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

Tilly’s, Inc. first quarter net sales were 145.8 million dollars, a decrease of 17.4 million dollars or 10.7 percent. Total comparable net sales, including both physical stores and e-commerce, decreased by 13 percent.

The company said, as customers continue to suffer from high inflation and energy costs, the company's second quarter total comparable net sales through May 30, 2022, including both physical stores and e-commerce, decreased by 17 percent relative to the comparable period of 2021.

"Our first quarter operating results were in line with our outlook and were an improvement compared to our pre-pandemic performance in the first quarter of fiscal 2019," commented Ed Thomas, the company’s president and chief executive officer.

Highlights of Tilly’s Q1 operating results Net sales from physical stores were 117.5 million dollars, a decrease of 10.2 million dollars or 8 percent with a comparable store net sales decrease of 10.8 percent. The company ended the first quarter with 241 total stores compared to 238 total stores at the end of the first quarter last year.

Net sales from e-commerce were 28.3 million dollars, a decrease of 7.2 million dollars or 20.3 percent. E-commerce net sales represented 19.4 percent of total net sales compared to 21.7 percent of total net sales last year.

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

Gross profit was 43.8 million dollars or 30.1 percent of net sales compared to 54.8 million dollars or 33.6 percent of net sales, 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 net sales, last year. Operating income was 146,000 dollars or 0.1 percent of net sales, in the pre-pandemic first quarter of fiscal 2019.

Net income was 0.8 million dollars or 3 cents per diluted share, compared to 11 million dollars or 36 cents per diluted share, last year. Net income was 0.7 million dollars or 2 cents per diluted share, in the pre-pandemic first quarter of fiscal 2019.

Tilly’s expects inflation and energy costs to impact Q2 sales Based on current and historical trends, the company currently estimates that its second quarter net sales will be in the range of 170 million to 175 million dollars with product margins approximately 200-250 basis points below last year due to the historically high level of full-price selling during fiscal 2021.

The company expects its operating income to be in the range of approximately 6 million dollars to 8.5 million dollars and earnings per diluted share to be in the range of 14 cents to 20 cents with weighted average diluted shares of approximately 30.2 million for the second quarter of fiscal 2022. This compares to second quarter net sales of 202 million dollars and earnings per diluted share of 66 cents for the second quarter of fiscal 2021, which doubled the previous company record for second quarter earnings per share.

The company expects to have 242 total stores open at the end of the second quarter, a net decrease of two stores from 244 total stores at the end of fiscal 2021's second quarter.