Tilly’s, Inc. (NYSE: TLYS, the "Company") today announced
financial results for the third quarter of fiscal 2023 ended
October 28, 2023.
"Our third quarter results represent a sequential improvement
over the first and second quarters of the fiscal year. We continue
to work towards protecting product margins, managing inventories
and controlling operating expenses amid a continuing difficult
economic environment, particularly for our young customer
demographic," commented Ed Thomas, President and Chief Executive
Officer. "Although more promotionally driven than in years past, we
were pleased to produce comparable net sales growth compared to
last year over Black Friday weekend."
Operating Results Overview
Fiscal 2023 Third Quarter Operating
Results Overview
The following comparisons refer to the Company's operating
results for the third quarter of fiscal 2023 ended October 28, 2023
versus the third quarter of fiscal 2022 ended October 29, 2022.
- Total net sales were $166.5 million, a decrease of $11.4
million or 6.4%, compared to $177.8 million last year. Total
comparable net sales, including both physical stores and e-commerce
("e-com"), decreased by 9.0%.
- Net sales from physical stores were $132.4 million, a decrease
of $9.1 million or 6.4%, compared to $141.5 million last year, with
a comparable store net sales decrease of 9.1%. Net sales from
physical stores represented 79.6% of total net sales both this year
and last year. The Company ended the third quarter with 249 total
stores compared to 247 total stores at the end of the third quarter
last year.
- Net sales from e-com were $34.0 million, a decrease of $2.3
million or 6.2%, compared to $36.3 million last year. E-com net
sales represented 20.4% of total net sales both this year and last
year.
- Gross profit, including buying, distribution, and occupancy
costs, was $48.7 million, or 29.3% of net sales, compared to $54.6
million, or 30.7% of net sales, last year. Buying, distribution,
and occupancy costs deleveraged by 90 basis points, despite being
$1.0 million lower than last year primarily due to a decrease in
distribution costs resulting from reduced freight costs, partially
offset by higher occupancy costs as a result of two net additional
stores compared to last year. Product margins declined by 50 basis
points primarily due to increased markdowns and estimated inventory
valuation reserves.
- Selling, general and administrative ("SG&A") expenses were
$51.2 million, or 30.8% of net sales, compared to $48.3 million, or
27.1% of net sales, last year. Primary SG&A increases were
attributable to non-cash store impairment charges of $1.7 million,
marketing expenses of $0.7 million, and combined store and
corporate payroll and related benefits expenses of $0.7
million.
- Operating loss was $(2.5) million, or (1.5)% of net sales,
compared to operating income of $6.3 million, or 3.6% of net sales,
last year, due to the combined impact of the factors noted
above.
- Other income was $1.3 million compared to $0.7 million last
year, primarily attributable to earning significantly higher rates
of return on our marketable securities compared to last year.
- Income tax benefit was $(0.3) million, or 28.0% of pre-tax
loss, compared to income tax expense of $1.8 million, or 26.3% of
pre-tax income, last year. The increase in the effective income tax
rate was primarily attributable to decrease in pre-tax income and
discrete income tax items associated with stock-based
compensation.
- Net loss was $(0.8) million, or $(0.03) per share, compared to
net income of $5.1 million, or $0.17 per diluted share, last year.
Weighted average shares were 29.9 million this year compared to
30.0 million diluted shares last year.
Fiscal 2023 Year-to-Date Third Quarter
Operating Results Overview
The following comparisons refer to the Company's operating
results for the first thirty-nine weeks of fiscal 2023 ended
October 28, 2023 versus the first thirty-nine weeks of fiscal 2022
ended October 29, 2022.
- Total net sales were $450.1 million, a decrease of $41.9
million or 8.5%, compared to $491.9 million last year. Total
comparable net sales, including both physical stores and e-com,
decreased by 11.3%.
- Net sales from physical stores were $360.0 million, a decrease
of $36.1 million or 9.1%, compared to $396.1 million last year,
with a comparable store net sales decrease of 12.3%. Net sales from
physical stores represented 80.0% of total net sales compared to
80.5% of total net sales last year.
- Net sales from e-com were $90.0 million, a decrease of $5.8
million or 6.1%, compared to $95.8 million last year. E-com net
sales represented 20.0% of total net sales compared to 19.5% of
total net sales last year.
