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Tilly’s, Inc. Announces Fourth Quarter and Full Year Fiscal 2015 Results
Introduces First Quarter Fiscal 2016 Outlook
-
Fourth Quarter Net Sales Increased 4.1% to
$159 Million - Fourth Quarter Comp Store Sales Decreased 0.9%
-
Fourth Quarter EPS of
$0.10
“Our fourth quarter comparable store sales results were slightly better
than our outlook and we ended the quarter with clean and current
inventories," stated
Fiscal 2015 Fourth Quarter Results Overview
The following comparisons refer to operating results for the fourth
quarter of fiscal 2015 versus the fourth quarter of fiscal 2014 ended
-
Total net sales increased 4.1% to
$159 million from$153 million . - Comparable store sales, which include e-commerce sales, decreased 0.9%.
-
Gross profit increased 1.9% to
$50.0 million from$49.0 million . Gross margin, or gross profit as a percentage of net sales, decreased to 31.4% from 32.1%. The 70 basis point decrease in gross margin was primarily attributable to lower product margins as a result of increased markdowns. -
Operating income was
$9.5 million , or 6.0% of net sales, compared to$11.2 million , or 7.3% of net sales. The 130 basis point decrease in operating income was primarily attributable to lower product margins as noted above and increased marketing expenses. -
Income tax expense was
$6.6 million , or 69.6% of pre-tax income, compared to$4.1 million , or 36.6% of pre-tax income. This increase in income tax expense on lower pre-tax income was primarily attributable to a$2.6 million tax impact from stock option expirations, which resulted in the write-off of certain previously recognized deferred tax assets. -
Net income was
$2.9 million , or$0.10 per diluted share, compared to$7.1 million , or$0.25 per diluted share. Earnings per diluted share were negatively impacted by$0.11 due to the year over year tax rate difference.
Fiscal 2015 Full Year Results Overview
The following comparisons refer to operating results for the full year
of fiscal 2015 versus the full year of fiscal 2014 ended
-
Total net sales increased 6.3% to
$551 million from$518 million . - Comparable store sales, which include e-commerce sales, increased 1.2%.
-
Gross profit increased 7.5% to
$167 million from$156 million . Gross margin increased to 30.4% from 30.0%. This 40 basis point increase in gross margin was primarily due to improvement in distribution costs. -
Operating income was
$18.1 million , or 3.3% of net sales, compared to$23.2 million , or 4.5% of net sales. The 120 basis point decrease in operating income was primarily attributable to increases in marketing expenses, employee costs, and non-cash store asset impairments. -
Income tax expense was
$10.6 million , or 58.4% of pre-tax income, compared to$9.1 million , or 39.3% of pre-tax income. This increase in income tax expense on lower pre-tax income was primarily attributable to a$2.6 million tax impact from stock option expirations, which resulted in the write-off of certain previously recognized deferred tax assets. -
Net income was
$7.5 million , or$0.27 per diluted share, compared to$14.1 million , or$0.50 per diluted share. Earnings per share were negatively impacted by$0.12 due to the year over year tax rate difference.
