Press Releases
« Back
Tilly's, Inc. Announces Fiscal 2020 Fourth Quarter and Full Year Results
"Finishing such a challenging year with a positive fourth quarter comp, a significantly stronger e-com business, and improved earnings per share compared to last year's fourth quarter, along with a strong, debt-free balance sheet was a remarkable accomplishment," commented
Fiscal 2020 Fourth Quarter Results Overview
The following comparisons refer to operating results for the fourth quarter of fiscal 2020 versus the fourth quarter of fiscal 2019 ended
-
Total net sales were
$177.9 million , an increase of$5.4 million or 3.2%, compared to$172.5 million last year. Total comparable net sales, including both physical stores and e-commerce, increased by 2.5% compared to last year.-
Net sales from physical stores were
$122.5 million , a decrease of$16.7 million or 12.0%, compared to$139.2 million last year. Comparable net sales from physical stores decreased by 12.3%. Store traffic decreased by 25% compared to last year's fourth quarter, partially offset by increases in conversion rate and average transaction value. Net sales from stores represented 68.9% of total net sales compared to 80.7% of total net sales last year. The Company ended the fourth quarter of fiscal 2020 with 238 total stores, substantially all of which were open to the public but subject to government restrictions on customer traffic and with reduced operating hours as a result of the COVID-19 pandemic. This compares to 240 total stores, all of which were open to the public without restrictions, last year. -
Net sales from e-commerce were
$55.4 million , an increase of$22.1 million or 66.5% compared to approximately$33.3 million last year. E-commerce net sales represented 31.1% of total net sales compared to 19.3% of total net sales last year.
-
Net sales from physical stores were
-
Gross profit was
$58.3 million , an increase of$6.1 million compared to$52.1 million last year. Gross margin, or gross profit as a percentage of net sales, was 32.7%, an improvement of 250 basis points compared to 30.2% last year. Product margins improved by 210 basis points as a percentage of net sales primarily due to reduced total markdowns. Total buying, distribution and occupancy costs improved by 40 basis points as a percentage of net sales. Occupancy costs improved by 170 basis points as a percentage of net sales and by$2.3 million in the aggregate, primarily due to favorable lease negotiations and a decrease in depreciation compared to last year. Distribution costs deleveraged by 140 basis points as a percentage of net sales and increased by$2.8 million , primarily due to an increase in e-commerce shipping charges of$3.1 million associated with the significant increase in e-commerce orders. Buying costs improved by 10 basis points. -
Selling, general and administrative expenses ("SG&A") were
$44.1 million , an increase of$0.5 million compared to$43.6 million last year. SG&A as a percentage of net sales was 24.8%, an improvement of 50 basis points compared to 25.3% last year. Total e-commerce marketing and fulfillment expenses increased by$4.0 million associated with significant increase in e-commerce activity compared to last year. This increase was largely offset by reduced store payroll and related benefits expenses of$2.5 million resulting from the reduced operating hours associated with the COVID-19 pandemic and a reduction in print advertising costs of$1.0 million compared to last year. -
Operating income was
$14.1 million , or 7.9% of net sales, compared to$8.5 million , or 4.9% of net sales, last year. The$5.6 million increase in operating income was primarily due to the combined impact of the factors noted above. -
Other expense was
$0.1 million compared to other income of$0.6 million last year, primarily due to earning lower interest rates on our investments this year and approximately$0.2 million in costs associated with our new ABL credit facility. -
Income tax expense was
$5.1 million , or 36.6% of pre-tax income, compared to$2.8 million , or 30.9% of pre-tax income, last year. -
Net income was
$8.9 million , or$0.29 per diluted share, compared to$6.3 million , or$0.21 per diluted share, last year.
Fiscal 2020 Full Year Results Overview
The following comparisons refer to operating results for the fifty-two weeks of fiscal 2020 versus the fifty-two weeks of fiscal 2019:
-
Total net sales were
$531.3 million , a decrease of$88.0 million or 14.2%, compared to$619.3 million last year primarily as a result of the various periods of store closures, reduced store operating hours, and restrictions on customer traffic into physical stores resulting from the COVID-19 pandemic.-
Net sales from physical stores were
$357.9 million , a decrease of$162.9 million or 31.3%, compared to$520.8 million last year. In terms of total available store operating days in fiscal 2020, physical stores were open for 50% of the first quarter, 65% of the second quarter, 94% of the third quarter, and substantially all of the fourth quarter. Net sales from stores represented 67.4% of total net sales compared to 84.1% of total net sales last year. -
Net sales from e-commerce were
$173.4 million , an increase of$74.9 million or 76.2%, compared to$98.5 million last year. E-commerce net sales represented 32.6% of total net sales compared to 15.9% last year.