- Gross profit, including buying, distribution, and occupancy
costs, was $119.0 million, or 26.4% of net sales, compared to
$150.4 million, or 30.6% of net sales, last year. Buying,
distribution, and occupancy costs deleveraged by 260 basis points
and increased by $2.3 million collectively, predominantly due to
occupancy costs, as a result of operating two net additional stores
and carrying these costs against a lower level of net sales this
year, partially offset by a decrease in distribution costs
resulting from reduced freight costs. Product margins declined by
150 basis points primarily due to increased markdowns and estimated
inventory valuation reserves.
- SG&A expenses were $141.4 million, or 31.4% of net sales,
compared to $137.8 million, or 28.0% of net sales, last year.
Primary SG&A increases were attributable to non-cash store
impairment charges of $2.6 million and corporate payroll and
related benefits expenses of $1.4 million, primarily due to the
impact of wage increases associated with employee retention. These
increases were partially offset by smaller reductions in store
supplies and store payroll.
- Operating loss was $(22.5) million, or (5.0)% of net sales,
compared to operating income of $12.6 million, or 2.6% of net
sales, last year, due to the combined impact of the factors noted
above.
- Other income was $3.6 million compared to $0.9 million last
year, primarily due to earning significantly higher rates of return
on our marketable securities compared to last year.
- Income tax benefit was $(4.9) million, or 26.0% of pre-tax
loss, compared to income tax expense of $3.7 million, or 27.2% of
pre-tax income, last year. The decrease in the effective income tax
rate was primarily attributable to a decrease in pre-tax income and
discrete income tax items associated with stock-based
compensation.
- Net loss was $(13.9) million, or $(0.47) per share, compared to
net income of $9.8 million, or $0.32 per diluted share, last year.
Weighted average shares were 29.8 million this year compared to
30.4 million diluted shares last year.
Balance Sheet and Liquidity
As of October 28, 2023, the Company had $93.9 million of cash
and marketable securities and no debt outstanding compared to
$105.8 million and no debt outstanding at the end of the third
quarter last year. The Company ended the third quarter with
inventories at cost up 0.8% per square foot while unit inventories
were down 3.2% per square foot compared to last year.
Total year-to-date capital expenditures at the end of the third
quarter were $10.5 million this year compared to $11.9 million last
year. The Company currently expects its total capital expenditures
for fiscal 2023 will be approximately $13 million, inclusive of 7
total new stores and upgrades to certain distribution and
information technology systems.
Fiscal 2023 Fourth Quarter Outlook
This year's fourth quarter includes an additional week, making
it a 14-week quarter compared to 13 weeks last year. Total
comparable net sales through November 28, 2023, decreased by (6.5)%
with a comparable net sales decrease in physical stores of (13.6)%
and an increase in e-commerce comparable net sales of 11.0%. Based
on current quarter-to-date comparable net sales results and current
and historical trends, the Company currently estimates that its
fiscal 2023 fourth quarter net sales will be in the range of
approximately $172 million to $178 million, translating to an
estimated comparable net sales decrease in the range of
approximately (6)% to (9)% compared to last year. The Company
currently estimates its SG&A expenses for the fourth quarter of
fiscal 2023 to be approximately $55 million to $56 million, pre-tax
loss to be in the range of approximately $(5.0) million to $(8.0)
million, and estimated income tax rate to be approximately 26%. The
Company currently expects its loss per share for the fourth quarter
of fiscal 2023 to be in the range of $(0.12) to $(0.20) based on
estimated weighted average shares of approximately 29.9 million.
The Company currently expects to have 248 stores open at the end of
the fiscal year, a net decrease of one store from the end of last
fiscal year.
Fiscal 2024 New Store and Capital Expenditure Plans
The Company currently expects its total capital expenditures for
fiscal 2024 not to exceed $15 million, primarily for the
construction of 4 new stores and continued upgrades to certain
distribution and information technology systems.
Conference Call Information
A conference call to discuss these financial results is
scheduled for today, November 30, 2023, at 4:30 p.m. ET (1:30 p.m.
PT). Investors and analysts interested in participating in the call
are invited to dial (877) 300-8521 (domestic) or (412) 317-6026
(international). The conference call will also be available to
interested parties through a live webcast at www.tillys.com. Please
visit the website and select the “Investor Relations” link at least
15 minutes prior to the start of the call to register and download
any necessary software. A telephone replay of the call will be
available until December 7, 2023, by dialing (844) 512-2921
(domestic) or (412) 317-6671 (international) and entering the
conference identification number: 10183514.
