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Tilly’s reports flat net sales in Q1, gross profit down 9.6 percent

By Prachi Singh

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Report

Tilly’s first quarter net sales ended April 30, 2016 were 120.2 million dollars, flat to last year. Comparable store sales, which include e-commerce sales, decreased 4.1 percent, while gross profit was 32.6 million dollars, a 9.6 percent decrease from 36.1 million dollars last year.

“Our first quarter results were at the better end of our outlook range before taking a legal provision into account, and we managed inventory well with a 7 percent decrease on a per square foot basis," stated Ed Thomas, President and Chief Executive Officer, adding, "Looking ahead, we expect to launch some important initiatives during the second quarter that we believe will improve the business for the long term, despite the current challenges affecting retail in general.”

Fiscal 2016 first quarter overview

Gross margin was 27.1 percent compared to 30 percent last year. This 290 basis point decrease in gross margin, the company said was due to occupancy costs deleveraged 170 basis points due to the negative sales comp and addition of 11 net new stores year over year and decline in product margins of 90 basis points as a result of increased markdowns.

Operating loss was 4 million dollars or 3.3 percent of net sales, compared to operating income of 2.1 million dollars or 1.8 percent of net sales, last year. Net loss was 2.7 million dollars or 0.10 dollar per share, compared to net income of 1.3 million dollars or 0.05 dollar per share, last year. On a non-GAAP basis, excluding a tax-effected 1 million dollars legal provision, net loss was 1.7 million dollars, or 0.06 dollar per share.

picture:tillys.com

Tilly's