-
Net sales from physical stores were
-
Gross profit was
$142.2 million , a decrease of$44.5 million or 23.8%, compared to$186.7 million last year. Gross margin was 26.8%, a decrease of 330 basis points as a percentage of net sales, compared to 30.1% last year. Product margins improved 60 basis points as a percentage of net sales primarily due to reduced total markdowns. Total buying, distribution and occupancy costs improved by 400 basis points as a percentage of net sales. Occupancy costs deleveraged 200 basis points as a percentage of net sales, despite being reduced by$4.1 million and having two fewer stores compared to last year, against lower total net sales. Distribution costs deleveraged 190 basis points as a percentage of net sales primarily due to an increase in e-commerce shipping charges of$8.5 million resulting from a greater volume of e-commerce orders. Buying costs deleveraged 10 basis points as a percentage of net sales. -
SG&A expenses were
$145.2 million , or 27.3% of net sales, compared to$158.3 million , or 25.6% of net sales, last year. The$13.0 million decrease in SG&A was primarily due to reduced store payroll and related benefits expenses of$18.9 million resulting from the various periods of pandemic-related store closures this year and reduced staffing levels upon reopening of stores and a$2.3 million decrease in print advertising costs. Several other expenses were also reduced to a much smaller degree. These expense reductions were partially offset by higher aggregate e-commerce marketing and fulfillment expenses of approximately$11.5 million associated with significant increase in e-commerce activity compared to last year. -
Operating loss was
$(3.0) million , or (0.6)% of net sales, compared to operating income of$28.5 million , or 4.6% of net sales, last year. The decrease in operating results was primarily attributable to the impacts of the COVID-19 pandemic on the Company's business as noted above. -
Other income was
$0.6 million , a decrease of$2.3 million compared to$2.9 million last year, primarily due to earning lower interest rates on our investments and incurring approximately$0.2 million of costs in this year's fourth quarter associated with our new ABL credit facility. -
Income tax benefit was
$1.3 million , or 53.5% of pre-tax loss, compared to income tax expense of$8.7 million , or 27.9% of pre-tax income, last year. -
Net loss was
$(1.1) million , or$(0.04) per basic share, compared to net income of$22.6 million , or$0.76 per diluted share, last year.
Balance Sheet and Liquidity
As of
Fiscal 2021 First Quarter Outlook
On
The Company is providing the following updates regarding its fiscal 2021 first quarter business through
-
The Company's total comparable net sales, including both physical stores and e-commerce, were
$45.3 million , a decrease of$2.2 million or 4.6%, compared to$47.5 million last year. Total comparable net sales decreased inFebruary 2021 , but have been positive thus far inMarch 2021 . -
Comparable net sales from physical stores were
$34.5 million , a decrease of$5.3 million or 13.3% compared to$39.8 million last year. Store traffic has decreased by 28% compared to the corresponding period of last year, partially offset by increases in conversion rate and average transaction value. -
Net sales from e-commerce were
$10.7 million , an increase of$3.1 million or 40.6%, compared to$7.6 million last year. -
As of
March 9, 2021 , the Company had$138.7 million of cash and marketable securities, including an aggregate of$2.1 million of withheld store lease payments from last year's store shutdown period, and no debt outstanding. This compares to$115.5 million of cash and marketable securities with no withheld store lease payments and no debt outstanding for the comparable fiscal date last year. InFebruary 2020 , the Company paid aggregate cash dividends of$29.7 million , or$1.00 per share, to stockholders, which was not repeated this year due to certain temporary restrictions on such payments within the Company's asset-backed credit facility which expire inNovember 2021 . Based on all currently available information, the Company believes the combination of its cash, marketable securities, cash flows from operations and credit facility availability will be more than sufficient to support its operations for at least the next twelve months.