Balance Sheet and Liquidity
As of
First Quarter 2016 Outlook
The Company expects first quarter comparable store sales to be in the
range of -3% to -6%, operating loss 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 leading 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 financial and
operating results, including but not limited to future comparable store
sales, future operating income, future net income, future earnings per
share, future gross, operating or product margins, anticipated tax rate,
future inventory levels, and market share and our business and strategy,
including but not limited to expected store openings and closings,
expansion of brands and exclusive relationships, development and growth
of our e-commerce 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 e-commerce 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 par value and per share data) (unaudited) |
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January 30, |
January 31, |
||||||||
2016 | 2015 | ||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 51,020 | $ | 49,789 | |||||
Marketable securities | 49,932 | 34,957 | |||||||
Receivables | 5,397 | 4,682 | |||||||
Merchandise inventories | 51,357 | 51,507 | |||||||
Prepaid expenses and other current assets | 12,968 | 12,349 | |||||||
Total current assets | 170,674 | 153,284 | |||||||
Property and equipment, net | 99,026 | 101,335 | |||||||
Other assets | 1,051 | 2,932 | |||||||
Total assets | $ | 270,751 | $ | 257,551 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 16,022 | $ | 23,109 | |||||
Accrued expenses | 18,901 | 12,325 | |||||||
Deferred revenue | 8,174 | 7,075 | |||||||
Accrued compensation and benefits | 5,751 | 5,911 | |||||||
Current portion of deferred rent | 6,106 | 6,070 | |||||||
Current portion of capital lease obligation | 858 | 806 | |||||||
Total current liabilities | 55,812 | 55,296 | |||||||
Long-term portion of deferred rent | 40,891 | 41,875 | |||||||
Long-term portion of capital lease obligation | 835 | 1,694 | |||||||
Total long-term liabilities | 41,726 | 43,569 | |||||||
Total liabilities | 97,538 | 98,865 | |||||||
Stockholders’ equity: | |||||||||
Common stock (Class A), $0.001 par value; January 30, 2016 - 100,000 shares authorized, 12,305 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; January 30, 2016 - 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; January 30, 2016 and January 31, 2015 - 10,000 shares authorized, no shares issued or outstanding | — | — | |||||||
Additional paid-in capital | 133,550 | 126,565 | |||||||
Retained earnings | 39,613 | 32,072 | |||||||
Accumulated other comprehensive income | 22 | 21 | |||||||
Total stockholders’ equity | 173,213 | 158,686 | |||||||
Total liabilities and stockholders’ equity | $ | 270,751 | $ | 257,551 | |||||
Tilly’s, Inc. Consolidated Statements of Income (In thousands, except per share data) (unaudited) |
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Thirteen Weeks Ended | Fifty-Two Weeks Ended | |||||||||||||||||||
January 30, 2016 |
January 31, 2015 |
January 30, 2016 |
January 31, 2015 |
|||||||||||||||||
Net sales | $ | 159,086 | $ | 152,817 | $ | 550,991 | $ | 518,294 | ||||||||||||
Cost of goods sold (includes buying, distribution, and occupancy costs) | 109,129 | 103,815 | 383,745 | 362,762 | ||||||||||||||||
Gross profit | 49,957 | 49,002 | 167,246 | 155,532 | ||||||||||||||||
Selling, general and administrative expenses | 40,481 | 37,796 | 149,150 | 132,343 | ||||||||||||||||
Operating income | 9,476 | 11,206 | 18,096 | 23,189 | ||||||||||||||||
Other income (expense), net | 12 | 4 | 52 | (14 | ) | |||||||||||||||
Income before income taxes | 9,488 | 11,210 | 18,148 | 23,175 | ||||||||||||||||
Income tax expense | 6,604 | 4,105 | 10,607 | 9,100 | ||||||||||||||||
Net income | $ | 2,884 | $ | 7,105 | $ | 7,541 | $ | 14,075 | ||||||||||||
Basic earnings per share of Class A and Class B common stock | $ | 0.10 | $ | 0.25 | $ | 0.27 | $ | 0.50 | ||||||||||||
