-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 Pv7Y2V9Br3zLkGUUngIXpdjqZkl80k1cHQKAKCSWOFQPM2Y/1cfSbxnW++W+vUWO
 KeGWywu9DOb1LfXamPPPnA==

<SEC-DOCUMENT>0000909724-04-000054.txt : 20041109
<SEC-HEADER>0000909724-04-000054.hdr.sgml : 20041109
<ACCEPTANCE-DATETIME>20041108201738
ACCESSION NUMBER:		0000909724-04-000054
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20041102
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20041109
DATE AS OF CHANGE:		20041108

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			LEATHER FACTORY INC
		CENTRAL INDEX KEY:			0000909724
		STANDARD INDUSTRIAL CLASSIFICATION:	LEATHER & LEATHER PRODUCTS [3100]
		IRS NUMBER:				752543540
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-12368
		FILM NUMBER:		041127239

	BUSINESS ADDRESS:	
		STREET 1:		3847 EAST LOOP
		STREET 2:		820 SOUTH
		CITY:			FT WORTH
		STATE:			TX
		ZIP:			76119
		BUSINESS PHONE:		8174964414

	MAIL ADDRESS:	
		STREET 1:		3847 EAST LOOP
		STREET 2:		820 SOUTH
		CITY:			FT WORTH
		STATE:			TX
		ZIP:			76119
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>doc1.txt
<TEXT>


                       SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, D.C.

                                    FORM 8-K

                             CURRENT REPORT PURSUANT
                          TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

     Date  of  report  (Date  of  earliest  event  reported):  November  2, 2004


                            The Leather Factory, Inc.
             (Exact Name of Registrant as Specified in Its Charter)


                                    Delaware
                 (State or Other Jurisdiction of Incorporation)


           1-12368                          75-2543540
(Commission  File  Number)     (IRS  Employer  Identification  Number)


3847  East  Loop  820  South,  Fort  Worth,  Texas          76119
Address  of  Principal  Executive  Offices)              (Zip  Code)


                                 (817) 496-4414
              (Registrant's Telephone Number, Including Area Code)


  (Former  Name  or  Former  Address,  if  Changed  Since  Last  Report)


<PAGE>

ITEM  2.02.  RESULTS  OF  OPERATIONS  AND  FINANCIAL  CONDITION

The  Registrant  is  furnishing  the  press  release  attached  as  Exhibit 99.1
announcing  the  Registrant's  third quarter 2004 financial results.  This press
release  was  issued  on  November  2,  2004.

ITEM  9.01.  FINANCIAL  STATEMENTS  AND  EXHIBITS

     Exhibits.

     99.1  Press release dated November 2, 2004 furnished pursuant to Item 2.02.


                                   SIGNATURES

     Pursuant  to  the  requirements of the Securities Exchange Act of 1934, the
Registrant  has  duly  caused  this  report  to  be  signed on its behalf by the
undersigned  hereunto  duly  authorized.

                              THE  LEATHER  FACTORY,  INC.


Date:  November  8,  2004     BY:  /s/  Wray  Thompson
                              Wray  Thompson,  Chairman  of  the  Board
                                 and  Chief  Executive  Officer

<PAGE>

     EXHIBIT  99.1

       FOR IMMEDIATE RELEASE                              NOVEMBER 2, 2004

              THE LEATHER FACTORY REPORTS 3RD QUARTER 2004 RESULTS

FORT  WORTH,  TEXAS  -  The  Leather  Factory,  Inc.  (AMEX: TLF) today reported
financial  results  for  the third quarter of 2004.  Consolidated net income for
the  quarter  ended September 30, 2004 was $427,000 compared to consolidated net
income  of  $602,000  for the third quarter of 2003.  Fully diluted earnings per
share  for  the quarter was $0.04, compared to $0.06 in the same quarter of last
year.  Total  sales  for  the quarter ended September 30, 2004 increased 4.6% to
$10.6  million  from  $10.1  million  for  the  third  quarter  last  year.

Consolidated  sales  for  the  nine  months  ended September 30, 2004 were $33.7
million,  an  increase  of  8.3%  over total sales of $31.1 million in the first
three  quarters  of 2003.  Consolidated net income for the current year was $1.9
million  or  $0.17  per  fully-diluted  share  versus  $2.1 million or $0.20 per
fully-diluted  share  in  the  comparable  period  last  year.