About Tillys
Tillys is a leading, destination specialty retailer of casual
apparel, footwear, accessories and hardgoods for young men, young
women, boys and girls with an extensive selection of iconic global,
emerging, and proprietary brands rooted in an active, outdoor and
social lifestyle. Tillys is headquartered in Irvine, California and
currently operates 252 total stores across 33 states, as well as
its website, www.tillys.com.
Forward-Looking Statements
Certain statements in this press release are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. In particular, statements regarding our current
operating expectations in light of historical results, the impacts
of inflation and potential recession on us and our customers,
including on our future financial condition or operating results,
expectations regarding customer traffic, our supply chain, our
ability to properly manage our inventory levels, and any other
statements about our future cash position, financial flexibility,
expectations, plans, intentions, beliefs or prospects expressed by
management are forward-looking statements. These forward-looking
statements are based on management’s current expectations and
beliefs, but they involve a number of risks and uncertainties that
could cause actual results or events to differ materially from
those indicated by such forward-looking statements, including, but
not limited to the impact of inflation on consumer behavior and our
business and operations, supply chain difficulties, and our ability
to respond thereto, our ability to respond to changing customer
preferences and trends, attract customer traffic at our stores and
online, execute our growth and long-term strategies, expand into
new markets, grow our e-commerce business, effectively manage our
inventory and costs, effectively compete with other retailers,
attract talented employees, or enhance awareness of our brand and
brand image, general consumer spending patterns and levels,
including changes in historical spending patterns, the markets
generally, our ability to satisfy our financial obligations,
including under our credit facility and our leases, and other
factors that are detailed in our Annual Report on Form 10-K, filed
with the Securities and Exchange Commission (“SEC”), including
those detailed in the section titled “Risk Factors” and in our
other filings with the SEC, which are available on the SEC’s
website at www.sec.gov and on our website at www.tillys.com under
the heading “Investor Relations”. Readers are urged not to place
undue reliance on these forward-looking statements, which speak
only as of the date of this press release. We do not undertake any
obligation to update or alter any forward-looking statements,
whether as a result of new information, future events or otherwise.
This release should be read in conjunction with our financial
statements and notes thereto contained in our Form 10-K.
Tilly’s, Inc.
Consolidated Balance
Sheets
(In thousands, except par
value)
(unaudited)
October 28,
2023
January 28,
2023
October 29,
2022
ASSETS
Current assets:
Cash and cash equivalents
$
44,425
$
73,526
$
75,786
Marketable securities
49,523
39,753
29,985
Receivables
7,118
9,240
11,352
Merchandise inventories
82,753
62,117
81,589
Prepaid expenses and other current
assets
11,816
17,762
16,036
Total current assets
195,635
202,398
214,748
Operating lease assets
216,205
212,845
222,664
Property and equipment, net
49,220
50,635
51,279
Deferred tax assets
13,229
8,497
10,261
Other assets
1,685
1,377
1,488
TOTAL ASSETS
$
475,974
$
475,752
$
500,440
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
27,025
$
15,956
$
30,225
Accrued expenses
14,688
15,889
17,239
Deferred revenue
13,520
16,103
13,859
Accrued compensation and benefits
10,590
8,183
9,756
Current portion of operating lease
liabilities
50,063
48,864
50,047
Current portion of operating lease
liabilities, related party
3,048
2,839
2,771
Other liabilities
330
470
806
Total current liabilities
119,264
108,304
124,703
Long-term liabilities:
Noncurrent portion of operating lease
liabilities
171,388
167,913
176,621
Noncurrent portion of operating lease
liabilities, related party
20,081
22,388
23,129
Other liabilities
391
349
455
Total long-term liabilities
191,860
190,650
200,205
Total liabilities
311,124
298,954
324,908
Stockholders’ equity:
Common stock (Class A)
23
23
23
Common stock (Class B)
7
7
7
Preferred stock
—
—
—
Additional paid-in capital
171,754
170,033
168,749
(Accumulated deficit) retained
earnings
(7,410
)
6,530
6,634
Accumulated other comprehensive income
476
205
119
Total stockholders’ equity
164,850
176,798
175,532
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
475,974
$
475,752
$
500,440
Tilly’s, Inc.
