Tilly's reports 32 percent growth in Q3 operating income

Total net sales at Tilly’s were 152.8 million dollars, an increase of 0.5 percent, which the company said was achieved despite ending the quarter with five fewer stores than a year ago. Comparable store sales, which include e-commerce sales, increased 1.5 percent, while comparable store sales increased 4.4 percent. Operating income was 14.1 million dollars or 9.2 percent of net sales, a 32.3 percent increase compared to 10.7 million dollars or 7 percent of net sales, last year.

“In the third quarter, we delivered a 32 percent improvement in year-over-year operating income, largely driven by our sixth consecutive quarter of comp store sales growth, our fourth consecutive quarter of store traffic growth, and our continued strict inventory and expense management," commented Ed Thomas, the company’s President and CEO in a press release, adding, "Having turned the operating margin trend of our business around over the past year and a half, we now believe it is the appropriate time to plan for moderate growth by targeting to open approximately 10 to 15 new stores during fiscal 2018."

Operating incomes rise 32 percent in Q3

Gross profit was 50.1 million dollars, an increase of 4.4 percent and gross margin, or gross profit as a percentage of net sales, increased to 32.8 percent from 31.5 percent last year. The company said, this 220 basis-point increase in our operating margin was attributable to the combination of comparable store sales growth, improved gross margins, and reduced SG&A.

Net income was 8.8 million dollars or 0.30 dollar per diluted share, a 36.5 percent increase compared to 6.4 million dollars or 0.22 dollar per diluted share, last year.

First nine months net sales increase 0.9 percent

Total net sales for the first nine month period were 412.6 million dollars, an increase of 0.9 percent, while comparable store sales, which include e-commerce sales, increased 1.5 percent. Comparable store sales increased 0.7 percent in the first nine months of last year.

Gross profit was 123.9 million dollars, a 3.8 percent increase from 119.4 million dollars last year. Gross margin was 30 percent compared to 29.2 percent last year. This 80 basis-point increase in gross margin was primarily attributable to a 70 basis-point reduction in total buying, distribution and occupancy costs and a 10 basis-point improvement in product margins.

Operating income was 12.5 million dollars or 3 percent of net sales, a 40.4 percent increase compared to 8.9 million dollars or 2.2 percent of net sales, last year. Net income was 8 million dollars or 0.28 dollar per diluted share, a 56.7 percent increase compared to 5.1 million dollars or 0.18 dollar per diluted share, last year.

Q4 comparable sales expected to rise low single digit

Based on current and historical trends, the company said, it expects its fourth quarter comparable store sales to increase by a low single-digit percentage, operating income to be in the range of approximately 10.5 million dollars to 13 million dollars, and income per diluted share to be in the range of 0.22 dollar to 0.26 dollar. This compares to operating income of 10.4 million dollars and income per diluted share of 0.22 dollar for the fourth quarter of fiscal 2016.

Picture:Tilly's website