Sales at our Tandy Leather subsidiary increased $720,000 in the third quarter, a
31%  improvement  over  last  year's third quarter.  Thirty-six stores comprised
Tandy  Leather's retail operations on September 30, 2004, compared to twenty-six
retail  stores  a year ago.  Four stores were added in the third quarter of 2004
bringing  the  total  number of new stores added in 2004 to ten as of the end of
the  quarter.  For  the first nine months of 2004, Tandy Leather sales increased
$2.9  million,  or 46%, over the first nine months of 2003.  Third quarter sales
for  the  Leather  Factory  wholesale  division decreased $305,000 over the same
quarter  last year, a 4.1% decline.  The sales decrease is due to a reduction in
sales to our national account customers of $353,000 that was partially offset by
a $48,000 sales gain to our other customer groups.  For the first nine months of
2004,  the  Leather Factory wholesale division sales were down $440,000 over the
same  period  in  2003  as  a  result  of sales declines to our national account
customers  totaling  $1.2  million  partially offset by sales gains to our other
customer  groups  of  $740,000.

Consolidated  gross  profit  margin  for  the  current  quarter  was  56.1%,  an
improvement  from  55.2%  for  the  third  quarter of 2003.  For the first three
quarters,  consolidated  gross profit margin was 55.3%, an improvement over last
year's  gross  profit  margin  of  54.5%.  Consolidated  operating expenses rose
$490,000  in the current quarter and $1.8 million for the first nine months over
the  same  periods  a  year  ago.  Operating costs associated with the new Tandy
Leather  stores,  advertising  expenses, and rising healthcare costs account for
the  majority  of  the  increase.

Wray  Thompson,  Chairman  and  Chief  Executive  Officer, commented, "Our third
quarter turned out to be a continuation of our second quarter.  The Tandy stores
reported solid sales gains although business this summer has been slower than we
initially  expected.  Nonetheless,  we  have met our internal goal of opening or
acquiring  twelve  Tandy stores this year, and our Tandy retail store sales have
increased  46%  over  the  first  nine  months of 2003, increasing higher-margin
retail sales to 27% of our total revenue.  The Leather Factory wholesale centers
generated  a modest sales gain for the quarter but are still running better than
4%  gains on a year-to-date basis.  However, our national account group is still
reporting  sales  declines  which  more than offset the wholesale centers' sales
gains.  While  rising  health  care  costs  and  expenses  associated  with
Sarbanes-Oxley  compliance  continue to impact our operating margins, we believe
the sales decline to our national account group is the reason we must adjust our
2004  guidance  downward.  However, with the growth in our retail sales division
and  a  continued  focus  on  cost  reduction,  we expect 2005 earnings to be up
approximately  15-18%  over  our  2004  expectations."
<PAGE>

Financial  Outlook:

The  following statements are based on TLF's current expectations as of November
2,  2004.  These statements are forward-looking statements and should be read in
conjunction  with the cautionary information about these statements that appears
below.

The  Company  estimates  consolidated net sales for 2004 will be in the range of
$44  to  $46  million.  Diluted  EPS  for 2004 is expected to be in the range of
$0.24 to $0.26.  For 2005, consolidated net sales will be in the range of $47 to
$48  million  and  diluted EPS is expected to be in the range of $0.28 to $0.30.
Average  diluted  shares  outstanding  in  2004  and  2005  is  estimated  to be
approximately  11  million  shares.  The  Company  assumes an effective tax rate
annually  between  35%  and  37%.

The  Leather  Factory,  Inc.,  (http://www.leatherfactory.com), headquartered in
Fort  Worth,  Texas,  is  a  marketer  and  distributor  of a broad product line
including  leather,  leatherworking  tools,  buckles  and  adornments for belts,
leather  dyes  and finishes, shoe repair supplies, saddle and tack hardware, and
do-it-yourself leathercraft kits. The Company distributes its products worldwide
though  its  Leather  Factory  stores,  Tandy  Leather  retail  stores  and
mail/telephone/website  orders  (http://www.tandyleather.com).  Its common stock
trades  on  the  American  Stock  Exchange  with  the  symbol  "TLF".