Consolidated Statements of
Operations
(In thousands, except per share
data)
(unaudited)
Thirteen Weeks Ended
Thirty-Nine Weeks
Ended
October 28,
2023
October 29,
2022
October 28,
2023
October 29,
2022
Net sales
$
166,475
$
177,847
$
450,063
$
491,930
Cost of goods sold (includes buying,
distribution, and occupancy costs)
116,825
122,346
328,297
338,870
Rent expense, related party
931
918
2,793
2,680
Total cost of goods sold (includes
buying, distribution, and occupancy costs)
117,756
123,264
331,090
341,550
Gross profit
48,719
54,583
118,973
150,380
Selling, general and administrative
expenses
51,101
48,134
141,035
137,405
Rent expense, related party
134
134
400
400
Total selling, general and
administrative expenses
51,235
48,268
141,435
137,805
Operating (loss) income
(2,516
)
6,315
(22,462
)
12,575
Other income, net
1,341
675
3,625
862
(Loss) income before income
taxes
(1,175
)
6,990
(18,837
)
13,437
Income tax (benefit) expense
(328
)
1,841
(4,897
)
3,656
Net (loss) income
$
(847
)
$
5,149
$
(13,940
)
$
9,781
Basic (loss) earnings per share of Class A
and Class B common stock
$
(0.03
)
$
0.17
$
(0.47
)
$
0.32
Diluted (loss) earnings per share of Class
A and Class B common stock
$
(0.03
)
$
0.17
$
(0.47
)
$
0.32
Weighted average basic shares
outstanding
29,872
29,894
29,834
30,226
Weighted average diluted shares
outstanding
29,872
30,050
29,834
30,428
Tilly’s, Inc.
Consolidated Statements of
Cash Flows
(In thousands)
(unaudited)
Thirty-Nine Weeks
Ended
October 28,
2023
October 29,
2022
Cash flows from operating
activities
Net (loss) income
$
(13,940
)
$
9,781
Adjustments to reconcile net (loss) income
to net cash used in operating activities:
Depreciation and amortization
9,547
10,515
Stock-based compensation expense
1,684
1,764
Impairment of assets
2,631
14
Loss on disposal of assets
2
64
(Gain) interest on maturities of
marketable securities
(1,156
)
(230
)
Deferred income taxes
(4,732
)
1,167
Changes in operating assets and
liabilities:
Receivables
4,196
(705
)
Merchandise inventories
(20,636
)
(15,944
)
Prepaid expenses and other assets
5,980
557
Accounts payable
11,033
2,068
Accrued expenses
106
(4,253
)
Accrued compensation and benefits
2,407
(7,300
)
Operating lease liabilities
(4,545
)
(4,637
)
Deferred revenue
(2,583
)
(3,237
)
Other liabilities
(452
)
(706
)
Net cash used in operating
activities
(10,458
)
(11,082
)
Cash flows from investing
activities
Purchases of marketable securities
(88,146
)
(49,779
)
Purchases of property and equipment
(10,543
)
(11,897
)
Proceeds from maturities of marketable
securities
80,000
117,189
Proceeds from sale of property and
equipment
9
—
Net cash (used in) provided by
investing activities
(18,680
)
55,513
Cash flows from financing
activities
Proceeds from exercise of stock
options
210
56
Taxes paid on short-swing profits
disgorgement payment
(173
)
—
Share repurchases related to share
repurchase program
—
(10,902
)
Net cash provided by (used in)
financing activities
37
(10,846
)
Change in cash and cash
equivalents
(29,101
)
33,585
Cash and cash equivalents, beginning of
period
73,526
42,201
Cash and cash equivalents, end of
period
$
44,425
$
75,786
Tilly's, Inc.
Store Count and Square
Footage
Store
Count at
Beginning of
Quarter
New Stores
Opened
During Quarter
Stores
Permanently
Closed
During Quarter
Store Count at
End of Quarter
Total Gross
Square Footage
End of Quarter
(in thousands)
2022 Q1
241
—
—
241
1,764
2022 Q2
241
2
1
242
1,767
2022 Q3
242
5
—
247
1,800
2022 Q4
247
4
2
249
1,818
2023 Q1
249
1
2
248
1,809
2023 Q2
248
—
2
246
1,792
2023 Q3
246
3
—
249
1,810
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231130866225/en/
Investor Relations: Michael Henry,
Executive Vice President, Chief Financial Officer (949) 609-5599,
ext. 17000 irelations@tillys.com
Tillys (NYSE:TLYS)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
Tillys (NYSE:TLYS)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024