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Tilly’s Q3 comparable sales increase 4.4 percent

By Prachi Singh

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Report

Tilly’s total net sale for the third quarter were 152.1 million dollars, a 7.3 percent increase from 141.7 million dollars last year. Comparable store sales, which include e-commerce sales, increased 4.4 percent compared to 3.9 percent rise in the third quarter last year.

“We are encouraged by the 4.4 percent comp increase we delivered in the third quarter on top of last year's 3.9 percent increase," stated Ed Thomas, President and Chief Executive Officer in the company release, adding, "A promising Black Friday weekend and Cyber Monday have us off to a decent start to the fourth quarter, and we believe our merchandise assortment is well positioned for the holiday season. We remain focused on improving profitability for the long term."

Third quarter financial highlights

Gross margin, or gross profit as a percentage of net sales, was flat at 31.5 percent compared to last year. The company said that a 110 basis point increase due to lower buying, distribution and occupancy costs was offset by a 110 basis point decline in product margins from increased markdowns.

Operating income was 10.7 million dollars or 7 percent of net sales, compared to 5.4 million dollars or 3.8 percent of net sales, last year. Net income was 6.4 million dollars or 0.22 dollar per diluted share, compared to 2.8 million dollars, or 0.10 dollar per diluted share, last year.

First nine months results

For the first nine months, total net sales were 408.7 million dollars, an increase of 4.3 percent from 391.9 million dollars last year. Comparable store sales, which include e-commerce sales, increased 0.7 percent compared to comparable store sales increase of 2.1 percent for the same time period last year.

Gross margin, or gross profit as a percentage of net sales, was 29.2 percent compared to 29.9 percent last year. This 70 basis point decrease, the company said, was attributable to a decline in product margins as a result of increased markdowns. Operating income was 8.9 million dollars, an increase of 0.3 million dollars from 8.6 million dollars last year. Operating margin was flat at 2.2 percent of net sales compared to last year. Net income was 5.1 million dollars, or 0.18 dollar per diluted share, compared to 4.7 million dollars or 0.16 dollar per diluted share, last year.

Fourth quarter 2016 outlook

Based on current trends, the company said, it expects fourth quarter comparable store sales to be in the range of flat to a rise of 2 percent, operating income to be in the range of 7.5 million dollars to 9.5 million dollars and earnings per diluted share to be in the range of 0.15 dollar to 0.20 dollar compared to 0.10 dollar for the fourth quarter of fiscal 2015.

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Tilly's