New York – Shares of
Tilly’s Inc. (TLYS) fell more than 11 percent in the extended session
Wednesday after the apparel retailer reported fiscal first-quarter earnings
in line with Wall Street expectations.
“Tilly’s continued its positive momentum during the first quarter of
fiscal 2019 with its twelfth consecutive quarter of flat to positive comp
sales,” said Ed Thomas, president and CEO. “Although the second quarter is
off to a slow start, our goal is to continue improving our operating
results during fiscal 2019.”
The U.S. retailer said its same-store sales fell nearly 7 percent
through the Memorial Day holiday weekend. In a financial released issued
Wednesday, Tilly’s explained that the “unseasonable weather across much of
the country,” particularly in California, where most of its stores are
located, resulted in “weak sales results across almost all spring/summer
product categories.”
Regarding the future, sales will improve over the rest of the second
quarter, “assuming more normal weather patterns occur,” Tilly’s said.
tilly earned dollars or cents a share in the quarter
Tilly’s earned 677,000 dollars or 2 cents a share, in the quarter,
compared with 1.2 million dollars, or 4 cents a share, a year ago. Revenue
rose to 130.3 million dollars from 123.6 million dollars last year.
polled by FactSet had expected earnings of 2 cents a share on sales of
129 million dollars.
The company ended first quarter of fiscal 2019 with 229 total stores
compared to 222 total stores last year, both including three RSQ-branded
pop-up stores.
Comparable store net sales, which includes e-commerce net sales,
increased 2.4 percent compared to an increase of 0.1 percent during last
year’s first quarter. E-commerce net sales increased 29.6 percent and
represented approximately 15.1 percent of total net sales this year,
compared to a decrease of 7.2 percent and a 12.2 percent share of total net
sales last year.
Comparable store net sales in physical stores decreased 1.4 percent
Comparable store net sales in physical stores decreased 1.4 percent and
represented approximately 84.9 percent of total net sales, compared to an
increase of 1.2 percent and an 87.8 percent share of total net sales last
year.
Gross profit was 35.7 million dollars, an increase of 0.7 million
dollars or 2 percent, compared to 35 million dollars last year. Gross
margin, or gross profit as a percentage of net sales, decreased to 27.4
percent from 28.3 percent last year.
Selling, general and administrative expenses (“SG&A”) increased from
33.6 million dollars, or 27.2 percent of net sales last year to 35.5
million dollars, or 27.3 percent of net sales, compared to, last year. This
1.9 million dollars increase was primarily attributable to an increase in
store payroll and an increase in e-commerce marketing and fulfilment
expenses associated with e-commerce net sales growth.
Operating income decreased from 1.3 million dollars to 0.1 million
dollars year on year
Operating income was 0.1 million dollars, or 0.1 percent of net sales,
compared to 1.3 million dollars, or 1.1 percent of net sales, last year.
The 1.2 million dollars decline in operating results was largely
attributable to the increased costs associated with e-commerce net sales
growth and the minimum wage impact on store payroll, as explained above,
partially offset by the positive impact of improved comp sales results.
Other income increased to $0.8 million from $0.4 million last year,
primarily due to higher interest rates on our cash and marketable
securities investment portfolio compared to last year.
Income tax expense was 0.3 million dollars, or 30.6 percent of pre-tax
income, compared to 0.5 million dollars, or 28.6 percent of pre-tax income,
last year. Income tax expense includes certain discrete items associated
with employee stock-based award activity in both periods.
