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Tilly’s, Inc. Announces Second Quarter Fiscal 2015 Results
Introduces Third Quarter Fiscal 2015 Outlook
-
Second Quarter Net Sales of
$130 million ; Comp Store Sales Increased 0.5% -
Second Quarter EPS of
$0.02
“Second quarter results were in line with our outlook, with sales growth
driven by new store openings over the past twelve months and a strong
e-commerce business. We maintained our diligent inventory management,
resulting in continued healthy product margins, and began the third
quarter with inventory well positioned for the back-to-school season.
Our merchandise offering is resonating well with our customers and we
are encouraged by the solid start to the third quarter,” commented
Second Quarter Results Overview
The following comparisons refer to operating results for the second
quarter of fiscal 2015 versus the second quarter of fiscal 2014 ended
-
Total net sales were
$130 million compared to$123 million , an increase of$7 million or 6%. - Comparable store sales, which include e-commerce sales, increased 0.5%.
-
Gross profit was
$36.6 million compared to$34.7 million , an increase of$1.9 million or 6%. Gross margin, or gross profit as a percentage of net sales, was 28.1% compared to 28.2%. This slight decrease was primarily due to a 40 basis point decline in product margins, partially offset by lower buying, distribution and occupancy costs as a percentage of net sales. -
Operating income was
$1.1 million compared to$2.3 million and included an aggregate of$0.9 million in non-cash store asset impairment charges and an accrual for a potential legal settlement. -
Net income was
$0.6 million , or$0.02 per diluted share, compared to$1.3 million , or$0.05 per diluted share. Our effective tax rate was 50% compared to 46%, and was higher primarily due to a tax settlement related to a prior tax year.
First Half Results Overview
The following comparisons refer to operating results for the first half
of fiscal 2015 versus the first half of fiscal 2014 ended
-
Total net sales were
$250 million compared to$234 million , an increase of$16 million or 7%. - Comparable store sales, which include e-commerce sales, increased 1.2%.
-
Gross profit was
$72.6 million compared to$66.0 million , an increase of$6.6 million or 10%. Gross margin was 29.0% compared to 28.2%. This 80 basis point increase was primarily due to lower buying, distribution and occupancy costs as a percentage of net sales and a 20 basis point increase in product margins. -
Operating income was
$3.2 million compared to$3.4 million and included an aggregate of$0.9 million in non-cash store asset impairment charges and an accrual for a potential legal settlement. -
Net income was
$1.8 million , or$0.06 per diluted share, compared to$1.9 million , or$0.07 per diluted share.
Balance Sheet and Liquidity
As of
Third Quarter 2015 Outlook
The Company expects third quarter comparable store sales growth to be
positive low single digits and net income per diluted share to be in the
range of
Conference Call Information
A conference call to discuss the financial results is scheduled for
today,
A telephone replay of the call will be available until
About Tillys
Tillys is a fast-growing destination specialty retailer of
Forward Looking Statements
Certain statements in this press release and oral statements made from
time to time by our representatives are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995. In particular, statements regarding our future financials and
operating results, including but not limited to future comparable store
sales, future net income, future earnings per share, future gross,
operating or product margins, anticipated tax rate, and market share and
our business and strategy, including but not limited to store expansion,
expansion of brands and exclusive relationships, development and growth
of our ecommerce platform and business, promotional strategy, and any
other statements about our future 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, 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 ecommerce business, effectively manage our inventory
and costs, effectively compete with other retailers, enhance awareness
of our brand and brand image, general consumer spending patterns and
levels, the effect of weather, 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 per par value share data) (Unaudited) |
||||||||
August 1,
2015 |
January 31,
2015 |
|||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 51,725 | $ | 49,789 | ||||
Marketable securities | 24,991 | 34,957 | ||||||
Receivables | 11,384 | 4,682 | ||||||
Merchandise inventories | 79,923 | 51,507 | ||||||
Prepaid expenses and other current assets | 13,222 | 12,349 | ||||||
Total current assets | 181,245 | 153,284 | ||||||
Property and equipment, net | 101,214 | 101,335 | ||||||
Other assets | 3,088 | 2,932 | ||||||
Total assets | $ | 285,547 | $ | 257,551 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 39,076 | $ | 23,109 | ||||
Accrued expenses | 18,527 | 12,325 | ||||||
Deferred revenue | 5,306 | 7,075 | ||||||
Accrued compensation and benefits | 6,322 | 5,911 | ||||||
Current portion of deferred rent | 5,477 | 6,070 | ||||||
Current portion of capital lease obligation | 832 | 806 | ||||||
Total current liabilities | 75,540 | 55,296 | ||||||
Long-term portion of deferred rent | 42,821 | 41,875 | ||||||
Long-term portion of capital lease obligation` | 1,271 | 1,694 | ||||||