Diluted earnings per share of Class A and Class B common stock | $ | 0.10 | $ | 0.25 | $ | 0.27 | $ | 0.50 | ||||||||||||
Weighted average basic shares outstanding | 28,415 | 28,031 | 28,332 | 28,013 | ||||||||||||||||
Weighted average diluted shares outstanding | 28,415 | 28,113 | 28,402 | 28,078 | ||||||||||||||||
Tilly’s, Inc. Consolidated Statements of Cash Flows (In thousands) (unaudited) |
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Fiscal Year Ended | |||||||||||||||
January 30, 2016 |
January 31, 2015 |
February 1, 2014 |
|||||||||||||
Cash flows from operating activities | |||||||||||||||
Net income | $ | 7,541 | $ | 14,075 | $ | 18,137 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization | 22,808 | 21,237 | 19,367 | ||||||||||||
Stock-based compensation expense | 3,926 | 3,499 | 3,106 | ||||||||||||
Impairment of assets | 2,593 | 1,007 | 1,840 | ||||||||||||
Loss on disposal of assets | 304 | 118 | 140 | ||||||||||||
Gain on sales and maturities of marketable securities | (100 | ) | (116 | ) | (176 | ) | |||||||||
Deferred income taxes |
1,554 |
|
1,150 |
|
304 | ||||||||||
Excess tax benefit from stock-based compensation | (95 | ) | (22 | ) | (157 | ) | |||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Receivables | (715 | ) | 3,863 | (2,611 | ) | ||||||||||
Merchandise inventories | 150 | (5,241 | ) | 329 | |||||||||||
Prepaid expenses and other assets |
(293 |
) |
(255 |
) |
(1,861 | ) | |||||||||
Accounts payable | (6,993 | ) | 3,720 | 1,554 | |||||||||||
Accrued expenses | 6,179 | 3,662 | (1,796 | ) | |||||||||||
Accrued compensation and benefits | (160 | ) | 936 | (1,119 | ) | ||||||||||
Deferred rent | (948 | ) | (206 | ) | 5,976 | ||||||||||
Deferred revenue | 1,099 | 861 | 761 | ||||||||||||
Net cash provided by operating activities | 36,850 | 48,288 | 43,794 | ||||||||||||
Cash flows from investing activities | |||||||||||||||
Purchase of property and equipment | (23,100 | ) | (23,636 | ) | (42,701 | ) | |||||||||
Proceeds from sale of property and equipment | 7 | 41 | 79 | ||||||||||||
Purchases of marketable securities | (74,873 | ) | (59,884 | ) | (44,908 | ) | |||||||||
Maturities of marketable securities | 60,000 | 60,000 | 50,000 | ||||||||||||
Net cash used in investing activities | (37,966 | ) | (23,479 | ) | (37,530 | ) | |||||||||
Cash flows from financing activities | |||||||||||||||
Proceeds from exercise of stock options | 3,094 | 304 | 2,389 | ||||||||||||
Payment of capital lease obligation | (807 | ) | (758 | ) | (712 | ) | |||||||||
Taxes paid in lieu of shares issued for stock-based compensation | (35 | ) | — | — | |||||||||||
Excess tax benefit from stock-based compensation | 95 | 22 | 157 | ||||||||||||
Net cash provided by (used in) financing activities | 2,347 | (432 | ) | 1,834 | |||||||||||
Change in cash and cash equivalents | 1,231 | 24,377 | 8,098 | ||||||||||||
Cash and cash equivalents, beginning of period | 49,789 | 25,412 | 17,314 | ||||||||||||
Cash and cash equivalents, end of period | $ | 51,020 | $ | 49,789 | $ | 25,412 | |||||||||
Tilly's, Inc. Store Count and Square Footage |
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Total Gross Square | |||||||||||||||||||
Stores Open at | Stores Opened | Stores Closed | Stores Open | Footage End of | |||||||||||||||
Beg of | During the | During the | at End of | Quarter (in | |||||||||||||||
Quarter | Quarter | Quarter | Quarter | thousands) | |||||||||||||||
2014 Q1 | 195 | 3 | — | 198 | 1,535 | ||||||||||||||
2014 Q2 | 198 | 6 | 1 | 203 | 1,563 | ||||||||||||||
2014 Q3 | 203 | 5 | 1 | 207 | 1,589 | ||||||||||||||
2014 Q4 | 207 | 5 | — | 212 | 1,622 | ||||||||||||||
2015 Q1 | 212 | 2 | 1 | 213 | 1,630 | ||||||||||||||
2015 Q2 | 213 | 3 | — | 216 | 1,655 | ||||||||||||||
2015 Q3 | 216 | 4 | — | 220 | 1,681 | ||||||||||||||
2015 Q4 | 220 | 6 | 2 | 224 | 1,704 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20160316006358/en/
Source: Tilly’s, Inc.
Investor Relations:
Tilly’s, Inc.
Christopher
M. Lal, 949-609-5599, ext. 17000
VP General Counsel
irelations@tillys.com