Conference Call Information
A conference call to discuss these financial results is scheduled for today,
A telephone replay of the call will be available through
About Tillys
Tillys is a leading, destination specialty retailer of casual apparel, footwear and accessories 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
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 the overall effect of the novel coronavirus (COVID-19) pandemic, including its impacts on us, our operations, or our future financial condition or operating results, the actions taken or to be taken in response to the COVID-19 pandemic, and the impacts thereof on us, our operations, or our future financial condition or operating results, expectations regarding customer traffic and sales activities once stores have reopened, the effects of guidance from local, state and federal governments and health organizations on our future business operations, the possibility of repaying withheld store rents, 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 effects of the COVID-19 pandemic (or other weather, epidemics, pandemics, or other public health issues) on our business and operations, and our ability to respond thereto (including any surges in the number of cases related 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, realize anticipated, enhance awareness of our brand and brand image, general consumer spending patterns and levels, 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
Tilly’s, Inc. Consolidated Balance Sheets (In thousands, except par value) (unaudited) |
|||||||
|
|
|
|
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
76,184 |
|
|
$ |
70,137 |
|
Marketable securities |
64,955 |
|
|
69,780 |
|
||
Receivables |
8,724 |
|
|
7,485 |
|
||
Merchandise inventories |
55,698 |
|
|
56,901 |
|
||
Prepaid expenses and other current assets |
6,595 |
|
|
4,561 |
|
||
Total current assets |
212,156 |
|
|
208,864 |
|
||
Operating lease assets |
227,881 |
|
|
263,649 |
|
||
Property and equipment, net |
52,639 |
|
|
66,176 |
|
||
Other assets |
12,797 |
|
|
7,951 |
|
||
Total assets |
$ |
505,473 |
|
|
$ |
546,640 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
24,983 |
|
|
$ |
20,562 |
|
Accrued expenses |
30,682 |
|
|
20,755 |
|
||
Deferred revenue |
13,492 |
|
|
11,761 |
|
||
Accrued compensation and benefits |
9,899 |
|
|
7,190 |
|
||
Dividends payable |
— |
|
|
29,677 |
|
||
Current portion of operating lease liabilities |
54,503 |
|
|
55,321 |
|
||
Total current liabilities |
133,559 |
|
|
145,266 |
|
||
Noncurrent operating lease liabilities |
211,292 |
|
|
240,755 |
|
||
Other |
— |
|
|
718 |
|
||
Total liabilities |
344,851 |
|
|
386,739 |
|
||
Stockholders’ equity: |
|
|
|
||||
Common stock (Class A) |
22 |
|
|
22 |
|
||
Common stock (Class B) |
8 |
|
|
8 |
|
||
Preferred stock |
— |
|
|
— |
|
||
Additional paid-in capital |
155,437 |
|
|
153,377 |
|
||
Retained earnings |
5,135 |
|
|
6,280 |
|
||
Accumulated other comprehensive income |
20 |
|
|
214 |
|
||
Total stockholders’ equity |
160,622 |
|
|
159,901 |
|
||
Total liabilities and stockholders’ equity |
$ |
505,473 |
|
|
$ |
546,640 |
|
Tilly’s, Inc. Consolidated Statements of Income (Loss) (In thousands, except per share data) (unaudited) |
|||||||||||||||
|
Thirteen Weeks Ended |
|
Fifty-Two Weeks Ended |
||||||||||||
|
|
|
|
|
|
|
|
||||||||
Net sales |
$ |
177,920 |
|
|
$ |
172,479 |
|
|
$ |
531,329 |
|
|
$ |
619,300 |
|
Cost of goods sold (includes buying, distribution, and occupancy costs) |
119,658 |
|
|
120,345 |
|
|
389,139 |
|
|
432,592 |
|
||||
Gross profit |
58,262 |
|
|
52,134 |
|
|
142,190 |
|
|
186,708 |
|
||||
Selling, general and administrative expenses |
