Tilly’s posts drop in Q3 sales, profit

US fashion retailer Tilly’s has reported a drop in sales and profitability in the third quarter of the year, but the results were still better than expected.

In the three months ended October 29, the company posted a 13.7 percent drop in net sales to 177.8 million dollars. On a comparable basis, net sales dropped 14.9 percent.

Sales from physical stores tumbled 14.4 percent to 141.5 million dollars, while e-commerce sales dropped 11.1 percent to 36.3 million dollars.

Net income slumped to 5.1 million dollars from 20.8 million dollars a year ago.

The company noted that the results were compared to last year’s record Q3 sales and EPS which were fueled by unprecedented pent-up consumer demand and the impact of stimulus payments.

“Our third quarter performance was better than we expected and we entered the fourth quarter with reduced inventory per square foot compared to last year,” Tilly’s CEO Ed Thomas told investors.

Full-year outlook

Thomas continued: “Although our November comparable net sales results were weaker than we expected, we saw an improved relative trend during the Black Friday weekend compared to earlier in the month.”

Total comparable net sales through November 29 fell 18.5 percent, while for Thanksgiving weekend, from Thursday through Cyber Monday, comparable net sales decreased by 13.4 percent.

Tilly’s said it expects Q4 sales to be in the range of 183 million dollars to 188 million dollars, provided that the quarter reverts to a “more traditional holiday cadence” after last year the company saw Q3 sales ahead of Q4 sales for the first time in its history.