Contact:  Wray  Thompson, CEO, The Leather Factory, Inc.  (817) 496-4414
    Shannon L. Greene, CFO, The Leather Factory, Inc. sgreene@leatherfactory.com

This  news  release  contains  forward-looking  statements.  All forward-looking
statements  made  here  or in other news releases issued by The Leather Factory,
Inc.  are  based  on  current expectations as of the date of the release.  These
forward-looking  statements involve risks and uncertainties that could cause the
results  of  The  Leather  Factory,  Inc. to differ materially from management's
current  expectations.  Many  of these risks and uncertainties are detailed from
time to time in TLF's reports filed with the Securities and Exchange Commission,
including  its  most  recent  annual  report  on  Form  10-K and the most recent
quarterly report on Form 10-Q.  Investors are reminded that past performance may
not  be  predictive  of  future  results.


Selected  financial  data:
<TABLE>
<CAPTION>

                 QUARTER ENDED 09/30/04  NINE MONTHS ENDED 09/30/04
                 ----------------------  --------------------------
<S>              <C>          <C>          <C>          <C>
                               OPERATING                  OPERATING
                    SALES        INCOME       SALES        INCOME
                 -----------  ----------   -----------  -----------
Leather Factory  $ 7,067,483  $  583,253   $22,934,369  $ 2,306,807
Tandy              3,053,712     168,459     9,193,196      660,782
Cushman              458,879      23,531     1,593,199      108,625
                 -----------  ----------   -----------  -----------
Total Operations $10,580,074  $  775,243   $33,720,764  $ 3,076,214
                 ===========  ==========   ===========  ===========
</TABLE>

<TABLE>
<CAPTION>
TANDY LEATHER SALES          QUARTER ENDED 09/30/04      NINE MONTHS ENDED 9/30/04
                             =======================     =========================
<S>                          <C>           <C>           <C>           <C>
                             # OF STORES     SALES       # OF STORES     SALES
                             -----------   ----------    -----------   ----------
Same store sales                  24       $2,323,564         20       $6,380,603
New store sales                   12          730,148         16        2,812,593
                                           ----------                  ----------
Total Sales - Tandy Leather                $3,053,712                  $9,193,196
                                           ==========                  ==========
</TABLE>

<PAGE>

                            THE LEATHER FACTORY, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)
         FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
<TABLE>
<CAPTION>
                                                       Three Months                Nine months
                                                --------------------------  --------------------------
<S>                                             <C>            <C>          <C>           <C>
                                                    2004          2003         2004          2003
                                                -------------  -----------  ------------  ------------
NET SALES                                       $ 10,580,074   $10,119,070  $33,720,764   $31,139,830
COST OF SALES                                      4,640,641     4,529,258   15,075,359    14,183,460
                                                -------------  -----------  ------------  ------------
Gross Profit                                       5,939,433     5,589,812   18,645,405    16,956,370
OPERATING EXPENSES                                 5,164,190     4,672,820   15,569,191    13,769,241
                                                -------------  -----------  ------------  ------------
INCOME FROM OPERATIONS                               775,243       916,992    3,076,214     3,187,129

Interest expense                                      14,910        40,735       41,019       174,555
Other, net                                           (30,600)        6,089       (3,509)      (68,433)
                                                -------------  -----------  ------------  ------------
Total other expense                                  (15,690)       46,824       37,510       106,122
                                                -------------  -----------  ------------  ------------
INCOME BEFORE INCOME TAXES                           790,933       870,168    3,038,704     3,081,007
PROVISION FOR INCOME TAXES                           363,548       268,488    1,124,141       926,105
                                                -------------  -----------  ------------  ------------
NET INCOME                                      $    427,385   $   601,680  $ 1,914,563   $ 2,154,902
                                                ============   ===========  ===========   ============

NET INCOME PER COMMON SHARE - BASIC             $       0.04   $      0.06  $      0.18   $      0.21
                                                ============   ===========  ===========   ============
NET INCOME PER COMMON SHARE - DILUTED           $       0.04   $      0.06  $      0.17   $      0.20
                                                ============   ===========  ===========   ============

Weighted Average Number of Shares Outstanding:
Basic                                             10,560,661    10,394,374   10,540,374    10,269,415
Diluted                                           10,931,940    10,902,794   10,986,541    10,840,764
</TABLE>



