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Tilly’s Q1 sales decline, expects the trend to continue in Q2

Tilly’s Q1 sales decline, expects the trend to continue in Q2

Tilly’s, Inc. reported net sales of 145.8 million dollars in the first quarter, down 17.4 million dollars or 10.7%. Total comparable net sales, which include both physical stores and online purchases, fell by 13%.

As a result of rising inflation and energy expenses, the business’s second quarter total comparable net sales through May 30, 2022, including both physical stores and e-commerce, declined by 17% compared to the corresponding period in 2021, according to the company.

“Our first-quarter operating results were in line with our expectations and an improvement over our pre-pandemic performance in the first quarter of fiscal 2019,” said Ed Thomas, the company’s president and CEO.

Highlights from Tilly’s first-quarter financial results Physical store net sales were 117.5 million dollars, down 10.2 million dollars or 8% from comparable store net sales, which were down 10.8 percent. The company had 241 total stores at the end of the first quarter, compared to 238 total locations at the same time the previous year.

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E-commerce net sales were 28.3 million dollars, down 7.2 million dollars or 20.3 percent. E-commerce net sales were for 19.4 percent of overall net sales, down from 21.7 percent the previous year.

Total net sales climbed by 15.5 million dollars, or 11.9 percent, compared to the pre-pandemic first quarter of fiscal 2019, and total comparable net sales increased by 5.8 percent, with a modest dip from physical stores of 0.7 percent and a 42.3 percent increase from e-commerce.

Last year’s gross profit was 54.8 million dollars, or 33.6 percent of net sales, compared to 43.8 million dollars, or 30.1 percent of net sales this year.

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Last year, operating income was 1.1 million dollars, or 0.8 percent of net sales, compared to 14.9 million dollars, or 9.1 percent of total sales. In the pre-pandemic first quarter of fiscal 2019, operating income was 146,000 dollars or 0.1 percent of net sales.

Last year’s net income was 11 million dollars, or 36 cents per diluted share, whereas this year was 0.8 million dollars or 3 cents per diluted share. In the first quarter of fiscal 2019, before the pandemic, net income was 0.7 million dollars or 2 cents per diluted share.

Inflation and energy costs are expected to have an impact on Q2 sales, according to Tilly’s. Due to the historically high level of full-price selling during fiscal 2021, the business presently projects that its second-quarter net sales will be in the range of 170 million to 175 million dollars, with product margins roughly 200-250 basis points lower than last year.

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For the second quarter of fiscal 2022, the business anticipates operating income of between $6 million to 8.5 million dollars and earnings per diluted share of 14 cents to 20 cents with weighted average diluted shares of approximately 30.2 million. In the second quarter of fiscal 2021, net sales were 202 million dollars, with earnings per diluted share of 66 cents, more than doubling the previous corporate record for second-quarter earnings per share.

At the end of the second quarter, the firm plans to have 242 total stores open, down from 244 total stores at the end of fiscal 2021’s second quarter.

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