44,148 |
|
|
43,639 |
|
|
145,230 |
|
|
158,253 |
|
||||
Operating income (loss) |
14,114 |
|
|
8,495 |
|
|
(3,040 |
) |
|
28,455 |
|
||||
Other (expense) income, net |
(111 |
) |
|
589 |
|
|
581 |
|
|
2,901 |
|
||||
Income (loss) before income taxes |
14,003 |
|
|
9,084 |
|
|
(2,459 |
) |
|
31,356 |
|
||||
Income tax expense (benefit) |
5,132 |
|
|
2,811 |
|
|
(1,314 |
) |
|
8,734 |
|
||||
Net income (loss) |
$ |
8,871 |
|
|
$ |
6,273 |
|
|
$ |
(1,145 |
) |
|
$ |
22,622 |
|
Basic income (loss) per share of Class A and Class B common stock |
$ |
0.30 |
|
|
$ |
0.21 |
|
|
$ |
(0.04 |
) |
|
$ |
0.77 |
|
Diluted income (loss) per share of Class A and Class B common stock |
$ |
0.29 |
|
|
$ |
0.21 |
|
|
$ |
(0.04 |
) |
|
$ |
0.76 |
|
Weighted average basic shares outstanding |
29,711 |
|
|
29,628 |
|
|
29,697 |
|
|
29,533 |
|
||||
Weighted average diluted shares outstanding |
30,115 |
|
|
29,926 |
|
|
29,697 |
|
|
29,788 |
|
Tilly’s, Inc. Consolidated Statements of Cash Flows (In thousands) (unaudited) |
|||||||
|
Fifty-Two Weeks Ended |
||||||
|
|
|
|
||||
Cash flows from operating activities |
|
|
|
||||
Net (loss) income |
$ |
(1,145 |
) |
|
$ |
22,622 |
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
19,055 |
|
|
20,948 |
|
||
Stock-based compensation expense |
2,036 |
|
|
2,136 |
|
||
Impairment of long-lived assets |
955 |
|
|
282 |
|
||
Loss on disposal of assets |
87 |
|
|
908 |
|
||
Gain on sales and maturities of marketable securities |
(714 |
) |
|
(1,660 |
) |
||
Deferred income taxes |
(4,949 |
) |
|
(5,720 |
) |
||
Changes in operating assets and liabilities: |
|
|
|
||||
Receivables |
96 |
|
|
3,204 |
|
||
Merchandise inventories |
1,203 |
|
|
(1,092 |
) |
||
Prepaid expenses and other current assets |
(1,722 |
) |
|
557 |
|
||
Accounts payable |
5,020 |
|
|
(4,227 |
) |
||
Accrued expenses |
10,600 |
|
|
1,369 |
|
||
Accrued compensation and benefits |
2,709 |
|
|
(1,740 |
) |
||
Operating lease liabilities |
3,935 |
|
|
(2,541 |
) |
||
Deferred revenue |
1,731 |
|
|
1,388 |
|
||
Net cash provided by operating activities |
38,897 |
|
|
36,434 |
|
||
Cash flows from investing activities |
|
|
|
||||
Purchases of property and equipment |
(8,471 |
) |
|
(14,299 |
) |
||
Purchases of marketable securities |
(80,896 |
) |
|
(126,526 |
) |
||
Proceeds from marketable securities |
86,170 |
|
|
134,316 |
|
||
Net cash used in investing activities |
(3,197 |
) |
|
(6,509 |
) |
||
Cash flows from financing activities |
|
|
|
||||
Proceeds from line of credit |
23,675 |
|
|
— |
|
||
Repayment of line of credit |
(23,675 |
) |
|
— |
|
||
Dividends paid |
(29,677 |
) |
|
(29,453 |
) |
||
Proceeds from exercise of stock options |
24 |
|
|
1,590 |
|
||
Taxes paid in lieu of shares issued for stock-based compensation |
— |
|
|
(85 |
) |
||
Net cash used in financing activities |
(29,653 |
) |
|
(27,948 |
) |
||
Change in cash and cash equivalents |
6,047 |
|
|
1,977 |
|
||
Cash and cash equivalents, beginning of period |
70,137 |
|
|
68,160 |
|
||
Cash and cash equivalents, end of period |
$ |
76,184 |
|
|
$ |
70,137 |
|
Store Count and Square Footage |
|||||||||
|
Store
|
|
New Stores
|
|
Stores
|
|
Store Count at
|
|
Total Gross
|
2020 Q1 |
240 |
|
— |
|
1 |
|
239 |
|
1,768 |
2020 Q2 |
239 |
|
— |
|
1 |
|
238 |
|
1,760 |
2020 Q3 |
238 |
|
1 |
|
1 |
|
238 |
|
1,753 |
2020 Q4 |
238 |
|
1 |
|
1 |
|
238 |
|
1,751 |
Note: The store counts noted above do not reflect the impact of stores temporarily closed as a result of the COVID-19 pandemic.
View source version on businesswire.com: https://www.businesswire.com/news/home/20210311005893/en/
Investor Relations Contact:
(949) 609-5599, ext. 17000
irelations@tillys.com
Source: Tilly’s, Inc.