Total long-term liabilities | 44,092 | 43,569 | ||||||
Total liabilities | 119,632 | 98,865 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity: | ||||||||
Common stock (Class A), $0.001 par value; August 1, 2015 - 100,000 shares authorized, 12,297 | ||||||||
shares issued and outstanding; January 31, 2015 - 100,000 shares authorized, 11,546 shares issued and | ||||||||
outstanding | 12 | 11 | ||||||
Common stock (Class B), $0.001 par value; August 1, 2015 - 35,000 shares authorized, 16,169 shares | ||||||||
issued and outstanding; January 31, 2015 - 35,000 shares authorized, 16,544 shares issued and | ||||||||
outstanding | 16 | 17 | ||||||
Preferred stock, $0.001 par value; August 1, 2015 and January 31, 2015 - 10,000 shares authorized, | ||||||||
no shares issued or outstanding | - | - | ||||||
Additional paid-in capital | 131,960 | 126,565 | ||||||
Retained earnings | 33,914 | 32,072 | ||||||
Accumulated other comprehensive income | 13 | 21 | ||||||
Total stockholders' equity | 165,915 | 158,686 | ||||||
Total liabilities and stockholders' equity | $ | 285,547 | $ | 257,551 | ||||
Tilly’s, Inc. Consolidated Statements of Income (In thousands, except per share data) (Unaudited) |
|||||||||||||||||
Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||||||
August 1,
2015 |
August 2,
2014 |
August 1,
2015 |
August 2,
2014 |
||||||||||||||
Net sales | $ | 130,023 | $ | 123,060 | $ | 250,213 | $ | 234,194 | |||||||||
Cost of goods sold (includes buying, distribution, and occupancy costs) | 93,427 | 88,405 | 177,565 | 168,212 | |||||||||||||
Gross profit | 36,596 | 34,655 | 72,648 | 65,982 | |||||||||||||
Selling, general and administrative expenses | 35,492 | 32,326 | 69,415 | 62,576 | |||||||||||||
Operating income | 1,104 | 2,329 | 3,233 | 3,406 | |||||||||||||
Other income, net | 10 | 4 | 18 | 3 | |||||||||||||
Income before income taxes | 1,114 | 2,333 | 3,251 | 3,409 | |||||||||||||
Income tax expense | 554 | 1,067 | 1,409 | 1,552 | |||||||||||||
Net income | $ | 560 | $ | 1,266 | $ | 1,842 | $ | 1,857 | |||||||||
Basic earnings per share of Class A and Class B common stock | $ | 0.02 | $ | 0.05 | $ | 0.07 | $ | 0.07 | |||||||||
Diluted earnings per share of Class A and Class B common stock | $ | 0.02 | $ | 0.05 | $ | 0.06 | $ | 0.07 | |||||||||
Weighted average basic shares outstanding | 28,333 | 28,014 | 28,253 | 27,999 | |||||||||||||
Weighted average diluted shares outstanding | 28,426 | 28,049 | 28,403 | 28,100 | |||||||||||||
Tilly’s, Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited) |
||||||||||
Twenty-Six Weeks Ended | ||||||||||
August 1,
2015 |
August 2,
2014 |
|||||||||
Cash flows from operating activities | ||||||||||
Net income | $ | 1,842 | $ | 1,857 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
Depreciation and amortization | 11,260 | 10,182 | ||||||||
Stock-based compensation expense | 2,301 | 1,903 | ||||||||
Loss on disposal of assets | 67 | 39 | ||||||||
Impairment of assets | 367 | - | ||||||||
Gain on sales and maturities of marketable securities | (65 | ) | (77 | ) | ||||||
Deferred income taxes | 147 | 334 | ||||||||
Excess tax benefit from stock-based compensation | (95 | ) | - | |||||||
Changes in operating assets and liabilities: | ||||||||||
Receivables | (6,702 | ) | (1,750 | ) | ||||||
Merchandise inventories | (28,416 | ) | (24,121 | ) | ||||||
Prepaid expenses and other assets | (1,171 | ) | (1,268 | ) | ||||||
Accounts payable | 15,928 | 18,397 | ||||||||
Accrued expenses | 6,149 | 6,906 | ||||||||
Accrued compensation and benefits | 411 | 782 | ||||||||
Deferred rent | 353 | (4 | ) | |||||||
Deferred revenue | (1,769 | ) | (1,437 | ) | ||||||
Net cash provided by operating activities | 607 | 11,743 | ||||||||
Cash flows from investing activities | ||||||||||
Purchase of property and equipment | (11,481 | ) | (14,587 | ) | ||||||
Proceeds from sale of property and equipment | - | 9 | ||||||||
Purchases of marketable securities | (19,982 | ) | (24,961 | ) | ||||||
Maturities of marketable securities | 30,000 | 35,000 | ||||||||
Net cash used in investing activities | (1,463 | ) | (4,539 | ) | ||||||
Cash flows from financing activities | ||||||||||
Proceeds from exercise of stock options | 3,094 | 165 | ||||||||
Payment of capital lease obligation | (397 | ) | (373 | ) | ||||||
Excess tax benefit from stock-based compensation | 95 | - | ||||||||
Net cash provided by (used in) financing activities | 2,792 | (208 | ) | |||||||
Change in cash and cash equivalents | 1,936 | 6,996 | ||||||||
Cash and cash equivalents, beginning of period | 49,789 | 25,412 | ||||||||
Cash and cash equivalents, end of period | $ | 51,725 | $ | 32,408 | ||||||
Tilly's, Inc. | |||||||||||||||
Store Count and Square Footage | |||||||||||||||
Total Gross | |||||||||||||||
Stores | Stores | Stores | Stores | Square Footage | |||||||||||
Open at | Opened | Closed | Open at | End of Qtr | |||||||||||
Beg of Qtr | During Qtr | During Qtr | End of Qtr | (in thousands) | |||||||||||
2014 Q1 | 195 | 3 | 0 | 198 | 1,535 | ||||||||||
2014 Q2 | 198 | 6 | 1 | 203 | 1,563 | ||||||||||
2014 Q3 | 203 | 5 | 1 | 207 | 1,589 | ||||||||||
2014 Q4 | 207 | 5 | 0 | 212 | 1,622 | ||||||||||
2015 Q1 | 212 | 2 | 1 | 213 | 1,630 | ||||||||||
2015 Q2 | 213 | 3 | 0 | 216 | 1,655 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20150826005874/en/
Source: Tilly’s, Inc.
Investor Relations:
ICR, Inc.
Anne
Rakunas/Joseph Teklits, 310-954-1113
anne.rakunas@icrinc.com