                            THE LEATHER FACTORY, INC.
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                09/30/04       12/31/03
<S>                                                           <C>           <C>
                                                              (UNAUDITED)
                                                              ------------  ------------
Cash                                                          $ 1,328,052   $ 1,728,344
Accounts receivable, net of allowance for doubtful accounts     2,242,548     1,828,738
Inventory                                                      12,880,245    11,079,893
Prepaid income taxes                                               14,357       206,023
Deferred income taxes                                             199,881       134,312
Other current assets                                              608,857       702,236
                                                              ------------  ------------
TOTAL CURRENT ASSETS                                           17,273,940    15,679,546
                                                              ------------  ------------
Property and equipment, net                                     1,889,187     1,905,893
Goodwill and other intangibles, net                             1,153,774     1,136,784
Other assets                                                      324,795       336,183
                                                              ------------  ------------
                                                              $20,641,696   $19,058,406
                                                              ============  ============

Accounts payable                                              $ 1,632,357   $ 1,545,079
Accrued expenses and other liabilities                          1,178,921     1,000,427
Notes payable and current maturities of long-term debt                  -         1,134
                                                              ------------  ------------
TOTAL CURRENT LIABILITIES                                       2,811,278     2,546,640
                                                              ------------  ------------
Deferred income taxe                                              288,617       209,289
Notes payable and long-term debt, net of current maturities     1,006,821     1,792,984
                                                              ------------  ------------
Total liabilities                                               4,106,716     4,548,913
                                                              ------------  ------------

Common stock                                                       25,345        25,171
Paid-in capital                                                 4,796,999     4,673,158
Treasury stock                                                    (23,960)            -
Retained earnings                                              11,719,281     9,804,719
Notes receivable secured by common stock                          (15,000)      (20,000)
Accumulated other comprehensive loss                               32,315        26,445
                                                              ------------  ------------
Total Stockholders' Equity                                     16,534,980    14,509,493
                                                              ------------  ------------
                                                              $20,641,696   $19,058,406
                                                              ============  ============
</TABLE>
<PAGE>

                            THE LEATHER FACTORY, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
<TABLE>
<CAPTION>

<S>                                                                                   <C>           <C>
                                                                                          2004          2003
                                                                                      ------------  ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                                          $ 1,914,563   $ 2,154,902
  Adjustments to reconcile net income to net cash provided by operating activities:
     Depreciation & amortization                                                          366,077       397,959
     Loss on disposal of assets                                                                 -         9,372
     Deferred income taxes                                                                 13,759        59,508
     Other                                                                                  3,136        14,960
     Net changes in assets and liabilities:
       Accounts receivable-trade, net                                                    (413,809)     (390,808)
       Inventory                                                                       (1,739,977)    1,074,217
       Income taxes                                                                       191,666         2,936
       Other current assets                                                                93,380       (37,153)
       Accounts payable                                                                    87,279      (162,618)
       Accrued expenses and other liabilities                                             178,494    (1,538,342)
                                                                                      ------------  ------------
     Total adjustments                                                                 (1,219,995)     (569,969)
                                                                                      ------------  ------------
      NET CASH PROVIDED BY OPERATING ACTIVITIES                                           694,568     1,584,933
                                                                                      ------------  ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment                                                     (267,552)     (326,284)
  Payments in connection with businesses acquired                                        (156,454)            -
  Proceeds from sale of assets                                                                  -         6,217
  Increase in other assets                                                                 11,387       (22,305)
                                                                                      ------------  ------------
      NET CASH USED IN INVESTING ACTIVITIES                                              (412,619)     (342,372)
                                                                                      ------------  ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net increase (decrease) in revolving credit loans                                      (786,162)   (1,544,417)
  Payments on notes payable and long-term debt                                                  -        (4,878)
  Decrease in cash restricted for payment on revolving credit facility                     (1,134)       43,685
  Payments received on notes secured by common stock                                        5,000        24,003
  Repurchase of common stock (treasury stock)                                             (23,960)            -
  Proceeds from issuance of common stock                                                  124,015       325,688
                                                                                      ------------  ------------
      NET CASH USED IN FINANCING ACTIVITIES                                              (682,241)   (1,155,919)
                                                                                      ------------  ------------
NET CHANGE IN CASH                                                                       (400,292)       86,642
CASH, beginning of period                                                               1,728,344       101,557
                                                                                      ------------  ------------
CASH, end of period                                                                   $ 1,328,052   $   188,199
                                                                                      ============  ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Interest paid during the period                                                     $    43,960   $   178,558
  Income taxes paid during the period, net of (refunds)                                   848,427       809,602
</TABLE>


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
