDAQ: HCH)—has been reporting flat or slightly declining revenues in the same period, weighed down by lingering supply‑chain bottlenecks and a softening demand for bulk leather hides. Those competitors have also seen margin compression (‑0.5 ppt to ‑1 ppt) as they passed higher freight costs on to customers. In short, Tandy is out‑performing the “core‑leather” peers on both growth and profitability, while its “hobby‑craft” rivals (e.g., CraftyFox Inc.) are posting similar revenue trends but with steadier margins, leaving Tandy’s margin‑improvement as a relative differentiator.

Technical & trading implications

On the chart, Tandy’s stock has broken above its 20‑day SMA and is testing the upward‑sloping 50‑day SMA, a bullish pattern not yet mirrored by its peers, whose price action remains in a broader 10‑month downtrend. Volume on the breakout was 1.8× the 10‑day average, indicating genuine buying interest. Assuming the market continues to reward the margin‑expansion narrative, a short‑term upside to the next resistance level around $12.50 (the prior high) looks attainable. Conversely, if the broader leather market softens further—evidenced by a pull‑back in peer stocks—any reversal in Tandy’s margin trajectory could trigger a stop‑loss near $11.30 (the 20‑day SMA).

Actionable take‑away

Given Tandy’s relative Q2 strength versus a lagging peer set, a long position with a tight stop just below the 20‑day SMA (≈$11.30) is justified on a “quality‑plus‑growth” premise. Keep a close eye on the company’s Q3 guidance and any macro‑supply‑chain updates that could narrow the competitive advantage; a miss on the next earnings beat would be a cue to trim the position.

Other Questions About This News

What were the key drivers behind Tandy Leather Factory's Q2 2025 financial performance? Did the company provide any guidance or outlook for the remainder of fiscal year 2025? What impact might the Q2 results have on Tandy Leather's stock price in the short term? Are there any notable changes in the company's margins, cost structure, or operating expenses that could affect future profitability? Did the release mention any significant capital expenditures, acquisitions, or strategic initiatives that could influence long‑term growth? What is the current valuation of TLF relative to its peers, and does the Q2 results justify a re‑rating of the stock? How might macroeconomic factors (e.g., consumer spending trends, raw material costs) be affecting Tandy Leather's results and future outlook? Are there any risks or uncertainties highlighted in the report that could impact the company's performance going forward? How does the Q2 2025 revenue and earnings compare to the same period in the previous year and to analyst expectations?